Denise International Busine chap 4 PDF

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International Business: The Challenges of Globalization, 7e (Wild) Chapter 4 Economics and Emerging Markets China relies on its cheap labor for economic development and India on the brainpower of its people. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: E...

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International Business: The Challenges of Globalization, 7e (Wild) Chapter 4 Economics and Emerging Markets 1) China relies on its cheap labor for economic development and India on the brainpower of its people. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Easy Course LO: Define the fundamental concepts of international business 2) Incentives and rewards for individual business initiatives are an important aspect of collectivist cultures. Answer: FALSE AACSB: Multicultural and diversity understanding Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Explain how differences in culture affect the international business environment 3) Individualist cultures tend to offer fewer incentives and rewards than collectivist cultures. Answer: FALSE AACSB: Multicultural and diversity understanding Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Explain how differences in culture affect the international business environment 4) Entrepreneurs are businesspeople who accept the risks and opportunities involved in operating new business ventures. Answer: TRUE Skill: Concept Objective: 1 Difficulty: Easy Course LO: Define the fundamental concepts of international business 5) No nation has a completely individualist or completely collectivist cultural orientation. Answer: TRUE AACSB: Multicultural and diversity understanding Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Explain how differences in culture affect the international business environment

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6) Central planning is rooted in the ideology that the welfare of a group is more important than individual well-being. Answer: TRUE Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Define the fundamental concepts of international business 7) Frederick Taylor popularized the idea of central economic planning in the nineteenth century. Answer: FALSE Skill: Concept Objective: 1 Difficulty: Easy Course LO: Define the fundamental concepts of international business 8) The ultimate goal of a market economy is to ensure that the government takes complete control over the distribution of a nation's resources. Answer: FALSE AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 9) The government makes nearly all economy-related decisions in a market economy. Answer: FALSE AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 10) One of the reasons for the decline of central planning was its failure to create economic value for customers. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development

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11) Central planning led to little economic growth and consistently low standards of living. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Define the fundamental concepts of international business 12) A centrally planned economy gives individuals access to alternative purchase options. Answer: FALSE Skill: Concept Objective: 3 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 13) An economic system based on public ownership fosters growth much better than an economy based on private ownership. Answer: FALSE AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 14) The Chinese term "guanxi" means government ownership. Answer: FALSE Skill: Concept Objective: 1 Difficulty: Easy Course LO: Define the fundamental concepts of international business 15) In a mixed economy, the government tends to control the economic sectors that are important for national security. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 2 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development

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16) When the assets of a country are owned by the government, there seems to be more incentive to eliminate waste. Answer: FALSE AACSB: Dynamics of the global economy Skill: Concept Objective: 2 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 17) As supply and demand change for a good or service, so does its selling price. Answer: TRUE AACSB: Analytic skills Skill: Concept Objective: 3 Difficulty: Moderate Course LO: Define the fundamental concepts of international business 18) Interfering with the price mechanism is a violation of a fundamental principle of the market economy. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 3 Difficulty: Moderate Course LO: Define the fundamental concepts of international business 19) Both GDP and GNP measure a nation's income per person. Answer: FALSE AACSB: Dynamics of the global economy Skill: Concept Objective: 4 Difficulty: Easy Course LO: Define the fundamental concepts of international business 20) Volunteer work and unpaid household work are included in GNP. Answer: FALSE Skill: Concept Objective: 4 Difficulty: Easy Course LO: Define the fundamental concepts of international business

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21) Barter is an alternative for buyers who lack money needed to pay for imports. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 4 Difficulty: Easy Course LO: Define the fundamental concepts of international business 22) The concept of purchasing power parity (PPP) must be applied to understand the true value of a currency in its home country. Answer: FALSE AACSB: Dynamics of the global economy Skill: Concept Objective: 4 Difficulty: Moderate Course LO: Define the fundamental concepts of international business 23) The human development index (HDI) demonstrates that high national income alone guarantees human progress. Answer: FALSE AACSB: Dynamics of the global economy Skill: Concept Objective: 4 Difficulty: Easy Course LO: Define the fundamental concepts of international business 24) Nations with the poorest infrastructures and lowest personal incomes are called developing countries. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 4 Difficulty: Easy Course LO: Define the fundamental concepts of international business 25) One of the key obstacles faced by countries in economic transition is the lack of managerial expertise. Answer: TRUE AACSB: Dynamics of the global economy Skill: Concept Objective: 5 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development

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26) Businesspeople who accept the risks and opportunities involved in creating and operating new business ventures are called ________. A) managers B) supervisors C) entrepreneurs D) angel investors Answer: C Skill: Concept Objective: 1 Difficulty: Easy Course LO: Define the fundamental concepts of international business 27) In ________ cultures, economic systems tend to provide incentives and rewards for a person's private business initiatives. A) individualist B) high uncertainty avoidance C) feminine D) large power distance Answer: A AACSB: Multicultural and diversity understanding Skill: Concept Objective: 1 Difficulty: Easy Course LO: Explain how differences in culture affect the international business environment 28) The ________ system of a country consists of the structure and processes it uses to allocate its resources and to conduct its commercial activities. A) political B) economic C) social D) cultural Answer: B AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Easy Course LO: Define the fundamental concepts of international business

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29) A ________ economy is a system in which the government owns a nation's land, factories, and other economic resources, and schedules nearly all economic activities. A) mixed B) market C) centrally planned D) laissez-faire Answer: C AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 30) Central planning is rooted in the ideology that ________. A) the welfare of a group is more important than individual well-being B) individual concerns should be placed above group consensus C) individual and group concerns are just as important as government concerns D) privatization will enhance a country's economic well-being Answer: A Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 31) Which of the following statements is true of a centrally planned economy? A) Individual concerns are as important as the government's concerns. B) Consumers determine the prices of products and labor. C) Factories are privately owned. D) The government sets the production goals. Answer: D AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 32) In most centrally planned economies that failed, ________. A) market conditions had determined who would produce goods B) prices of products were seen as a function of supply and demand C) central planning agencies had specified the production goals D) central planners had paid attention to efficiency improvement Answer: C Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 7 Copyright © 2014 Pearson Education, Inc.

33) Who among the following popularized the idea of central economic planning in the nineteenth century? A) Frederick Taylor B) Karl Marx C) Peter Drucker D) Henry Fayol Answer: B Skill: Concept Objective: 1 Difficulty: Easy Course LO: Define the fundamental concepts of international business 34) North Korea practices a policy of self-reliance known as ________. A) guanxi B) laissez-faire C) juche D) kaizen Answer: C Skill: Concept Objective: 1 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 35) Which of the following disagrees with the concept of centrally planned economies? A) At the time of their collapse, standards of living in most centrally planned economies were at or above those of market economies. B) Basic necessities were often not provided to citizens in centrally planned economies. C) Underground economies for goods and services thrived in most centrally planned economies. D) Prices on the black market were much higher than the official prices set by governments. Answer: A AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 36) Which of the following emerged during the failure of centrally planned economic systems? A) black markets B) public markets C) free enterprise system D) market economies Answer: A AACSB: Dynamics of the global economy Skill: Concept Objective: 1 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 8 Copyright © 2014 Pearson Education, Inc.

37) Which of the following is an important factor in forming successful business ventures in China? A) following the strategies of western countries for establishing business relationships B) focusing on establishing tight formal contracts C) giving high importance to written contracts D) establishing a trusting relationship before proceeding with business Answer: D AACSB: Multicultural and diversity understanding Skill: Concept Objective: 1 Difficulty: Moderate Course LO: Explain how differences in culture affect the international business environment 38) Guanxi, in the Chinese business context, means ________. A) bribing government officials B) manufacturing inexpensive products C) personal relationships D) preference for communism Answer: C Skill: Concept Objective: 1 Difficulty: Easy Course LO: Explain how differences in culture affect the international business environment 39) In which of the following systems is land, factories, and other economic resources equally split between private and government ownership? A) market economy B) black market economy C) mixed economy D) centrally planned economy Answer: C AACSB: Dynamics of the global economy Skill: Concept Objective: 2 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development

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40) The government maintains control over the banking industry in a country. Which of the following is most likely true if the country has a mixed economy? A) Businesses in most economic sectors of the country are privately owned. B) The government considers banking sector as important to national security. C) The country has never experienced threats against its long-term stability. D) The government views banking as more important than manufacturing. Answer: B AACSB: Analytic skills Skill: Application Objective: 2 Difficulty: Hard Course LO: Describe how differences in political economy influence economic development 41) France, Germany, and Sweden are examples of ________. A) centrally planned economies B) market economies C) closed economies D) mixed economies Answer: D Skill: Concept Objective: 2 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 42) In which of the following economies would manufacturing firms most likely produce defective products due to low incentives for quality outputs? A) centrally planned economies B) market economies C) closed economies D) mixed economies Answer: A AACSB: Dynamics of the global economy Skill: Concept Objective: 2 Difficulty: Easy Course LO: Define the fundamental concepts of international business

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43) The selling of government-owned economic resources to private operators is called ________. A) price mechanism B) social stratification C) privatization D) guanxi Answer: C Skill: Concept Objective: 2 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 44) Which of the following is the main goal of privatization? A) to ensure that the government specifies production goals B) to increase economic efficiency C) to increase subsidies to companies D) to increase government's control on the market Answer: B Skill: Concept Objective: 2 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 45) In a market economy, economy-related decisions are determined by the interactions between ________. A) the government and individuals B) supply and demand C) customers and employees D) large and small businesses Answer: B AACSB: Dynamics of the global economy Skill: Concept Objective: 3 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 46) Which of the following dictates supply and demand in a market economy? A) privatization B) production quotas C) price mechanism D) government intervention Answer: C AACSB: Dynamics of the global economy Skill: Concept Objective: 3 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development 11 Copyright © 2014 Pearson Education, Inc.

47) A market economy is rooted in the belief that ________. A) all the economic resources should be owned by the government B) individual concerns should be placed above group concerns C) every individual's business goals must be set by the government D) government concerns matter the most in a country's economy Answer: B AACSB: Dynamics of the global economy Skill: Concept Objective: 3 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 48) Assuming insects destroyed most of the coffee crops in key coffee-producing countries worldwide, which of the following would most likely occur within the coffee market? A) Coffee prices would increase. B) Coffee prices would decrease. C) Demand for coffee would increase. D) Demand for coffee would decrease. Answer: A AACSB: Analytic skills Skill: Application Objective: 3 Difficulty: Hard Course LO: Define the fundamental concepts of international business 49) Which of the following countries has a contemporary market economy? A) France B) Sweden C) India D) United States Answer: D Skill: Concept Objective: 3 Difficulty: Easy Course LO: Describe how differences in political economy influence economic development

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50) Several research studies were published lately that documented the health benefits of a certain grain. Which of the following is the most likely economic result of these findings? A) Demand for the grain increases. B) Equilibrium in terms of demand and supply is maintained. C) The price of the grain decreases. D) Supply of the grain remains constant. Answer: A AACSB: Analytic skills Skill: Application Objective: 3 Difficulty: Hard Course LO: Describe how global production and logistics decisions are made 51) Laissez-faire economics refers to ________. A) less government interference in commerce and greater individual economic freedom B) a government-controlled system with less economic freedom at the individual level C) a centrally planned economic system D) creating monopolies through government partnership Answer: A AACSB: Dynamics of the global economy Skill: Concept Objective: 3 Difficulty: Easy Course LO: Define the fundamental concepts of international business 52) To function smoothly and properly, a market economy requires ________. A) government partnership B) the practice of monopoly C) price flexibility D) nationalization Answer: C AACSB: Dynamics of the global economy Skill: Concept Objective: 3 Difficulty: Easy Course LO: Define the fundamental concepts of international business 53) Supply and demand are dictated by ________. A) government ownership B) free enterprise C) the price mechanism D) the management's decisions Answer: C Skill: Concept Objective: 3 Difficulty: Easy Course LO: Define the fundamental concepts of international business 13 Copyright © 2014 Pearson Education, Inc.

54) In a market economy, access to alternative purchase options is known as ________. A) price-sensitivity B) economic transition C) laissez-faire D) free choice Answer: D AACSB: Dynamics of the global economy Skill: Concept Objective: 3 Difficulty: Easy Course LO: Define the fundamental concepts of international business 55) Which of the following statements is most accurate regarding the element of free choice when market economies are compared with centrally planned economies? A) Consumers have free choice in both types of economies. B) Free choice exists in market economies, but choices are restricted in planned economies. C) Planned economies allow for greater free choice than do market economies. D) Consumers do not have free choice in either of these economies. Answer: B AACSB: Dynamics of the global economy Skill: Concept Objective: 1, 3 Difficulty: Moderate Course LO: Describe how differences in political economy influence economic development 56) When one company alone controls a product's supply and therefore, its price, it is considered a(n) ________. A) oligopsony B) monopoly C) duopoly D) oligopoly Answer: B Skill: Concept Objective: 3 Difficulty: Easy Course LO: Define the fundamental concepts of international business

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57) Which of the following control inflation through policies regarding taxation and gover...