Question 1

NAFTA is a free trade agreement among the United States, Canada, and Mexico that has in essence removed all barriers to trade and investment among the three nations.

Select one:

True

False

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Partly as a result of the slow progress in multilateral trade negotiations, the United States and many other countries have pursued bilateral and regional trade agreements. The United States, Canada, and Mexico make up the North American Free Trade Agreement (NAFTA), which in essence has removed all barriers to trade among these countries and created a huge North American market.

The correct answer is ‘True’.

Question 2

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The process by which companies undertake some activities at offshore locations instead of in their countries of origin is:

Select one:

  1. Home sourcing
  2. Insourcing
  3. Offshoring

Offshoring is the process by which companies undertake some activities at offshore locations instead of in their countries of origin.

  1. Globalization

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The correct answer is: Offshoring

Question 3

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The process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural environments is called international management.

Select one:

True

False

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International management is the process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural contexts.

The correct answer is ‘True’.

Question 4

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The process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural environments is:

Select one:

  1. Strategic management
  2. Internationalization
  3. Globalization
  4. International management

International management is the process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural contexts.

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The correct answer is: International management

Question 5

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Despite claims by Facebook, social media has not significantly connected people across the globe.

Select one:

True

False

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We live in a world interconnected by social media. Through online networking, the way we connect with others has drastically changed. Virtually anyone on the globe is only a few clicks away. In fact, the average number of links separating any two random people on Facebook is now only 4.74.

The correct answer is ‘False’.

Question 6

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Nongovernmental organizations believe that everyone benefits from globalization, as evidenced in lower prices, greater availability of goods, better jobs and access to technology.

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True

False

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The correct answer is ‘False’.

Question 7

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Identify the statement that is false of globalization.

Select one:

  1. It can be defined as the process of social, political, economic, cultural, and technological integration among countries around the world
  2. It is the process of a business crossing national and cultural borders

Internationalization is the process of a business crossing national and cultural borders, while globalization is the vision of creating one world unit, a single market entity.

  1. Evidence of globalization can be seen in increased levels of trade, capital flows, and migration
  2. It has been facilitated by technological advances in transnational communications, transport, and travel

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The correct answer is: It is the process of a business crossing national and cultural borders

Question 8

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Mexico believes that the United States is its most important market and that little effort should go into expanding trade with Europe and Asia at least for now.

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True

False 

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Mexico’s trade with both the EU and Asia is on the rise, which is important to Mexico as it wants to reduce its overreliance on the U.S. market. ANSWER:

The correct answer is ‘False’.

Question 9

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Foreign direct investment fell dramatically over the last decade in most regions of the world.

Select one:

True

False 

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Foreign direct investment (FDI)—the term used to indicate the amount invested in property, plant, and equipment in another country—has been growing at a healthy rate.

The correct answer is ‘False’.

Question 10

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NAFTA is better integrated as a single market than the EU or the allied Asian countries.

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True

False 

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Even though long-standing cultural differences remain, and the EU has recently experienced some substantial challenges, the EU is more integrated as a single market than NAFTA, CAFTA, or the allied Asian countries.

The correct answer is ‘False’.

Question 11

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As the pace of global integration quickens, so have the cries against globalization and the emergence of new concerns over mounting global pressures. Nongovernmental organizations have become more active in expressing concerns about the potential shortcomings of economic globalization. 6. Procter & Gamble (P&G) has strategically leveraged social media to improve its long-term brand image.

Select one:

True 

False

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Procter & Gamble (P&G) has strategically leveraged social media to improve its long-term brand image. In 2010, P&G unveiled a Billion Acts of Green™ Facebook application which allows people to “make a pledge to lessen their environmental impact and promote environmentally beneficial habits to friends and family via social media channels.”

The correct answer is ‘True’.

Question 12

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Which of the following statements about social media is untrue?

Select one:

  1. Social networks have rapidly diffused from the United States and Europe to every region of the world.
  2. Social media networks have accelerated technological integration among the nations of the world.
  3. Social media such as Facebook are powerful, but they cannot leverage networks to achieve greater success.

Social networks have rapidly diffused from the United States and Europe to every region of the world, underscoring the inexorable nature of globalization. Networks and the individuals who make them up are bringing populations of the world closer together and further accelerating the already rapid pace of globalization and integration. A social network also serves as an inexpensive, effective means of marketing directly to a business’s target audience.

  1. Social networks serve as inexpensive, effective means of marketing directly to businesses’ target audiences.

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The correct answer is: Social media such as Facebook are powerful, but they cannot leverage networks to achieve greater success.

Question 13

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The countries of the Association of Southeast Asian nations are challenging China’s position as destinations for low-cost production and export.

Select one:

True 

False

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The Association of Southeast Asian Nations (ASEAN) is advancing trade and economic integration and now poses challenges to China as a region of relatively low cost production and export.

The correct answer is ‘True’.

Question 14

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Which form of social media is not known for significantly changing how consumers search for products and services?

Select one:

  1. LinkedIn
  2. b. Epicurious

Facebook, Twitter, LinkedIn, and others are all providing communication platforms for individuals and groups in disparate—and even isolated—locations around the world. Such networks also offer myriad business opportunities for companies large and small to identify and target discrete groups of consumers or other business partners. These networks are revolutionizing the nature of management—including international management—by allowing producers and consumers to interact directly without the usual intermediaries.

  1. Facebook
  2. Twitter

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The correct answer is: Epicurious

Question 15

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Multinational corporations can be defined as firms having operations in more than one country, international sales, and a nationality mix of nationalities among managers and owners.

Select one:

True 

False

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An MNC is a firm that has operations in more than one country, international sales, and a mix of nationalities among managers and owners.

The correct answer is ‘True’.

Question 16

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The global organization of countries that oversees rules and regulations for international trade and investment, including agriculture, intellectual property, services, competition and subsidies is the:

Select one:

  1. WTO 

The WTO is the global organization of countries that oversees rules and regulations for international trade and investment, including agriculture, intellectual property, services, competition, and subsidies.

  1. NAFTA
  2. WIPO
  3. ITO

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The correct answer is: WTO

Question 17

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United States multinationals have more foreign direct investment in Germany than any other country.

Select one:

True 

False

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The correct answer is ‘False’.

Question 18

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The subcontracting or contracting out of activities to external organizations that had previously been performed by the firm is called:

Select one:

  1. Home sourcing
  2. Insourcing
  3. Offshoring
  4. Outsourcing 

Outsourcing is the subcontracting or contracting out of activities to external organizations that had previously been performed by the firm.

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The correct answer is: Outsourcing

Question 19

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Globalization:

Select one:

  1. Is the growth of interstate trade, spurred on by the progress toward free-market policies?
  2. Is the subcontracting of activities to endogenous organizations that had previously been performed within the firm?
  3. c. Is the process of social, political, economic, cultural, and technological integration among countries around the world?

Globalization is the process of social, political, economic, cultural, and technological integration among countries around the world.

  1. Is the process of a business crossing national and cultural borders?

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The correct answer is: Is the process of social, political, economic, cultural, and technological integration among countries around the world?

Question 20

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Internationalization is the vision of creating one world unit, a single market entity.

Select one:

True 

False

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The correct answer is ‘False’.

Question 21

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Anti-globalization activists:

Select one:

  1. Contend that even within the developing world, it is protectionist policies, not trade and investment liberalization, that result in environmental and social damage
  2. Believe globalization will force higher-polluting countries such as China and Russia into an integrated global community that takes responsible measures to protect the environment
  3. Assert that if corporations are free to locate anywhere in the world, the world’s poorest countries will relax or eliminate environmental standards and social services in order to attract first-world investment and the jobs and wealth that come with it 

According to anti-globalization activists, if corporations are free to locate anywhere in the world, the world’s poorest countries will relax or eliminate environmental standards and social services in order to attract first-world investment and the jobs and wealth that come with it.

  1. Believe that industrialization will create wealth that will enable new industries to employ more modern, environmentally friendly technology

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The correct answer is: Assert that if corporations are free to locate anywhere in the world, the world’s poorest countries will relax or eliminate environmental standards and social services in order to attract first-world investment and the jobs and wealth that come with it

Question 22

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To qualify as a multinational corporation, a firm must meet all of the following criteria except:

Select one:

  1. Operations in more than one country
  2. International sales
  3. A nationality mix of managers and owners
  4. d. Sales of at least one million dollars per year

An MNC is a firm that has operations in more than one country, international sales, and a mix of nationalities among managers and owners.

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The correct answer is: Sales of at least one million dollars per year

Question 23

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One of the ways that Russia is attempting to get its economy going is by removing many administered prices and subsidies and letting free market forces take over.

Select one:

True 

False

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Each of the individual republics that made up the U.S.S.R. in turn declared their independence and now are attempting to shift from a centrally planned to a market-based economy. The Russian Republic has the largest population, territory, and influence, but others, such as Ukraine, also are industrialized and potentially important in the global economy. Of most importance to the study of international management are the Russian economic reforms, the dismantling of Russian price controls (allowing supply and demand to determine prices), and privatization (converting the old communist-style public enterprises to private ownership).

The correct answer is ‘True’.

Question 24

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In recent years, Canadian firms have begun investing heavily in the United States.

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True 

False

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In recent years, Canadian firms have begun investing heavily in the United States while gaining international investment from both the United States and elsewhere.

The correct answer is ‘True’.

Question 25

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Marketers must be responsive to social networks.

Select one:

True 

False

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social media has changed how consumers search for products and services. With the data available from their friends about products and services, consumers know what they want without traditional marketing campaigns. This trend means that marketers must be responsive to social networks.

The correct answer is ‘True’.