Test Bank Chapter 1 Introduction to international business

Chapter 1

Test Bank

Type: multiple choice question

Title: Chapter 01 Question 01

1) Globalisation describes the shift towards:

Feedback: Globalisation increases economic interdependencies, so the correct answer is b. It brings no assurance of greater economic security for all nor of the role of national policy. Interdependency is also associated with an increase in uncertainty.

A-head reference: Chapter 1.1 Introduction

a. a world economy dominated by national policies and standards

b. a more integrated and interdependent world economy

c. a world economy where uncertainty can be more effectively managed through multilateral agreements

d. a fairer world that offers greater economic security for all

Type: true-false

Title: Chapter 01 Question 02

2) Outsourcing is only possible for intermediate manufactured products.

a. True

b. False

Feedback: The statement is false because many activities including supporting services such as marketing or logistics can also be outsourced.

A-head reference: Chapter 1.3 Global patterns of International Business

Type: true-false

Title: Chapter 01 Question 03

3) The current globalisation wave has been driven by technological change and declining barriers to trade in goods, ideas and services.

a. True

Feedback: It is true that technological changes in communication and transport technologies and declining barriers to international exchange have driven the most recent wave of globalisation.

A-head reference: Chapter 1.2 The growth of the global factory

b. False

Type: true-false

Title: Chapter 01 Question 04

4) The globalisation is bringing about homogenization of national cultures and values.

a. True

b. False

Feedback: The statement is false, it is generally believed that diversity can coexist with growing interdependence.

A-head reference: Chapter 1.1 Introduction

Type: true-false

Title: Chapter 01 Question 05

5) Traditional trade, where a country produces a product or service that is exported to overseas consumers as a final good, now represents only around 30 per cent of all trade.

a. True

Feedback: True: About 70 per cent of trade is today linked to GVCs as intermediate products, services and components cross national borders, often multiple times, and further value is added, before they are exported as final goods.

A-head reference: Chapter 1.3 Global patterns of International Business

b. False

Type: true-false

Title: Chapter 01 Question 06

6) A global value chain shows how an international business organises the transformation of goods and services from raw materials to finished goods.

a. True

Feedback: True, this is a valid description of what a value chain shows.

A-head reference: Chapter 1.3 Global patterns of International Business

b. False

Type: multiple choice question

Title: Chapter 01 Question 07

7) The growth of non-equity modes of internationalization indicates that:

Feedback: These changing patterns of trade and production are entirely consistent with the increased ‘fine-slicing’ of tasks within global value chains and a concomitant externalization of activities.

A-head reference: Chapter 1.3 Global patterns of International Business

a. Globalisation is slowing down

b. Companies prefer internalising activities

c. Internalisation is preferred to externalisation

d. Companies increase ‘fine-slicing’ and externalization

Type: true-false

Title: Chapter 01 Question 08

8) Technology could be considered as the application of knowledge which redefines the boundaries of global business.

a. True

Feedback: This would be true for technologies that focus on processes or organisational innovations that can be utilised by international organisations. When adopted they can change the form, scope and reach of MNEs.

A-head reference: Chapter 1.2 The growth of the global factory

b. False

Type: multiple choice question

Title: Chapter 01 Question 09

9) The international business environment is mostly characterised by:

Feedback: The correct response is a) Shifts in the nature of the international operating environment, including communications technologies, economic liberalization, regional integration, the explosion of e-commerce, and the growing participation of emerging economies in the world economy, have expanded the locational and governance choices facing international businesses.

A-head reference: Chapter 1.1 Introduction

a. Constant change that impacts the strategies and the structures of international firms

b. Risks and global opportunities that are generally equal

c. Risks that exceed global opportunities

d. Constant cross-border integration

Type: true-false

Title: Chapter 01 Question 10

10) The growth of GVCs has brought changes to both the structure of trade and the governance of cross-border transactions.

a. True

Feedback: True: The fragmentation of production has increased the focus on the costs and efficiency of intermediate production, widening locational choices for multinational enterprises and favouring emerging economies.

A-head reference: Chapter 1.3 Global patterns of International Business

b. False