International Business Strategies | 50+ MCQs Answers | Part 1
1. Geographical indication specifies:
(a) Place of origin of goods only
(b) Special characteristics of product associated with place of origin.
(c) Both (a) and (b)
Ans: a
2. Strategic alliance cannot be between:
(a) Manufacturer and supplier
(b) Competitors
(c) Non- competitors
(d) None of the above
Ans: c
3. The mode of entry into international business with least risk to the firm is
(a) Export house
(b) Trading house
(c) A manufacturing exporter
(d) Merchant exporter.
Ans: d
4. A global company can ----------- its experience to expand its global operations
(a) Contract
(b) Expand
(c) Minimize
(d) Leverage
Ans: a
5. Governmental regulations can affect the viability & ----------- of a company using the internet as a foreign market entry mode.
(a) Effectiveness
(b) Association
(c) Performance
(d) None of the above
Ans: c
6. ______ typically offers more flexibility in international markets.
(a) SMEs
(b) LSEs
(c) MNEs
(d) None of the above
Ans: d
7. Within an international context, what are 'economies of scope' synonymous with?
(a) Reusing a resource from one business/country in additional businesses/countries.
(b) Decreased cost per unit of output.
(c) Buying components in a bulk.
(d) Any of the above.
Ans: a
8. Globalization refers to:
(a) A more integrated and interdependent world
(b) Less foreign trade and investment
(c) Global warming
(d) Lower incomes worldwide
Ans: a
9. Which of the following is not a driver of globalization?
(a) The fragmentation of consumer tastes between countries.
(b) The competitive process.
(c) Multinational companies successfully persuading governments to lower trading barriers.
(d) The need to gain economies of scale.
Ans: c
10. Globalization is beneficial for firms because:
(a) It protects them against foreign competition.
(b) It cushions them from the effects of events in other countries.
(c) It opens up new market opportunities.
(d) It increases the risk and uncertainty of operating in a globalizing world economy.
Ans: b
11. The internet facilitates globalization by:
(a) Making it more difficult to contact potential customers abroad.
(b) Cutting the cost for firms of communicating across borders.
(c) Making it harder to send money from one country to another.
(d) Making it easier for governments to censor the information received by their citizens from abroad.
Ans: a
12. Why might MNCs in the past have focused their marketing activities on the triad?
(a) That is where the most lucrative markets were located.
(b) Income per head in developing countries was relatively low.
(c) Transport and communication links were improving outside the triad.
(d) Technologically advanced goods and services do not appeal to consumers in developing economies.
Ans: a
13. Globalization can create problems for business because:
(a) It can result in more competition.
(b) It increases vulnerability to political risk and uncertainty when operating abroad.
(c) It means that they can increase prices.
(d) All of the options given are correct.
Ans: b
14. Which of the following statements on civil law systems would be seen as an advantage by business?
(a) Civil law systems operate in very few countries.
(b) Relevant areas of law are much easier to find than in common law systems.
(c) Relevant areas of law are more difficult to find than in common law systems.
(d) Lawyers act as oral advocates for their clients.
Ans: b
15. How does international law facilitate international trade and investment?
(a) It makes it easier to resolve contract disputes for firms involved in international trade and investment.
(b) It allows business to choose the most favorable national legal system to institute proceedings.
(c) The terms used in international conventions are open to differing interpretations.
(d) The Uniform Commercial Code favors big US multinationals.
Ans: c
16. Laws relating to The Single Market Program allow EU-based companies to:
(a) Move goods and services from any member state to another.
(b) Transfer managers to any member state.
(c) Invest anywhere in the EU.
(d) All of the options given.
Ans: a
17. Competition Law in the EU means that firms:
(a) Are free to set up international cartels.
(b) May be refused permission to take over a US competitor.
(c) Can not be made to repay government financial assistance.
(d) Can cross-subsidise loss-making services from profitable activities.
Ans: c
18. The law relating to E-Commerce fits which of the following descriptions:
(a) It comprises a single set of laws.
(b) The law lacks clarity.
(c) There is no problem applying contract law to the internet.
(d) The law makes it easy to deal with foreign computer hackers.
Ans: b
19. The existence of different currencies is beneficial to private financial institutions because:
(a) Each country has its own currency.
(b) The exchange rate of each currency is fixed by the International Monetary Fund.
(c) A collapse in the exchange rate of a currency can cause economic disruption.
(d) Profits can be made from arbitrage.
Ans: a
20. The International Monetary Fund is important because:
(a) It has sufficient financial resources to deal with a major global financial crisis.
(b) It has sufficient financial resources to help individual countries facing balance of payments problems.
(c) Emerging economies can exercise significant influence on it.
(d) It fixes exchange rates.
Ans: a
21. Which of the following are characteristic of the period when financial bubbles burst?
(a) Excessive optimism about future asset prices.
(b) Excessive pessimism about future asset prices.
(c) Rising house prices.
(d) Rising share prices.
Ans: b
22. What functions do financial institutions traditionally perform?
(a) They immobilize savings.
(b) They concentrate risk.
(c) They spread risk.
(d) They offer only short-term finance.
Ans: a
23. The balance of payments includes which of the following?
(a) a country's balance of trade
(b) foreign investments
(c) foreign aid
(d) all of the above
Ans: d
24. Globalization refers to:
(a) A more integrated and interdependent world
(b) Less foreign trade and investment
(c) Global warming
(d) Lower incomes worldwide
Ans: a
25. Which one of the following is a pull factor in emigration?
(a) Political oppression
(b) Job opportunities
(c) Food shortages
(d) War
Ans: d
26. Which of the following do NOT facilitate globalization?
(a) Improvements in communications
(b) Barriers to trade and investment
(c) Immigration controls
(d) Removal of controls on the movement of capital across borders
Ans: c
27. Which of the following constitutes Foreign Direct Investment?
(a) A speculator trying to make a profit by buying company shares on a foreign stock exchange.
(a) A UK energy company buying territory abroad where it expects to find oil reserves.
(b) A tourist purchasing foreign currency to spend on a holiday abroad.
(c) A company signing an agreement with a wholesaler to distribute its products in foreign markets.
Ans: b
28. Which of the following could be defined as a multinational company?
(a) A firm that owns shares in a foreign company but does not participate in the company's decision making.
(b) A UK based internet package holiday firm specializing in selling tours to Turkey to German customers.
(c) A firm owning a chain of supermarket outlets outside its country of origin.
(d) A finance company transferring its HQ and all its activities from the UK to the US.
Ans: c
29. Which of the following is a driver of globalization?
(a) Trade barriers and controls on inflows of foreign direct investment.
(b) Weak competition.
(c) Technological advance.
(d) Economies of scale are being exploited to the maximum.
Ans: b
30. Globalization is beneficial for firms because:
(a) It protects them against foreign competition.
(b) It cushions them from the effects of events in other countries.
(c) It opens up new market opportunities.
(d) It increases the risk and uncertainty of operating in a globalizing world economy.
Ans: a
31. The internet facilitates globalization by:
(a) Making it more difficult to contact potential customers abroad.
(b) Cutting the cost for firms of communicating across borders.
(c) Making it harder to send money from one country to another.
(d) Making it easier for governments to censor the information received by their citizens from abroad.
Ans: d
32. Why might MNCs in the past have focused their marketing activities on the triad?
(a) That is where the most lucrative markets were located.
(b) Income per head in developing countries was relatively low
(c) Transport and communication links were improving outside the triad.
(d) Technologically advanced goods and services do not appeal to consumers in developing economies.
Ans: d
33. Globalization can create problems for business because:
(a) It can result in more competition.
(b) It reduced vulnerability to political risk and uncertainty when operating abroad.
(c) It means that they can increase prices.
(d) All of the options given are correct.
Ans: d
34. Ethnocentric views concentrate on their
(a) home country
(b) host country
(c) world orientation
(d) Racial orientation
Ans: a
35. In a global marketplace
(a) the entire world is a marketplace
(b) National borders are irrelevant
(c) the potential for organizations to grow expands dramatically
(d) All of the above
Ans: d
36. In a global market place Managers must
(a) deals with economic, political and cultural differences
(b) expect competitors to suddenly appear at any time from any place
(c) not to take specific differences of local environment into consideration
(d) A and B
Ans: d
37. Trade Related Investment Measures (TRIMS) doesn’t apply for
(a) Measures that affect trade in goods.
(b) Measures that lead to restrictions in quantities.
(c) Discouraging measures that limit a company’s imports.
(d) Discouraging measures that limit a company’s exports.
Ans: b
38. General Agreement on Trade in Services will not apply to
(a) Services supplied from one country to another – cross-border supply
(b) Transaction of goods across the border – Export Import
(c) Individuals travelling from their own country to supply services in another – the presence of natural persons.
(d) Consumers/firms making use of a service in another country – consumption abroad.
(e) Foreign company setting up subsidiary or branches to provide services in another country –commercial presence.
Ans: b
39. As a part of WTO guidelines, Agreement on Agriculture (AOA) doesn’t consider
(a) Direct payments to farmers are permitted.
(b) Indirect assistance and support to farmers including R & D support by govt. are not permitted.
(c) Domestic policies which directly effect on production and trade have to be cut back.
(d) Least developed countries do not need to make any cuts.
Ans: b
40. Quantitative restrictions refer to limit set by countries to curb
(a) Measures that affect trade in goods.
(b) Measures that lead to restrictions in quantities.
(c) Discouraging measures that limit a company’s imports.
(d) Discouraging measures that limit a company’s exports.
Ans: c
41. A Most Favored nation status doesn’t necessarily refer to
(a) Same and equal economic treatment
(b) Non-discriminatory treatment
(c) Same tariff rates applicable
(d) Uniform civil code
Ans: d
42. The World Trade Organization was formed in the year _________ with GATT as its basis.
(a) 1993
(b) 1994
(c) 1995
(d) 1996
Ans: c
43. Specific cultural dimensions that do not have a significant impact on cross-national business interactions are
(a) Hofstede’s five cultural dimensions
(b) Monochromatic vs polychromatic tune
(c) Communication
(d) Geography
Ans: d
44. NAFTA is an example of
(a) Common Market
(b) Customers Union
(c) Economic Community
(d) Free Trade Area
Ans: d
45. Which one is not an international organization
(a) SAARC
(b) ASEM
(c) ASEAN
(d) CBDT
Ans: d
46. Which of the following is not an International Financial Institution
(a) ICICI
(b) IMF
(c) IDA
(d) World Bank
Ans: a
47. What one of the following is not the advantage of MNCs to the host country
(a) Increase in social activities
(b) increase in economic activities
(c) Utilisation of natural resource
(d) R&D efforts enhanced.
Ans: a
48. In terms of the PESTLE analysis, the liberalizing of international trade and tariff regimes could go in which section or sections?
(a) Political
(b) Legal
(c) Political and economic and legal
(d) Political and environmental
Ans: d
49. An 'industry recipe' can be defined as:
(a) An accepted pattern of operating and competing
(b) A tactic for anticipating a competitor's next move
(c) The hidden competencies that are difficult to imitate
(d) A strategic group
Ans: c
50. Typically, profits are highest in which stage of the industry life-cycle?
(a) Introduction
(b) Growth
(c) Maturity
(d) Decline
Ans: b
51. The corporate culture of a firm is more effectively carried to the managers who are
(a) Host country nationals
(b) Home country nationals
(c) Third country nationals
Ans: b
52. Posting of home country nationals for all key management positions throughout the globe is supported by:
(a) Geocentric staffing model.
(b) Polycentric staffing model.
(c) Ethnocentric staffing model.
Ans: c
53. Which of the following is NOT a business opportunity generated by globalization?
(a) Access to low-cost labor.
(b) Cheap International transport.
(c) Currency crises.
(d) Less stringent regulation of the business environment.
Ans: c
