Question 1

Most economists argue that protectionism ________ the world economy because it ________ trade among countries.
A) helps; inhibits
B) helps; encourages
C) harms; inhibits
D) harms; encourages
E) doesn't impact; doesn't affect

Accepted Answer

Most economists argue that protectionism harms the world economy because it inhibits trade among countries. When countries impose protectionist policies such as tariffs and quotas, it leads to a decrease in international trade, which can adversely affect economic growth and development.

Question 2

A motivation for initiating international operations is that competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Accepted Answer

This is a potential motivation for initiating international operations, as companies may see foreign markets as opportunities to expand their business without facing as much competition as they do in their home market. However, it is important to note that potential competition and market conditions should always be thoroughly researched before entering a new market.

Question 3

Potential advantages to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

Accepted Answer

Initiating, continuing, or expanding international operations can lead to these advantages.

Question 4

Foreign revenue as a percentage of total company revenues ________ in hundreds of U.S. firms, including ExxonMobil, Gillette, Dow Chemical, and Citicorp.
A) is almost 10 percent
B) approaches 20 percent
C) is 25 percent
D) exceed 50 percent
E) is at least 70 percent

Accepted Answer

The question mentions that foreign revenue as a percentage of total company revenues “exceeds 50 percent” in hundreds of US firms, including ExxonMobil, Gillette, Dow Chemical, and Citicorp. Therefore, the best choice is D.

Question 5

Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues.

Accepted Answer

International operations can open up new markets and allow a firm to tap into new customer segments. This can lead to increased sales and revenue for the company.

Question 6

Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the same time.

Accepted Answer

Multinational corporations operate in multiple countries and, therefore, need to be globally competitive to do well in all markets. At the same time, they need to be responsive to local market needs and cultural differences, making them nationally responsive. This duality creates a challenge for strategists to balance global and local needs, making it important for them to create a global strategy that can be adjusted to meet local requirements.

Question 7

U.S. firms doing business internationally face the complications of having to deal with two or more monetary systems.

Accepted Answer

This is true. Firms doing business internationally may need to exchange currencies, deal with exchange rate fluctuations, and factor in the impact of currency exchange on profitability.

Question 8

Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

Accepted Answer

It's typically the opposite; weaknesses of competitors in foreign lands are often overestimated, and strengths are underestimated, due to lack of local market knowledge and understanding of the competitive landscape.

Question 9

Discuss at least four potential disadvantages to initiating, continuing, and/or expanding international operations.

Accepted Answer

The answer of Discuss at least four potential disadvantages to...

Question 10

What percent of the world's population lives outside the United States?
A) 55
B) 65
C) 75
D) 85
E) 95

Accepted Answer

The United States population is a small fraction of the global population. As of my last update, the U.S. had a population of about 330 million, while the world population was about 7.8 billion. This means more than 95% of the world's population lives outside the United States.

Question 11

Keeping informed about the number and the nature of competitors is easier when doing business internationally.

Accepted Answer

This statement is false. Keeping informed about competitors is just as important and challenging when doing business internationally as it is domestically. In fact, there may be even more competitors in international markets, and cultural and language barriers can make it more difficult to gather information about them.

Question 12

Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.

Accepted Answer

The answer of Although growth in revenues and profits is...

Question 13

Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

Accepted Answer

Competing globally can enhance a firm's power and prestige, which may translate into improved negotiating power among creditors, suppliers, or distributors.

Question 14

List at least five potential advantages to initiating, continuing, and/or expanding international operations.

Accepted Answer

The answer of List at least five potential advantages to...

Question 15

In which of the following industries is the United States NOT yet greatly challenged by foreign competitors?
A) Auto industry
B) Electronics
C) Manufacturing
D) Retailing
E) None of the above

Accepted Answer

While there may be some foreign competition in the retailing industry, the United States has not yet been greatly challenged by foreign competitors in this industry.

Question 16

The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

Accepted Answer

Economic and marketing information can be impacted by factors such as government regulations, cultural differences, and technological infrastructure, and these factors can vary widely across different countries. Therefore, the availability, depth, and reliability of economic and marketing information can differ significantly depending on the country in question.

Question 17

Which of the following statements is NOT true?
A) America's economy is becoming much less American.
B) A world economy and monetary system are emerging.
C) Corporations in every corner of the globe are taking advantage of the opportunity to obtain customers globally.
D) Markets are shifting slowly and in many cases diverging in tastes, trends, and prices.
E) Innovative transport systems are accelerating the transfer of technology.

Accepted Answer

The statement that markets are shifting slowly and in many cases diverging in tastes, trends, and prices is not true. In reality, globalization and technological advancements are leading to markets converging in tastes, trends, and prices, as consumers around the world gain access to similar products and information.

Question 18

The portion of the world's population that lives outside of the United States is growing ________ the U.S. population.
A) 30 percent slower than
B) 70 percent slower than
C) 30 percent faster than
D) 70 percent faster than
E) at the same rate as

Accepted Answer

The answer of The portion of the world's population that...

Question 19

Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

Accepted Answer

Differences in language, culture, and values can lead to misunderstandings and difficulties in managing people from different countries, especially in a global business setting.

Question 20

It is possible to obtain insurance from the U.S. Government's OPIC to eliminate all risks associated with doing business internationally.

Accepted Answer

While the U.S. Government's OPIC (Overseas Private Investment Corporation) does offer insurance products to mitigate certain risks associated with doing business internationally, it cannot eliminate all risks entirely. Businesses must still conduct thorough research and due diligence before entering into international ventures.

Quiz 11: Global and International Issues

Most economists argue that protectionism the world economy because it trade among countries.