Global Business, 5th Edition by Mike Peng | TEST BANK by ACADEMIAMILL

Chapter 01 - Introduction 1. A multinational enterprise is a firm that engages in foreign direct investment by directly investing in, controlling, and managing value-added activities in other countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Business and Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 2. The term “emerging markets” refers to the fastest-growing developing economies. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 3. Gross domestic product (GDP) is the sum of value added by resident firms, households, and governments operating in an economy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:54 PM 3/5/2022 11:24 AM

4. The majority of the global GDP is contributed by the emerging markets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 5. Purchasing power parity (PPP) is a conversion that determines the equivalent amount of goods and services different currencies can purchase. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 6. Purchasing power parity (PPP) is calculated as the sum of value added by resident firms, households, and governments operating in an economy. a. True b. False ANSWER: False POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 7. Global business includes both international and domestic business activities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Business and Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 8. International business can be defined as the investment in, controlling, and managing value-added activities in other countries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Business and Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 9. On the global economic pyramid, the Triad refers to developed economies consisting of North America, Europe, and Copyright Cengage Learning. Powered by Cognero.

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Japan. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 10. All the countries of the BRIC belong to the top tier of the global economic pyramid. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 11. The second tier of the global economic pyramid is made up of countries with a per capita annual income of more than $20,000. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 2:54 PM 3/5/2022 11:24 AM

12. The emerging markets of the world are placed at the top of the global economic pyramid. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 13. The global economic pyramid does not represent countries that have a per capita annual income of less than $2,000. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 14. The term "base of the pyramid" represents economies where individuals make less than $2,000 a year. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 15. Reverse innovations are innovations that are adopted first in the Triad-based multinationals and then diffused around the world. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 16. Reverse innovation is an example of bottom up innovation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Motivation Concepts - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 17. The Group of 20 includes the European Union (EU)—a regional bloc. a. True b. False ANSWER: True POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Why Study Global Business? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 18. Globalization has driven up the salaries of low-level jobs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Why Study Global Business? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 19. An international premium is a significant pay raise awarded to expatriate employees working abroad. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Study Global Business? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 20. New York has more Fortune Global 500 company headquarters than any other city. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 21. Overall, the focus on firm performance around the globe defines the field of global business more than anything else. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Unified Framework QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 22. An institution-based view suggests that the success and failure of firms are enabled and constrained by business rules and norms of the host nation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/5/2022 11:24 AM

23. Formal institutions include laws, regulations, and rules. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Unified Framework QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 24. The institution-based view places emphasis on the external factors that could affect a firm. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 25. Focusing on a firm’s internal resources and capabilities is the main emphasis of the resource-based view. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Unified Framework QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Analyze 11/12/2021 2:54 PM 3/5/2022 11:24 AM

26. Liability of foreignness is the inherent disadvantage experienced by foreign firms in host countries because of their non-native status. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Unified Framework QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 27. Most opponents of globalization view it as a long-run historical evolution since trade began. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 28. According to the pendulum view of globalization, globalization is a relatively new phenomenon triggered by the information revolution of the early 1990s. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 29. Scenario planning is a technique to prepare and plan exclusively for high-risk scenarios. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 30. Standardization of markets would lead to a state of semiglobalization. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 31. Semiglobalization is primarily caused by the practice of total isolation. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 32. The current state of globalization around the world is that of semiglobalization. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 33. Semiglobalization calls for adopting one way of doing business for all conditions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM Copyright Cengage Learning. Powered by Cognero.

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34. The strategy of treating the entire world as one market is known as localization. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 35. Many opponents of globalization are nongovernmental organizations. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 36. The term "emerging economies" has replaced the term _____. a. developed countries b. developing countries c. Triad markets d. first-world markets ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:54 PM 3/5/2022 11:24 AM

37. Which of the following is measured as the sum of value added by resident firms, households, and governments operating in an economy? a. Gross national product b. Gross national income c. Gross domestic product d. National reserve ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 38. A conversion that determines the equivalent amount of goods and services that different currencies can buy is known as _____. a. purchasing power parity b. foreign exchange rate c. country's deficit d. gross domestic product ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 39. The gross domestic product plus the income from non-resident sources abroad gives the ____. a. gross national product Copyright Cengage Learning. Powered by Cognero.

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b. per capita income c. purchasing power parity d. net national income ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 40. A firm that directly invests in, controls, and manages value-added activities in other countries is engaging in _____. a. foreign direct investment b. reverse innovation c. semiglobalization d. organizational slack ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Business and Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 41. Which of the following countries would be characterized as an emerging economy? a. Brazil b. USA c. Germany d. Japan ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 42. Which of the following groups is primarily composed of emerging economies? a. The Triad b. BRIC c. Group of Eight (G8) d. NAFTA ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 43. Which of the following countries is included in BRIC? a. Belgium b. Russia c. Italy d. Canada ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 44. The cushion of resources that allow an organization to adapt successfully to pressures is known by which of the Copyright Cengage Learning. Powered by Cognero.

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following terms? a. Triple bottom line b. Resilience c. Purchasing power parity d. Organizational slack ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-06 - LO: 01-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 45. The 1991 dissolution of the Soviet Union and the 2020 COVID-19 outbreak are both examples of which of the following types of events? a. Black swan b. Base of pyramid c. Just-in-time d. Just-in-case ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 46. Which of the following countries or regions make up the Triad? a. Taiwan, Hong Kong, and South Korea b. US, the EU, and China c. Brazil, India, and China d. North America, Europe, and Japan ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 47. Which of the following countries is represented in the Triad of the global economy? a. India b. China c. Japan d. Russia ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 48. Evaluating the likelihood of the most disruptive events to a firm's operations is a basic part of _____. a. stakeholder management b. scenario planning c. frugal innovation d. liability development ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/5/2022 11:24 AM

49. The base of the global economic pyramid is comprised of economies in which people make how much per capita per year? a. Between $2,000 to $20,000 b. Less than $2,000 c. Between $20,000 to $40,000 d. More than $40,000 ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 50. Which of the following is true of economies in the base of the global economic pyramid? a. They are composed of developed economies. b. They are composed of people from North America, Western Europe, and Japan. c. They are largely ignored by MNEs. d. They attract the largest foreign direct investment from MNEs. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 51. Which of the following is defined as an innovation that is adopted first in emerging economies and then diffused around the world? a. Reverse innovation b. Reverse-engineered innovation c. Top-down innovation d. Traditional innovation Copyright Cengage Learning. Powered by Cognero.

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ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 52. Which of the following would be an example of a traditional flow of innovation? a. Altering features of existing products to meet emerging market needs b. Launching a product in and for emerging economies c. Adopting an innovation first in emerging economies and then diffusing it around the world d. Introducing products from emerging markets into developed markets ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 53. Which of the following would be an example of a product undergoing a flow of reverse innovation in the global economy? a. Triad nation to Triad nation b. Triad nation to BoP economy c. Developed economy to developing economy d. BoP economy to Triad nation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Apply 11/12/2021 2:54 PM 3/5/2022 11:24 AM

54. Which of the following is true of the Group of 20 (G-20)? a. It only has 19 member countries. b. It doesn’t represent any European nation. c. It meets annually to discuss environmental issues. d. It includes many regional blocs. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Study Global Business? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 55. Expats often receive significant _____. a. international premiums b. government assistance c. economic penalties d. decreases in income ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Study Global Business? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 56. Which of the following does the institution-based view of global business lay emphasis on? a. Acquiring resources that belong to the host nation b. Consolidating the internal assets of a firm c. Focusing on the capabilities of the firm’s headquarters Copyright Cengage Learning. Powered by Cognero.

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d. Understanding the laws and values of the firm’s host nation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 57. Which view of global business suggests that the success and failure of firms are largely determined by their environments? a. Institution-based b. Stakeholder-based c. Resource-based d. Capability-based ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 58. Which view of global business focuses on external factors that affect a firm’s performance? a. Resource-based b. Asset-based c. Capability-based d. Institution-based ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Creation of Value Bloom's: Understand 11/12/2021 2:54 PM 3/5/2022 11:24 AM

59. The resource-based view of global business differs from the institution-based view of global business in that the resource-based view _____. a. emphasizes the strength of localization b. supports the ideology of total globalization c. focuses on the internal strengths on the firm d. advocates adopting a single method for achieving globalization ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 60. Which view of global business focuses on internal factors that can help a firm overcome its external environment? a. Resource-based b. Industry-based c. Socio-cultural-based d. Institution-based ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 61. The liability of foreignness is the inherent disadvantage faced by _____. a. domestic firms against other domestic firms that have engaged in global business Copyright Cengage Learning. Powered by Cognero.

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b. foreign firms in host nations due to their non-native status c. domestic firms from foreign firms setting up in their country d. foreign firms from their home country governments ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 62. Which of the following is true of globalization according to the “new force” perspective? a. It is a process of trade integration that has both advantages and disadvantages. b. It is a phenomenon that is technologically out of sync. c. It is a historical aspect of human trade. d. It is a western ideology focused on exploiting and dominating the world through MNEs. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 63. Which of the following is true of globalization according to the “pendulum view” perspective? a. Globalization is being interrupted by artificial barriers to the flows of goods, services, capital, and knowledge. b. Globalization is a Western ideology focused on exploiting and dominating the world through MNEs. c. Globalization is a not a one-directional phenomenon. d. Globalization is a recent phenomenon of human trade. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:54 PM DATE MODIFIED: 3/5/2022 11:24 AM 64. Which view of globalization suggests that globalization is neither recent nor one-directional? a. New-force view b. Long-run historical view c. Pendulum view d. Colonial view ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 65. Which of the following concepts suggests that while barriers to market integration at borders are high, they are not high enough to completely insulate countries from each other? a. Localization b. Technocapitalism c. Semiglobalization d. Total globalization ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM Copyright Cengage Learning. Powered by Cognero.

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66. Semiglobalization is a type of globalization that _____. a. adopts a strategy of treating the entire world as one market b. lies between total isolation and total globalization c. treats each country as a unique market d. considers each nation in isolation when conducting business ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 67. The strategy of treating each country as a unique market and in total isolation is referred to as _____. a. total globalization b. standardization c. semiglobalization d. localization ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 68. Which of the following strategies treats the entire world as one market? a. Total isolation b. Semiglobalization c. Standardization d. Localization ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Globalization and Semiglobalization Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 69. Which of the following would lead to the standardization of world markets? a. Semiglobalization b. Localization c. Total globalization d. Total isolation ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 70. MNEs from the Triad dominate the list of the 500 largest MNEs; their share has been _____. a. growing b. fluctuating c. steady over time d. shrinking ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM Copyright Cengage Learning. Powered by Cognero.

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71. How does purchasing power parity (PPP) affect the gross domestic product (GDP)? ANSWER: Purchasing power parity is a conversion that determines the equivalent amount of goods and services that different currencies can purchase. The PPP between two countries is the rate at which the currency of one country needs to be converted into that of a second country to ensure that a given amount of the first country’s currency will purchase the same basket of goods and services in the second country. For example, a dollar in Thailand can buy a lot more than in Japan. The global economy in 2021 was approximately $94 trillion in size, or total global gross domestic product (GDP) calculated at official, nominal exchange rates. However it was $142 trillion on the basis of purchasing power parity (PPP). POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Business and Globalization at a Crossroads QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 72. Explain the triple bottom line and how to perform well on it. ANSWER: Firm performance has multiple dimensions. In addition to traditional economic performance, firms are increasingly evaluated along the triple bottom line—consisting of economic, social, and environmental performance. To achieve excellent performance along the triple bottom line, managers need to take care of stakeholders. “Stakeholder” refers to any group or individual who can affect or is affected by the achievement of a firm’s objectives. Shareholders, customers, employees, and suppliers are primary stakeholders. As secondary stakeholders, governments, communities, and social and environmental groups are also important. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 73. How is reverse innovation helping emerging economies? ANSWER: One interesting recent development out of emerging economies is reverse innovation—an innovation that is adopted first in emerging economies and then diffused around the world. Traditionally, innovations flowed from developed to developing economies, with the needs Copyright Cengage Learning. Powered by Cognero.

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and wants of customers in the developed economies in mind. With reverse innovation, the origin of innovations is from the BoP, and the cost is much lower than if they had originated in developed economies. The products can then be marketed not only in the developed economy, but can also be brought back home and diffused throughout the world. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 74. How can gaining knowledge of global business advance someone's career? ANSWER:

Because many ambitious students aspire to join the top ranks of large firms, expertise in global business is often a prerequisite. Today, it is increasingly difficult, if not impossible, to find top managers at large firms without significant global competence. Of course, eventually, hands-on experience, not merely knowledge acquired from this course, will be required. However, mastery of the knowledge of, and demonstration of interest in, global business during your education will set you apart as a more ideal candidate to be selected as an expatriate manager (“expat”)—a manager who works abroad—to gain such an experience. POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Why Study Global Business? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 75. Explain the success and failure of global firms based on institution- and resource-based views. ANSWER: An institution-based view suggests that the success and failure of firms are enabled and constrained by institutions. By institutions, we mean the rules of the game. Doing business around the globe requires intimate knowledge about both formal rules (such as laws) and informal rules (such as values) that govern competition in various countries. Firms that do not do their homework and thus remain ignorant of the rules of the game in a certain country are not likely to emerge as winners. While the institution-based view primarily deals with the external environment, the resourceCopyright Cengage Learning. Powered by Cognero.

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based view focuses on a firm’s internal resources and capabilities. It starts with a simple observation: In harsh, unattractive environments, most firms either suffer or exit. However, against all odds, a few superstars thrive in these environments. In order to succeed, a firm must have certain valuable and unique firm-specific resources and capabilities that are not shared by competitors. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Unified Framework QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 76. Elaborate on the three prevalent views of globalization. ANSWER: Three major views conceptualize globalization as: • • •

a new force sweeping through the world in recent times a long-run historical evolution since the dawn of human history a pendulum that swings from one extreme to another from time to time

First, opponents of globalization suggest that it is a new phenomenon beginning in the late 20th century, driven by recent technological innovations and a Western ideology focused on exploiting and dominating the world through MNEs. A second view contends that globalization has always been part and parcel of human history. A third view suggests that globalization is the “closer integration of the countries and peoples of the world which has been brought about by the enormous reduction of the costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders.” POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 77. Explain the pendulum view of globalization. Copyright Cengage Learning. Powered by Cognero.

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ANSWER:

The pendulum view probably makes the most sense because it can help us understand the ups and downs of globalization. The current era of globalization originated in the aftermath of World War II, when major Western countries committed to global trade and investment. However, between the 1950s and the 1970s, this view was not widely shared. Countries focused on fostering and protecting domestic industries. But refusing to participate in global trade and investment ended up breeding uncompetitive industries. In contrast, four developing economies in Asia—Hong Kong, Singapore, South Korea, and Taiwan—earned their stripes as the “Four Tigers” by participating in the global economy. They became the only economies once recognized as less developed (low-income) by the World Bank to have subsequently achieved developed (high-income) status. Inspired by the Four Tigers, more countries and regions realized that joining the global economy was a must. As these countries started to emerge as new players in the global economy globalization rapidly accelerated. However, globalization, like a pendulum, is unable to keep going in one direction. Rapid globalization in the 1990s and the 2000s saw some significant backlash. Then in the mid2000s, however, worldwide GDP, cross-border trade, and per capita GDP all soared to historically high levels. Unfortunately, the party suddenly ended in 2008. The 2008–2009 global economic crisis showed, for better or worse, how interconnected the global economy has become. Numerous governments had to bail out their own troubled banks. Global output, trade, and investment plummeted, while unemployment skyrocketed. The 2008–2009 crisis became known as the Great Recession. Many people blamed globalization for the Great Recession. After unprecedented government intervention in developed economies, confidence was growing that the global economy had turned the corner and that the recession was ending. However, starting in 2010, the Greek debt crisis and then the broader PIGS debt crisis erupted. The already-slow recovery in Europe thus became slower, and unemployment hovered at very high levels. POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Globalization and Semiglobalization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM 78. Explain the role of nongovernmental organizations (NGOs) in globalization. ANSWER: Many of the opponents of globalization are nongovernmental organizations (NGOs), such as environmentalists, human rights activists, and consumer groups. Ignoring them will be a grave failure when doing business around the globe. Instead of viewing NGOs as opponents, many firms view them as partners. NGOs do raise a valid point when they insist that firms, especially MNEs, should have a broader concern for the various stakeholders affected by the actions of MNEs actions around the world. POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Business and Globalization at a Crossroads Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.01-05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/5/2022 11:24 AM

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Chapter 02 - Understanding Formal Institutions: Politics, Laws, and Economics 1. Institutional framework pertains only to a firm’s behavior. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 2. An institutional framework is made up of formal and informal institutions governing individual and firm behavior. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 3. The laws of a country are part of the formal institution. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 2:55 PM 3/7/2022 4:28 PM

4. The regulatory pillar supports both informal and formal institutions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 5. The normative pillar supports informal institutions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 6. The values and beliefs of a culture are examples of a formal institution. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 7. The cognitive pillar is the coercive power of governments. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 8. Force majeure is a method of interpreting a statute by understanding the legislative history leading up to the adoption of that statute. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Do Institutions Do? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 9. Disabling formal institutions does not affect transaction costs. a. True b. False ANSWER: False POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: What Do Institutions Do? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 10. Opportunism is a source of transaction costs. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Do Institutions Do? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 11. Transition economies have static institutions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Do Institutions Do? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 12. According to the institution-based view, managers and firms make choices outside institutional constraints. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: An Institution-Based View of Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 13. Proposition 1 of the institution-based view specifically concerns bounded rationality. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: An Institution-Based View of Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 14. Economic systems are examples of formal institutions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: An Institution-Based View of Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/7/2022 4:28 PM

15. Right-wing totalitarianism refers to the monopolization of power in the hands of a communist party. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Political Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 16. Theocratic totalitarianism refers to the monopolization of political power in the hands of one religious party. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Political Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 17. Totalitarian countries have less political risk than democratic ones. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Political Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:55 PM 3/7/2022 4:28 PM

18. Firms operating in democracies never confront political risk. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Political Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 19. Civil law uses comprehensive statutes and codes as a primary means to form legal judgments. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 20. The common law tradition is mostly spread in non-English speaking countries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 21. Civil law has more flexibility than common law. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 22. Islamic law is the only surviving example of a theocratic legal system that is formally practiced by some existing governments. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 23. In the United States, only 1% of the land is formally registered. a. True b. False ANSWER: False Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 24. Patents are exclusive rights of firms to use specific names and brands. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 25. Trademarks are legal rights awarded by government authorities to inventors of new products or processes. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 26. Intellectual property rights need to be asserted through a formal system to both provide incentive for innovation and to Copyright Cengage Learning. Powered by Cognero.

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punish violators. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 27. Intellectual property rights are enforced though the informal institution system. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 28. A copyright is an example of an intellectual property. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 2:55 PM 3/7/2022 4:28 PM

29. In a pure market economy, the government only performs functions that the private sector cannot do. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 30. In a command economy, all factors of production are government-owned or state-owned. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 31. A mixed economy has elements of both a market economy and a command economy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Environmental Influence Bloom's: Analyze 11/12/2021 2:55 PM 3/7/2022 4:28 PM

32. All Western countries practice the absolute laissez-faire philosophy in trade. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 33. In private ownership, liquidation of a firm is forced by competition. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 34. The cultural school of thought in economic development suggests that rich countries tend to be endowed with natural resources. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 35. The Washington Consensus emphasizes using government intervention over state ownership in business. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 36. The main supportive pillars of the informal institutions are _____. a. normative and cognitive b. regulatory and normative c. regulatory, normative, and cognitive d. cognitive and regulatory ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 37. In which of the following ways do formal institutions regulate trade? Copyright Cengage Learning. Powered by Cognero.

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a. By inducing uncodified ethical beliefs into society b. By putting faith in individuals to expose perceived wrong doings c. By allowing the cultural beliefs of a society to dictate the terms of trade d. By imposing laws that make certain trades unacceptable ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Institutions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 38. What type of institution is represented by laws, regulations, and rules? a. Normative b. Sociocultural c. Cognitive d. Formal ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 39. Which pillar refers to the coercive power of governments? a. Normative b. Regulatory c. Cognitive d. Informal ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 40. Which of the following would be considered an example of informal institutions? a. Laws b. Regulations c. Ethics d. Rules ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 41. Which of the following would be considered an example of formal institutions? a. Laws b. Norms c. Cultures d. Ethics ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM Copyright Cengage Learning. Powered by Cognero.

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42. Which pillar refers to the internalized, taken for granted values and beliefs that guide individual and firm behavior? a. Normative b. Regulatory c. Cognitive d. Formal ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 43. In which of the following examples can the role of the cognitive pillar be identified? a. A firm being exposed after one of its employees turned whistleblower b. A firm being punished for corporate espionage by the courts c. A firm not being able to sell a certain product in a country due to the prevalent cultural beliefs d. A firm outsourcing its jobs ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 44. The key role of institutions is to do what in business transactions? a. Reduce uncertainty b. Increase normative limits c. Increase opportunism d. Reduce resource costs ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Do Institutions Do? Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 45. What long-standing legal doctrine excuses firms from living up to the terms of a deal in the event of natural disasters or other calamities? a. De minimis b. Nolo contendere c. Force majeure d. Travaux préparatoires ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Do Institutions Do? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 46. Which of the following would be an example of a force majeure defense for a seller? a. If the seller decides to stop delivery out of fear of nonpayment b. If the customer has already accepted nonconforming goods c. If the goods to be delivered are destroyed in an earthquake d. If the seller places warranties on the goods ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Do Institutions Do? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM Copyright Cengage Learning. Powered by Cognero.

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47. Which view focuses on the dynamic interactions between the laws, cultures and ethics of a country and a firm, and considers firm behaviors as the outcome of such an interaction? a. Internal strength-based b. Competency-based c. Institution-based d. Resource-based ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: An Institution-Based View of Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 48. Which of the following is a proposition of the institution-based view? a. Decisions based on bounded rationality should be avoided. b. Dependency on informal constraints will always increase the political risks associated with a firm. c. When formal constraints are unclear, informal constraints will play a larger role in reducing uncertainty and providing constancy to managers and firms. d. Informal constraints always increases transaction costs for the firm. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: An Institution-Based View of Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 49. A fundamental aspect of what political system is that it effectively conducts global business by providing an individual the right to freedom of expression and organization? a. Communist totalitarianism b. Right-wing totalitarianism c. Democracy d. Theocracy Copyright Cengage Learning. Powered by Cognero.

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ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Political Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 50. Which of the following is a feature of right-wing totalitarianism? a. It does not curtail an individual’s right to freedom of expression and organization. b. It concentrates power in the hands of one or more religious groups. c. It bases its economic policies on communist ideologies. d. It does not allow room for political freedom. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Political Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 51. Which of the following is true of the civil law system? a. It is the most widely distributed legal system around the world. b. It originated in England, and was then spread as the legal system for all its former colonies. c. It is shaped by precedents and traditions from previous judicial decisions. d. It allows judges to interpret the law before making judicial decisions. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Legal Responsibilities Bloom's: Remember 11/12/2021 2:55 PM 3/7/2022 4:28 PM

52. Which of the following is true of the common law system? a. It is the oldest legal system in the world. b. It has spread to many English-speaking countries and their (former) colonies. c. It bases its legal judgment primarily on the dominant religion of the country. d. It does not allow interpretations of the law by judges. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 53. What type of law refers to a legal system based on religious teachings? a. Common law b. Theocratic law c. Civil law d. Right-wing totalitarian law ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 54. Intellectual property specifically refers to which type of property? a. Tangible b. Intangible c. Real Copyright Cengage Learning. Powered by Cognero.

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d. Moveable ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 55. Which of the following is an example of an intellectual property? a. Home b. Scientist’s laboratory c. Office d. Website ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 56. Legal rights awarded by government authorities to inventors of new products are _____. a. copyrights b. patents c. trade secrets d. trademarks ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Legal Responsibilities Bloom's: Understand 11/12/2021 2:55 PM 3/7/2022 4:28 PM

57. Exclusive legal rights of authors and publishers to publish and disseminate their work are _____. a. patents b. trademarks c. copyrights d. trade secrets ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 58. Exclusive legal rights of firms to use specific names, brands, and designs to differentiate their products from others are _____. a. patents b. trademarks c. copyrights d. trade secrets ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 59. An example of intellectual property rights is rights associated with ownership of _____. a. vehicles Copyright Cengage Learning. Powered by Cognero.

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b. trademarks c. buildings d. business contracts ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 60. Intellectual property rights need to be enforced through a formal system in order to _____. a. create IP rights that adhered to the norms of individual countries b. force firms to enforce IP rights through an informal system c. make sure that firms follow theocratic laws d. encourage firms to innovate while strictly adhering to IPR guidelines ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Legal Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 61. Which of the following economies would be characterized as having a laissez faire policy? a. Pure market economy b. Mixed economy c. Command economy d. Socialist economy ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 62. Which of the following is true of a pure market economy? a. All factors of production are owned by the government. b. All factors of production are privately owned. c. It has elements of both a market economy and a command economy. d. Its policies are based on religious decree. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 63. Which of the following is true of a command economy? a. All factors of production are privately owned. b. The government only performs those functions that the private sector cannot perform. c. It does not allow private entrepreneurship. d. It strictly follows the doctrine of laissez faire. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 64. For which of the following types of economies would the factors of production depend on the relative distribution of Copyright Cengage Learning. Powered by Cognero.

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market forces versus command forces? a. Mixed economy b. Pure market economy c. Strict laissez faire economy d. Command economy ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Economic Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 65. Which of the following is the argument used by proponents of the “cultural” explanation for the difference in economic development across the globe? a. Rich countries have a smarter and harder-working population b. Rich countries tend to be endowed with natural resources c. Rich countries tend to have better market-supporting institutions d. Rich countries generally tend to have a democratic style of government ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 66. Which of the following is true of private ownership? a. It tends to force firms into liquidation due to high competition. b. It empowers the government to determine firm entry. c. It allows financing only through nationalized banks. d. Its primary objective is protecting jobs and minimizing social unrest. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 67. State ownership differs from private ownership in that in state ownership _____. a. maximizing profits is the sole objective of a firm b. management appointments are made by owners and investors based on merit c. protecting jobs and minimizing social unrest is the objective of a firm d. managers’ compensation is determined by competitive market forces ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 68. Private ownership differs from state ownership in that in private ownership _____. a. maximizing profits is the primary objective of a firm b. protecting jobs and minimizing social unrest is the primary objective of a firm c. establishing a firm is determined by government officials and bureaucrats d. failing firms deemed too big to fail may be supported by taxpayer money indefinitely ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/7/2022 4:28 PM

69. Which of the following is true of private ownership? a. Firms are established by entrepreneurs, owners, and investors. b. Management appointments are made by government officials and bureaucrats who may also use noneconomic criteria. c. Firm’s objective would be to find a “fair” deal for all stakeholders. d. Firms deemed “too big to fail” may be supported by taxpayer dollars indefinitely. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 70. Which of the following is true of the Washington Consensus? a. It provided measures that governments can take in order to move toward a command economy. b. It listed the bail-out procedures that governments could follow in case of a firm’s bankruptcy. c. It advocated more governmental control in trade. d. It advocated the superiority of private ownership over state ownership. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.02-07 - LO: 02-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 71. Identify the basic characteristics of formal and informal institutions. ANSWER: An institutional framework is made up of formal and informal institutions governing individual and firm behavior. Formal institutions include laws, regulations, and rules. Their primary supportive pillar, the regulatory pillar, is the coercive power of governments. Informal institutions include norms, cultures, and ethics. The two main supportive pillars are normative and cognitive. The normative pillar refers to how the values, beliefs, and actions of other relevant players—collectively known as norms—influence the behavior of Copyright Cengage Learning. Powered by Cognero.

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focal individuals and firms. The cognitive pillar refers to the internalized, taken-for-granted values and beliefs that guide individual and firm behavior. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Institutions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 72. What are the two core propositions of the institution-based view? ANSWER: The first core proposition of the institution-based view is that managers and firms rationally pursue their interests and make choices within the formal and informal constraints in a given institutional framework. The second proposition is that while formal and informal institutions combine to govern firm behavior, in situations where formal constraints are unclear or fail, informal constraints will play a larger role in reducing uncertainty and providing constancy to managers and firms. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: An Institution-Based View of Global Business QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 73. Outline the differences between democracy and totalitarianism. ANSWER: Democracy is a political system in which citizens elect representatives to govern the country on their behalf. A fundamental aspect of democracy that is relevant to the effective conduct of global business is an individual's right to freedom of expression and organization. Totalitarianism is a political system in which one person or party exercises absolute political control over the population. A totalitarian regime can also be known as a dictatorship. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Political Systems QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 74. What is totalitarianism? Outline the four major types of totalitarian systems. ANSWER: The opposite end of democracy is totalitarianism (also known as dictatorship), which is defined as a political system in which one person or party exercises absolute political control over the population. Communist totalitarianism centers on a communist party. This system had been embraced throughout Central and Eastern Europe and the former Soviet Union until the late 1980s. It is still practiced in China, Cuba, Laos, North Korea, and Vietnam. Right-wing totalitarianism is characterized by its intense hatred of communism. One party, typically backed by the military, restricts political freedom, arguing that such freedom would lead to communism. In the postwar decades, Argentina, Brazil, Chile, Indonesia, South Africa, South Korea, and Taiwan practiced right-wing totalitarianism. Most of these countries have recently become democratic. Theocratic totalitarianism refers to the monopolization of political power in the hands of one religious party or group. Iran and Saudi Arabia are leading examples. Tribal totalitarianism refers to one tribe or ethnic group monopolizing political power and oppressing other tribes or ethnic groups POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Political Systems QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 75. Define political risk. How is it related to nationalization? ANSWER: Political risk is risk associated with political changes that may negatively influence domestic and foreign firms. The most extreme political risk may lead to nationalization (expropriation) of foreign assets. This happened in many totalitarian countries from the 1950s through the 1970s. It has not become a thing of the past. Recently, Argentina expropriated the assets of YPF—the subsidiary of Spanish oil firm Repsol. Zimbabwe demanded that foreign mining companies cede 51% of their equity without compensation. It is hardly surprising that leaders of foreign firms are sick and tired of such expropriation and would rather go to “greener pastures” elsewhere. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Political Systems Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 76. Compare and contrast civil law, common law, and theocratic law. ANSWER: Civil law was derived from Roman law and strengthened by Napoleon’s France. It is “the oldest, the most influential, and the most widely distributed around the world.” It uses comprehensive statutes and codes as a primary means to form legal judgments. More than 80 countries practice civil law. Common law, which is English in origin, is shaped by precedents and traditions from previous judicial decisions. Common law has spread to more than 40 English-speaking countries and their (former) colonies. Relative to civil law, common law has more flexibility, because judges have to resolve specific disputes based on their interpretation of the law, and such interpretation may give new meaning to the law, which will shape future cases. Civil law has less flexibility, because judges only have the power to apply the law. On the other hand, civil law is less confrontational, because comprehensive statutes and codes serve to guide judges. Common law is more confrontational, because plaintiffs and defendants, through their lawyers, must argue and help judges to favorably interpret the law, largely based on precedents. The third legal family is theocratic law, a legal system based on religious teachings. Examples include Jewish law and Islamic law. Although Jewish law is followed by some elements of the Israeli population, it is not formally embraced by the Israeli government. Islamic law is the only surviving example of a theocratic legal system that is formally practiced by some governments, such as those in Iran and Saudi Arabia. The holy book of Islam advises against certain business practices, such as a ban on direct face-to-face contact between unrelated men and women in public. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Legal Systems QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 77. How does an institution-based view understand intellectual property rights violation? ANSWER: Overall, an institution-based view suggests that the key to understanding IPR violation is to realize that IP violators are not amoral monsters, but ordinary people and firms. Given an institutional environment of weak IPR protection, violators have made a rational decision by investing in skills and knowledge in this business. No high-school graduate will say, “My Copyright Cengage Learning. Powered by Cognero.

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dream career is counterfeiting.” Nevertheless, thousands of individuals and firms voluntarily choose to be involved in this business worldwide. Stronger IPR protection—not only heavier punishment, but also better education and more lucrative legitimate job opportunities—may reduce their incentive to do so. During their earlier stages of development, many of today’s developed countries did not respect IPR, especially IPR held by foreign firms. Over time, as their economies became more innovation driven, they became more respectful of IPR—it was rational to do so. Therefore, to the same extent that developed economies voluntarily enhanced IPR protection when their economies became sufficiently innovation driven, there is hope that emerging economies will similarly improve their IPR protection going forward. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Legal Systems QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-05 - LO: 02-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM 78. Describe the differences among the three economic systems. ANSWER: A pure market economy is characterized by the "invisible hand" of market forces noted by Adam Smith in The Wealth of Nations in 1776. The government takes a hands-off approach known as laissez faire. The government should only perform functions the private sector cannot perform. A pure command economy is defined by a government taking, in the words of Lenin, the "commanding height" in the economy. All factors of production should be governmentowned or state-owned, and all supply, demand, and pricing are planned by the government. A mixed economy has elements of both a market economy and a command economy. It boils down to the relative distribution of market forces versus command forces. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Economic Systems QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.02-06 - LO: 02-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:55 PM DATE MODIFIED: 3/7/2022 4:28 PM

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Chapter 03 - Informal Institutions: Cultures, Ethics, and Norms 1. According to the institution-based view, informal institutions must be sought when formal institutions fail. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 2. The cultural norms of a country is an example of an informal institution. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 3. Informal institutions are based on the rules and legal systems of an economy. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 2:58 PM 3/7/2022 4:11 PM

4. Informal institutions are closely related to ethnocentrism. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 5. Informal institutions are constructed on the regulatory pillars of a society. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 6. English-speaking countries contribute the largest share of global business output. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 7. Dividing individuals of a society into hierarchical classes is an example of social stratification. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 8. Social mobility refers to the degree to which people can move from one area to another area in a country. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 9. Social structure is the outcome of a society’s formal and informal rules of the game. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 10. In socially mobile societies, education functions as a means to maintain social stratification. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 11. In high-context cultures, communication is usually taken at face value without much reliance on unspoken context. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 12. The United States has a low-context culture in business. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 13. The GLOBE project identifies a total of five clusters. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 14. The Ronen and Shenkar cluster divides the world into eight civilizations. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM Copyright Cengage Learning. Powered by Cognero.

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15. Addressing bosses with honorary titles would be an instance of low power distance in a firm. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 16. Power distance is the extent to which less powerful members within a country expect and accept that power is distributed unequally. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 17. A situation in which a boss regularly takes his employees out for casual lunches indicates a low power distance within the firm. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Individual Dynamics Bloom's: Apply 11/12/2021 2:58 PM 3/7/2022 4:11 PM

18. In individualistic societies, ties between individuals are relatively close. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 19. The United States is often classified as a collectivist society. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 20. A country with low masculinity has very subtle differentiation between gender roles in society. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 21. Cultures of low uncertainty avoidance tend to resist change. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 22. High uncertainty avoidance cultures are characterized by a greater willingness to take risk with change. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 23. Members of short-term orientation societies emphasize perseverance and savings for future betterment. a. True b. False ANSWER: False POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 24. The average length of contracts is longer in low-context countries than in high-context countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 25. Managers in high power distance countries are more inclined toward centralized authority. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 26. Managers in low uncertainty avoidance countries tend to rely more on rules than experience. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 27. Ethical imperialism suggests that all ethical standards are relative. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ethics QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 28. “Respect for institutional context” is one of the guiding principles proposed by business ethicist Thomas Donaldson. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ethics QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/7/2022 4:11 PM

29. A proactive firm would anticipate responsibility and do more than required when facing ethical challenges. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Norms and Ethical Challenges QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-04 - LO: 03-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 30. According to Max Weber, Protestant work ethics led to the rise of capitalism in Europe. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 31. Confucianism has been a leading philosophy in East Asian business ethics. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Understand 11/12/2021 2:58 PM 3/7/2022 4:11 PM

32. Collectivists are more collaborative when dealing with in-group members. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 33. Individualists make more distinction between in-group and out-group members than collectivists. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 34. Cultural intelligence emphasizes the understanding of informal institutions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 35. In acquiring cultural intelligence, awareness refers to the ability to identify the symbols, rituals, and taboos in other cultures. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 36. The quality of a society that perceives its own culture, ethics, and norms as natural, rational, and morally right is known as what? a. Polycentrism b. Ethnocentrism c. Anthropocentrism d. Social mobility ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 37. Which of the following aspects of a culture would be categorized as an informal institution? Copyright Cengage Learning. Powered by Cognero.

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a. Ethics b. Politics c. Economics d. Laws ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 38. Which of the following is a factor for English being accepted as the global business language? a. English speakers have traditionally been more mobile than non-English speakers. b. English is far easier to translate to and from, than any other language. c. English-speaking countries contribute the largest share of global business output. d. English is the largest language in terms of the number of native speakers. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 39. Which of the following languages is considered the lingua franca of global business? a. English b. Chinese c. Spanish d. French ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 40. The hierarchical arrangement of individuals into categories such as classes, castes, or divisions within a society is referred to as _____. a. social dumping b. social stratification c. social facilitation d. social loafing ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 41. Social mobility refers to the degree to which _____. a. members from a collectivist society move to an individualist society b. members from a lower social category move to a higher social category c. people from emerging economies move to developed economies d. people from developed economies move to emerging economies ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM Copyright Cengage Learning. Powered by Cognero.

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42. Which of the following statements is true about low-context cultures? a. Communication relies a lot on the underlying unspoken context. b. Communication depends equally between the unspoken and spoken contexts. c. Communication primarily depends on body language. d. Communication is usually taken at face value. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 43. In what type of culture is the unspoken context as important as the words used during communication? a. high-context b. low-context c. individualistic d. collectivist ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 44. What is the highest cultural grouping of people and the broadest level of cultural identity people have? a. Clan b. Chiefdom c. Civilization d. Country ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 45. Which of the following cultural clusters contains the group “Hindu”? a. The GLOBE clusters b. The Huntington civilizations c. The Ronen and Shenkar clusters d. The Kogut-Singh cultural index ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 46. Which of the following is true of the GLOBE clusters? a. It divides all the nations of the world into western and eastern cultures. b. It divides the nations of the world into ten clusters. c. It divides the nations of the world based on civilizations. d. It divides the nations of the world based on their religious affinity. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM Copyright Cengage Learning. Powered by Cognero.

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47. In a collectivist society, _____. a. family units are highly valued b. individual identity is considered separate from one's group c. ties between individuals are relatively loose d. individual achievement and freedom are highly valued ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 48. In an individualistic society, _____. a. an individual's identity is fundamentally tied to the identity of his or her group b. ties between individuals are very strong c. an individual's identity is fundamentally his or her own d. collective accomplishments are more important than individual accomplishments ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 49. Which of the following methods of understanding cultural differences characterizes sex role differentiation in cultures? a. Humanistic approach b. Cluster approach c. Context approach d. Dimensional approach ANSWER: d Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 50. Which of the following is one of the five dimensions outlined in the dimensions approach? a. Language b. Work ethics c. Religion d. Uncertainty avoidance ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Motivation Concepts - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 51. Which of the following is a characteristic of high masculinity societies? a. Women are more likely to become politicians and soldiers. b. Men frequently assume the role of nurses, teachers, and househusbands. c. There is a sharp role differentiation along gender lines. d. Managers are less visible, intuitive rather than decisive, and accustomed to seeking consensus. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

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52. What term refers to the extent to which members in a culture tolerate ambiguous situations? a. Uncertainty avoidance b. Lingua franca c. Ethnocentrism d. Long-term orientation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Differences QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 53. Which of the following descriptions summarizes ethical imperialism? a. It is a perspective that each firm should cultivate its own ethics. b. It is a perspective that there is only one set of ethics. c. It is a perspective that ethical standards are relative. d. It is a perspective that ethical standards can never be codified. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ethics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 54. Which of the following is a set of guidelines for helping a firm make ethical decisions? a. Operating agreement b. Certificate of incorporation c. Mission statement d. Code of conduct Copyright Cengage Learning. Powered by Cognero.

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ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ethics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 55. An American firm operating in the Middle East struggles with enforcing rules opposing sexual discrimination against Muslim women working in its management. Which of the following describes the American firm’s stand against enforcing local norms? a. Ethical relativism b. Cultural relativism c. Ethical imperialism d. Xenocentrism ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Ethics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 56. Which of the following is one of the three "middle-of-the-road" guiding principles proposed by business ethicist Thomas Donaldson? a. Firms should try to export its home-country ethics to the global market. b. Firms should not base their ethics on local institutions. c. Firms should be culturally sensitive when conducting business abroad. d. Firms should follow a universal ethical business code regardless of geography. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ethics QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 57. What legislation enacted in 1977 bans U.S. firms from bribing non-U.S. officials? a. Trust Against Bribery and Distortion Act b. Foreign Corrupt Practices Act c. Statute of Limitation on Foreign Direct Investment Act d. Bribery of Foreign Public Officials Act ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ethics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 58. Which of the following is true of the reactive strategy to ethical challenges in business? a. It admits responsibility and does less than what is required. b. It accepts responsibility and does more than what is required. c. It anticipates institutional changes and does more than what is required. d. It denies responsibility and takes a passive approach. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Norms and Ethical Challenges QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 59. A firm that has adopted an accommodative strategy for ethical challenges in business _____. a. accepts responsibility and does all that is required Copyright Cengage Learning. Powered by Cognero.

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b. denies responsibility and does less than required c. admits responsibility but does the least that is required d. anticipates institutional changes and does more than is required ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Norms and Ethical Challenges QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 60. According to sociologist Max Weber, what is the ideological foundation that led to the rise of Western economic development? a. The Industrial Revolution b. Protestant work ethics c. Catholicism d. Colonialism ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 61. What did sociologist Max Weber criticize as a leading cause of Asian backwardness? a. Atheism b. Buddhism c. Confucianism d. Deism ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 62. What term refers to the coexistence of both cultural divergence and cultural convergence? a. Cultural concurrence b. Covariance c. Limited divergence d. Crossvergence ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 63. Members of a group or collective consider each other as _____. a. in-group members b. out-group members c. individualistic members d. cross-cultural members ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 64. Individualists differ from collectivists in that individualists are _____. Copyright Cengage Learning. Powered by Cognero.

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a. less collaborative with in-group members b. more collaborative with out-group members c. more opportunistic when dealing with in-group members d. more discriminatory against out-group members ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 65. Which of the following is true of individualists and collectivists? a. Individualists are more collaborative when dealing with in-group members. b. Collectivists are more opportunistic when dealing with out-group members. c. Individualists discriminate more harshly against out-group members. d. Collectivists are opportunistic when dealing with in-group members. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 66. Tyrone has described himself as an individualist. This means that he _____. a. takes advantage of opportunities to advance his career b. is untrustworthy c. discriminates harshly against out-group members d. can't work with other people ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 67. Miranda is an American expatriate starting a new job in China. Which of the following should she do? a. Expect her Chinese coworkers to learn American norms b. Continue to speak only English because it's the language of business c. Rely on relationships formed in the United States d. Establish relationships in China ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 68. When an expatriate came to work with Stephan's department, Stephan created a comfort zone for the expatriate by adopting the expatriate's general posture and communication style without resorting to mockery. What is Stephan doing? a. Demonstrating that his own culture is better. b. Acknowledging that the expatriate's culture is better. c. Respecting cultural differences. d. Ignoring cultural differences. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM Copyright Cengage Learning. Powered by Cognero.

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69. The most effective way to understand a foreign culture is by _____. a. studying the culture b. immersing totally in the culture c. making friends with people who are members of the culture d. respecting the culture ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 70. Which of the following is the final phase of acquiring cultural intelligence? a. Skills b. Awareness c. Knowledge d. Divergence ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 71. Define culture. Describe the four major components of culture. ANSWER: Culture is the collective programming of the mind which distinguishes the members of one group or category of people from another. The four major components of culture are: (1) language, (2) religion, (3) social structure, and (4) education. Language: Chinese is the largest language in terms of the number of native speakers. English is a distant second. Yet, English is the global business language. It is known as the lingua franca of business communication. First, English-speaking countries contribute the largest share (about one-third) of global output. Such economic dominance not only drives trade and Copyright Cengage Learning. Powered by Cognero.

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investment ties between English-speaking countries and the rest of the world, but also generates a constant stream of products and services marketed in English. Second, recent globalization has called for the use of one common language. Countries sharing a common language obviously will find it easier and cheaper to trade with each other. Religion: The four leading religions are (1) Christianity, (2) Islam, (3) Hinduism, and (4) Buddhism. Because religious differences have led to numerous challenges, knowledge about religions is crucial even for non-religious officials. Social structure: Social structure refers to the way a society broadly organizes its members— with rigidity or flexibility. It is the outcome of a society’s formal and informal rules of the game that give birth to its norms and values. Education: From an early age, schools teach children mainstream values and norms and foster a sense of cultural identity. In socially rigid societies, education, especially access to a small number of elite schools, helps to maintain social stratification. On the other hand, socially mobile societies break down social barriers with education. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Culture QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.03-01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 72. Describe the context approach to understanding cultural differences. ANSWER: Of the three main approaches probing into cultural differences, the context approach is the most straightforward. It focuses on a single dimension: context. Context is the underlying background upon which social interaction takes place. In low-context cultures (such as North American and Western European countries), communication is usually taken at face value without much reliance on unspoken context. In other words, “no” means “no.” In contrast, in high-context cultures (such as Arab and Asian countries), communication relies a lot on the underlying unspoken context, which is as important as the words used. Context is important because failure to understand the differences in interaction styles may lead to misunderstanding. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:58 PM Copyright Cengage Learning. Powered by Cognero.

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73. Explain the dimension approach of power distance in cultures. ANSWER: Power distance is the extent to which less powerful members within a country expect and accept that power is distributed unequally. In high power distance Brazil, the richest 10% of the population pockets approximately 50% of the national income, and everybody accepts this as “the way it is.” In low power distance Sweden, the richest 10% only obtains 22% of the national income. Even within the same cluster, there are major differences. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Differences QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.03-02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 74. Explain how the "middle-of-the-road" strategies bridge the disparity between ethical relativism and ethical imperialism. ANSWER: Three “middle-of-the-road” guiding principles have been proposed by Thomas Donaldson, a business ethicist. First, respect for human dignity and basic rights (such as those concerning health, safety, and the needs for education instead of working at a young age) should determine the absolute minimal ethical thresholds for all operations around the world. Second, respect for local traditions suggests cultural sensitivity. If gifts are banned, foreign firms can forget about doing business in China and Japan. Whereas hiring employees’ children and relatives instead of more qualified applicants is illegal according to US equal opportunity laws, Indian companies routinely practice such nepotism, which would strengthen employee loyalty. What should US companies setting up subsidiaries in India do? Donaldson advises that such nepotism is not necessarily wrong—at least in India. Finally, respect for institutional context calls for a careful understanding of local institutions. Codes of conduct banning bribery are not very useful unless accompanied by guidelines for the scale of appropriate gift-giving or -receiving. Citigroup allows employees to accept noncash gifts with nominal value of less than US$100. The Economist lets its journalists accept any noncash gift that can be consumed in a single day—thus, a bottle of wine is acceptable, but a case of wine is not. Overall, these three principles, although far from perfect, can help managers improve the quality of their decisions. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ethics QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.03-03 - LO: 03-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Analyze 11/12/2021 2:58 PM 3/7/2022 4:11 PM

75. Describe the different strategic responses to ethical challenges. ANSWER: How firms strategically respond to ethical challenges is often driven, at least in part, by norms. Four broad strategic responses are: (1) reactive, (2) defensive, (3) accommodative, and (4) proactive strategies. A reactive strategy is passive. When problems arise, denial is usually the first line of defense. In the absence of formal regulation, the need to take necessary action is neither internalized through cognitive beliefs nor becoming any norm in practice. A defensive strategy focuses on regulatory compliance. In the absence of regulatory pressures, firms often fight informal pressures coming from the media and activists. An accommodative strategy features emerging organizational norms to accept responsibility and a set of increasingly internalized cognitive beliefs and values toward making certain changes. These normative and cognitive values may be shared by a number of firms, thus leading to new industry norms. Finally, proactive firms anticipate institutional changes and do more than is required. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Norms and Ethical Challenges QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.03-04 - LO: 03-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 76. A common stereotype is that players from collectivist societies are more collaborative and trustworthy, and that those from individualist societies are more competitive and opportunistic. What do you think the relation between collectivism/individualism and opportunistic behavior is? How does the understanding of collectivism/individualism help managers? ANSWER: One cultural dimension, individualism/collectivism, may hold the key to an improved understanding of opportunism. The common stereotypes about players from collectivist and individualist societies is a superficial understanding, and is not necessarily the truth. Collectivists are more collaborative only when dealing with in-group members—individuals and firms regarded as a part of their own collective. The flip side is that collectivists discriminate more harshly against out-group members— individuals and firms not regarded as a part of “us.” On the other hand, individualists, who believe that every person (firm) is on his/her (its) own, make less distinction between ingroup and out-group members. Therefore, while individualists may indeed be more opportunistic than collectivists when dealing with in-group members (this fits the stereotype), collectivists may be more opportunistic when dealing with out-group members. This insight can help managers and firms better deal with one another. Only through repeated social interactions can collectivists assess whether to accept newcomers as in-group members. If foreigners who, by definition, are from an out-group refuse to show any interest in joining the in-group, then it is fair to take advantage of them. This is why many crossculturally naïve Western managers and firms often bemoan being taken advantage of in Copyright Cengage Learning. Powered by Cognero.

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collectivist societies—they are simply being treated as “deserving” out-group members. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.03-05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 77. What are the six rules of thumb when going overseas and how can they help expatriates? ANSWER: The following six rules of thumb can help expatriates gain skills that lead to success in foreign locations. • • • • • •

Be prepared. Slow down. Establish trust. Understand the importance of language. Respect cultural differences. Understand that no culture is inherently superior in all aspects.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.03-06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 4:11 PM 78. Define cultural intelligence. Describe the process of acquisition of cultural intelligence. ANSWER: Cultural intelligence is defined as an individual’s ability to understand and adjust to new cultures. Acquisition of cultural intelligence passes through three phases: (1) awareness, (2) knowledge, and (3) skills. Awareness refers to the recognition of both the pros and cons of your “mental software” and the appreciation of people from other cultures. Knowledge refers to the ability to identify the symbols, rituals, and taboos in other cultures—also known as cross-cultural literacy. Finally, skills are based on awareness and knowledge, plus good practice. Copyright Cengage Learning. Powered by Cognero.

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Chapter 04 - Resources and Capabilities 1. The resource-based view is developed on the insight that competitors do not share certain resources and capabilities specific to one's firm. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 2. In global business, the institution-based view deals with internal strengths and weaknesses. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 3. A SWOT analysis deals with a firm’s external S (strengths) and W (weaknesses), and internal O (opportunities) and T (threats). a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Creation of Value Bloom's: Remember 11/12/2021 2:58 PM 3/7/2022 9:29 PM

4. A firm's resources and capabilities are the tangible and intangible assets used to choose and implement its strategies. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 5. Tangible resources and capabilities are assets that are observable and easily quantified. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 6. A firm’s financial resources and capabilities are an example of its intangible assets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 7. A firm’s reputational resources are an example of its tangible resources and capabilities. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 8. The value chain exclusively deals with a firm’s primary activities. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 9. Benchmarking is the process of converting a firm-specific activity into an industry-specific activity. a. True b. False ANSWER: False Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 10. Commoditization is the point at which an activity becomes proprietary or firm-specific. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 11. Activities with high levels of commoditization should be performed in-house to increase competitiveness. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 12. Onshoring is the process of turning over an organizational activity to a foreign supplier that will perform it on behalf Copyright Cengage Learning. Powered by Cognero.

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of the focal firm. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 13. Offshoring refers to setting up subsidiaries in foreign locations to perform in-house work. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 14. Product design is considered an upstream activity in the value chain. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 2:58 PM 3/7/2022 9:29 PM

15. The process of outsourcing to a domestic firm is known as captive sourcing. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 16. Captive sourcing is also known as foreign direct investment (FDI). a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 17. The rarity of a firm’s resources and capabilities is studied under the VRIO framework. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Creation of Value Bloom's: Remember 11/12/2021 2:58 PM 3/7/2022 9:29 PM

18. The SWOT analysis exclusively focuses on the value and imitability aspects of the resources and capabilities of a firm. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 19. According to the VRIO framework, imitable but well organized resources and capabilities will provide sustained competitive advantage to a firm. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 20. According to the VRIO framework, the combination of only valuable and rare resources and capabilities have the potential to provide temporary competitive advantage for a firm. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 21. According to the VRIO framework, valuable, but common resources and capabilities, will lead to a temporary competitive advantage. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 22. Tangible resources differ from intangible resources in that tangible resources are easier to imitate. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM Copyright Cengage Learning. Powered by Cognero.

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23. Valuable and rare, but imitable, resources and capabilities give firms a permanently sustainable competitive advantage. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 24. According to the VRIO framework, valuable, rare, and hard-to-imitate resources and capabilities will lead to a competitive parity. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 25. The combination of resources and assets that enable a firm to gain a competitive advantage are referred to as supplementary assets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Creation of Value Bloom's: Remember 11/12/2021 2:58 PM 3/7/2022 9:29 PM

26. In global business, social complexity refers to the socially intricate and interdependent ways firms are typically organized. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 27. The VRIO framework differs from SWOT analysis in that the VRIO framework strongly discourages outsourcing. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 28. BPO refers to the outsourcing of low-end manufacturing to third-party providers. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 29. Original equipment manufacturers are firms that design, manufacture, and market branded products. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 30. Original design manufacturers are firms that both design and manufacture products. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 31. Original brand manufacturers cover more value chain activities than original equipment manufacturers. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 32. An original design manufacturer includes final assembly in its value chain activities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 33. An original equipment manufacturer does not include marketing in its value chain activities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM Copyright Cengage Learning. Powered by Cognero.

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34. An original brand manufacturer includes research and development in its value chain activities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 35. A competitive advantage that is sustained implies that it is permanent. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-06 - LO: 04-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 36. Which of the following business tools focuses on a firm’s external threats and opportunities? a. The VRIO framework b. The BCG matrix c. The SWOT analysis d. The Pareto analysis ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 2:58 PM 3/7/2022 9:29 PM

37. The resource-based view differs from the institution-based view in that the resource-based view focuses on a firm’s _____. a. external threats and opportunities b. internal strengths and weaknesses c. external strengths and opportunities d. internal threats and weaknesses ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 38. The institution-based view deals with what elements in the SWOT analysis? a. External strengths and weaknesses b. Internal weaknesses and opportunities c. External opportunities and threats d. Internal strengths and threats ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 39. Which of the following is considered a tangible resource of a firm? a. The research and developmental capabilities of a firm b. The organizational culture of a firm Copyright Cengage Learning. Powered by Cognero.

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c. The copyrights that belong to a firm d. The reputation of a firm as being socially responsible ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 40. Which of the following is considered as an intangible resource of a firm? a. The ability to raise external capital b. The access to raw materials of production c. The possession of patents to an invention d. The managerial skills of an employee ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 41. The ability to raise external capital is an example of a firm’s _____. a. human resources b. technological resources c. financial resources d. intangible resources ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 42. Which of the following is an example of a firm’s physical resources and capabilities? a. Integrated management information systems b. Access to raw materials and distribution channels c. Ability to generate internal funds d. Capacities for organizational innovation and change ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 43. Which of the following is an example of a firm’s technological resources and capabilities? a. Location of plants, offices, and equipment b. Managerial talents of employees c. Possession of patents, trademarks, copyrights, and trade secrets d. Reputation of employees as socially responsible citizens ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 44. Organizational culture is an example of what type of intangibles resources? a. Human Copyright Cengage Learning. Powered by Cognero.

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b. Physical c. Innovative d. Technological ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 45. Which of the following is an example of innovation resources and capabilities of a firm? a. Integrated management information systems b. Possession of patents, trademarks, copyrights, and trade secrets c. Formal planning, command, and control systems d. Research and development capabilities ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 46. The perceptions of product quality, durability, and reliability are an example of what type of resources and capabilities? a. Physical b. Reputational c. Technological d. Human ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 47. Which of the following primary activities of a firm corresponds to its support activity of infrastructure? a. Research and development b. Components c. Final assembly d. Marketing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 48. Which of the following primary activities of a firm corresponds to its support activity of human resources? a. Final assembly b. Marketing c. Components d. Research and development ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 49. Which of the following support activities corresponds to a firm’s primary activity of final assembly? Copyright Cengage Learning. Powered by Cognero.

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a. Technology development b. Human resources c. Infrastructure d. Logistics ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 50. What process is an examination as to whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors? a. Commoditization b. Performance appraisal c. Asset appraisal d. Benchmarking ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 51. The point at which an industry-specific activity becomes common across industries and the need to keep it proprietary no longer exists is called _____. a. commoditization b. monopolization c. break-even point d. captive sourcing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 52. Which of the following strategies would suit a firm activity that is both firm-specific and industry-specific? a. Keep the activity in-house b. Offshore the activity to a foreign supplier c. Outsource the activity to a domestic firm d. Set up a subsidiary in a foreign location to perform the activity ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 53. Turning over an organizational activity to an outside supplier that will perform it on behalf of the focal firm is called what? a. Deregulation b. Outsourcing c. Commoditizing d. Securitization ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/7/2022 9:29 PM

54. Which of the following activities is achieved within the domestic location of a firm? a. Offshoring b. FDI c. Captive sourcing d. Onshoring ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 55. Turning over an organizational activity to an international firm or foreign firm is called _____. a. captive sourcing b. onshoring c. offshoring d. commoditizing ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 56. Turning over an organizational activity to a domestic firm is called _____. a. captive sourcing b. onshoring c. offshoring d. nearshoring ANSWER: b POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 57. What strategy includes setting up subsidiaries abroad so that the work done is in-house but the location is foreign? a. Captive sourcing b. Onshoring c. Offshoring d. Insourcing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 58. Captive sourcing is also known as _____. a. business process outsourcing b. foreign direct investment c. securitization d. domestic in-house activity ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 2:58 PM 3/7/2022 9:29 PM

59. According to the VRIO framework, non-value-adding resources and capabilities will lead to what for a firm? a. A temporary competitive advantage b. A competitive parity c. A sustained competitive advantage d. A competitive disadvantage ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 60. According to the VRIO framework, a firm with an organized, valuable, rare, but imitable resources and capabilities will display what level of performance, at least for some period of time? a. Below average b. Average c. Above average d. Poor ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 61. Which of the following firms is most likely to have a sustained competitive advantage based on the VRIO framework? a. A firm with valuable but common resources and capabilities b. A firm with valuable and rare but imitable resources and capabilities c. A firm with valuable, rare, inimitable resources, and organizational capabilities d. A firm with non-value-adding resources and capabilities Copyright Cengage Learning. Powered by Cognero.

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ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From SWOT to VRIO QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 62. The difficulty of identifying the causal determinants of successful firm performance is called causal _____. a. determination b. indifference c. agency d. ambiguity ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 63. What term refers to a combination of resources and assets that enables a firm to gain a competitive advantage? a. Core assets b. Standard assets c. Supplementary assets d. Complementary assets ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From SWOT to VRIO QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Creation of Value Bloom's: Remember 11/12/2021 2:58 PM 3/7/2022 9:29 PM

64. An original equipment manufacturer refers to a firm that _____. a. executes design blueprints provided by other firms and manufactures such products b. both designs and manufactures products c. designs, manufactures, and markets branded products d. licenses its patented inventions to other firms for manufacturing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 65. A firm that develops new products or ideas in foreign countries and then implementing them domestically is making use of what process? a. Benchmarking b. Complementary innovation c. Reverse innovation d. Business process outsourcing ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 66. An ODM is similar to an OBM in that both _____. a. execute design blueprints provided by other firms b. include product marketing in their organizational boundary Copyright Cengage Learning. Powered by Cognero.

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c. exclude manufacturing in their organizational boundary d. design and manufacture their own products ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 67. Firms that design, manufacture, and market distinguished products are called _____. a. original design manufacturers b. original equipment manufacturers c. original brand manufacturers d. business process outsourcing firms ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 68. Which of the following value chain activities does an original equipment manufacturer perform? a. Research and development b. Product branding c. Final assembly d. Marketing ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 69. Including what activity in its organizational boundaries would convert an OEM into an ODM? a. Research and development b. Components c. Final assembly d. Marketing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 70. An original design manufacturer (ODM) differs from an original brand manufacturer (OBM) in that an ODM _____. a. does not include final assembly in its organizational boundary b. does not include research and development in its organizational boundary c. does not include marketing in its organizational boundary d. only executes design blueprints provided by other firms ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 71. What are tangible resources, and what are the three broad categories into which they fall. ANSWER: Tangible resources and capabilities are assets that are observable and easily quantifiable. Copyright Cengage Learning. Powered by Cognero.

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They can be broadly organized in three categories: financial, physical, and technological. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 72. Explain the three capabilities that are part of a dynamic, or action-oriented perspective. ANSWER: From a more dynamic (action-oriented) perspective, the three crucial capabilities are as follows: ● Sensing: Abilities to discover opportunities. ● Seizing: Abilities to capture value from opportunities. ● Reconfiguration: Abilities to remain flexible by redesigning business models, realigning assets, and revamping routines. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding Resources and Capabilities QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 73. How can a manager use a value chain to improve a company? ANSWER: A value chain is a stream of activities from upstream to downstream that add value. The value chain typically consists of two areas: primary and support activities. Each activity requires a number of resources and capabilities. Value chain analysis forces managers to think about firm resources and capabilities at a very micro, activity-based level. Given that no firm is likely to be good at all primary and support activities, the key is to examine whether the firm has resources and capabilities to perform a particular activity in a manner superior to competitors—a process known as benchmarking in SWOT analysis. If managers find that their firm’s particular activity is unsatisfactory, a decision model can remedy the situation. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Resources, Capabilities, and the Value Chain Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 74. Briefly explain outsourcing and its different types. ANSWER: Outsourcing is turning over an activity to an outside supplier that will perform it on behalf of the focal firm. Offshoring and onshoring are two types of outsourcing. Offshoring is international/foreign outsourcing. Onshoring is domestic outsourcing. A company can also set up subsidiaries to perform in-house work in foreign locations. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Resources, Capabilities, and the Value Chain QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 75. Describe the VRIO framework. ANSWER: The VRIO framework focuses on the value (V), rarity (R), imitability (I), and organizational (O) aspects of resources and capabilities. Only value-adding resources can lead to competitive advantage, whereas non-value-adding capabilities may lead to competitive disadvantage. Valuable but common resources and capabilities will lead to competitive parity but not an advantage. Valuable and rare resources and capabilities have the potential to provide some temporary competitive advantage. Valuable and rare resources and capabilities can be a source of competitive advantage only if competitors have a difficult time imitating them. Valuable and rare, but imitable, resources and capabilities may give firms some temporary competitive advantage, leading to above-average performance for some period of time. However, such advantage is not likely to be sustainable. Overall, only valuable, rare, and hard-to-imitate capabilities that are organizationally embedded and exploited can possibly lead to sustained competitive advantage and persistently above-average performance. POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: From SWOT to VRIO QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 76. Articulate the benefits of offshoring. ANSWER: Proponents argue that offshoring creates enormous value for firms and economies. Western firms are able to tap into low-cost yet high-quality labor, translating into significant cost savings. Firms can also focus on their core capabilities, which may add more value than noncore (and often uncompetitive) activities. While acknowledging that some US employees may regrettably lose their jobs, offshoring proponents suggest that, on balance, offshoring is a win-win solution for both US and foreign firms and economies. In other words, offshoring can be conceptualized as the latest incarnation of international trade (in tradable services), which theoretically will bring mutual gains to all involved countries. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM 77. Illustrate with examples the difference between OEMs, ODMs, and OBMs. ANSWER: In manufacturing, many Asian firms, which used to be original equipment manufacturers (OEMs) executing design blueprints provided by Western firms, now want to have a piece of the action in design by becoming original design manufacturers (ODMs). Having mastered low-cost and high-quality manufacturing, Asian firms such as BenQ, Compal, Flextronics, Hon Hai/Foxconn, and Huawei are indeed capable of capturing some design function from Western firms such as Dell, HP, Kodak, and Nokia. Therefore, increasing outsourcing of design work by Western firms may accelerate their own long-run demise. A number of Asian OEMs, now quickly becoming ODMs, have openly announced that their real ambition is to become original brand manufacturers (OBMs). POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Creation of Value Bloom's: Apply 11/12/2021 2:58 PM 3/7/2022 9:29 PM

78. Give an account of the political argument against outsourcing practiced by US firms. ANSWER: Many large US firms claim that they are global companies and, consequently, that they should neither represent nor be bound by American values anymore. According to this view, all that these firms are interested in is the cheapest and most exploitable labor. Not only is work commoditized, but people are degraded as tradable commodities that can be jettisoned. As a result, large firms that outsource work to emerging economies are often accused of being unethical, destroying jobs at home, ignoring corporate social responsibility, violating customer privacy, and in some cases undermining national security. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.04-05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/7/2022 9:29 PM

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Chapter 05 - International Trade 1. Trade deficit occurs when a nation exports more than it imports. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Nations Trade? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 2. Both exporting and importing are taken into account when calculating balance of trade. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Nations Trade? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 3. The theory of mercantilism viewed international trade as a zero-sum game. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 2:58 PM 3/8/2022 7:39 AM

4. By trying to be self-sufficient and producing a wide range of goods, mercantilist policies help sustain the wealth of a nation in the long run. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 5. The theory of absolute advantage is categorized as a classical theory of international trade. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 6. The basic concept of protectionism and mercantilism is the same. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 7. Economist Adam Smith proposed the theory of comparative advantage. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 8. The Heckscher-Ohlin theory proposed that nations will develop comparative advantage based on their locally abundant factors. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 9. The concept of opportunity cost is crucial to the theory of comparative advantage. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 10. The product life cycle theory is the first dynamic theory to account for changes in the patterns of trade over time. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 11. Government intervention in international trade was proposed by the factor endowment theory. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 12. The strategic trade theory was mainly proposed for low capital-investment industries. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 13. Strategic trade theory advocates mercantilist policy for all industries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 14. The product life cycle theory is popularly known as the “diamond” theory. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 2:58 PM 3/8/2022 7:39 AM

15. The theory of national competitive advantage of industries does not take domestic demand conditions into account. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 16. Factor endowments is one of the four interacting aspects of the theory of national competitive advantage of industries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 17. Classical theories are based on the assumption of perfect resource mobility. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 18. Classical theories assume no foreign exchange complications. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 19. The theory of national competitive advantage of industries assumes that comparative advantage always resides in the lead innovation nation. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 20. The product life cycle theory explains patterns of trade based on factor endowments. a. True b. False ANSWER: False POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 21. The absolute advantage theory is considered as the forerunner of the free trade movement. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 22. In the context of tariff barriers, net losses that occur in an economy as a result of tariffs are known as deadweight costs. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 23. Deadweight costs occur in an economy as a result of voluntary export restraints (VERs). Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 24. In the context of tariff barriers, deadweight = total inefficiency – net gain. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 25. Subsidies are nontariff barriers. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 2:58 PM 3/8/2022 7:39 AM

26. In the context of nontariff barriers (NTBs), voluntary export restraints (VERs) are government payments to domestic firms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 27. Local content requirements require that a certain proportion of the value of the goods made in one country must originate from that country. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 28. In the context of nontariff barriers (NTBs), administrative policies require a certain proportion of the value of the goods made in one country to originate from that country. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 29. Antidumping duties are a type of tariff barrier. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 30. The infant industry argument demands lesser government intervention in international trade. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 31. One of the arguments against free trade is the necessity to safeguard domestic industries. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 32. Antidumping duties are levied on a country’s exports. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 33. Political arguments against free trade focus on protectionism and infant industries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 34. Trade embargoes are a means of trade intervention. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 35. Environmental and social responsibility can be used as political arguments to initiate trade intervention against certain countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 36. An economic condition in which a nation imports more than it exports is known as a trade _____. a. deficit b. surplus c. embargo d. war ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Nations Trade? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:58 PM 3/8/2022 7:39 AM

37. Protectionism is similar to mercantilism as they both advocated _____. a. dividing the nations of the world into three categories based on its innovation capabilities b. developing comparative advantages based on a nation’s locally abundant factors c. specializing in economic activities in which a nation can have an absolute advantage d. government involvement in international trade ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 38. By trying to be self-sufficient and producing a wide range of goods, what type of policies reduce the wealth of a nation in the long run? a. Absolute advantage b. Laissez faire c. Free trade d. Mercantilist ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 39. Which theory viewed international trade as a zero-sum game? a. Comparative advantage b. Mercantilism Copyright Cengage Learning. Powered by Cognero.

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c. Strategic trade d. National competitive advantage of industries ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 40. What principle advocated that governments should actively shield domestic industries from imports and vigorously promote exports? a. Comparative advantage b. Absolute advantage c. Protectionism d. Factor endowment ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 41. Which of the following ideas is closely linked to the theory of absolute advantage? a. All international trade must be closely regulated by governments. b. Free market forces should determine how much to trade with minimal government intervention. c. Governments should actively protect domestic industries from imports and vigorously promote exports. d. Nations should specialize in economic activities in which they have comparative advantage. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 42. Which of the following is a classical theory of international trade? a. Comparative advantage theory b. Product life cycle theory c. Strategic trade theory d. National competitive advantage of industries theory ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 43. Which of the following is a modern trade theory? a. Comparative advantage b. National competitive advantage c. Mercantilism d. Absolute advantage ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 44. Which of the following is true of the absolute advantage theory of international trade? a. It emphasizes relative advantage in one economic activity that one nation enjoys in comparison with other Copyright Cengage Learning. Powered by Cognero.

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nations. b. It divides the countries of the world into three categories based on innovation. c. It advocates extensive government intervention in international trade. d. It was the first theory that advocated free trade. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 45. What theory is based on the assumption that the wealth of the world is fixed? a. Product life cycle b. Mercantilism c. Strategic trade d. National competitive advantage of industries ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 46. Which of the following trade theories divides the nations of the world into three categories? a. National competitive advantage of industries b. Strategic trade c. Factor endowment d. Product life cycle ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 47. In which of the following ways is the theory of comparative advantage linked to the Heckscher-Ohlin theory? a. Sustainability of wealth in the short run b. Dynamic changes in the patterns of trade over time c. Dependency on a nation’s locally available abundant factors d. Extent to which government influences international trade ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 48. Factor endowment is _____. a. the amount of change that patterns of trade undergo over time b. the degree to which the government allows free trade to exist in its international trade c. the extent to which different countries possess various factors of production d. the cost of pursuing one activity at the expense of another given alternative activity ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM Copyright Cengage Learning. Powered by Cognero.

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49. Which of the following was the first international trade theory to account for changes in the patterns of trade over time? a. Comparative advantage theory b. Absolute advantage theory c. Product life cycle theory d. Factor endowment theory ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 50. Which theory suggests that nations will develop comparative advantages based on their locally abundant factors? a. Heckscher-Ohlin theory b. Absolute advantage theory c. Product life cycle theory d. Strategic trade theory ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 51. Which of the following describes the maturing stage in the product life cycle theory? a. The demand and ability to produce the product grow in developed nations. b. The product is commoditized. c. The production of the product moves to low-cost developing nations. d. The production of a product commanding a price premium will be concentrated in the lead innovation nation. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 52. In the third stage of the product life cycle theory, the _____. a. demand and ability to produce the product grow in developed nations b. product is standardized c. lead innovation nation starts exporting more and importing less d. production of a product commanding a price premium will be concentrated in the lead innovation nation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 53. What theory advocates government intervention in highly capital-intensive, high entry-barrier industries in which domestic firms may have little chance without government assistance? a. Product life cycle b. Laissez faire c. Strategic trade d. Absolute advantage ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/8/2022 7:39 AM

54. Which of the following assumptions is present in the classical theories of international trade? a. Different produces have different product life cycles b. Transportation costs should underpin foreign trade c. Resource mobility is not easy to achieve d. No complications in foreign exchange transactions ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 55. Which of the following describes resource mobility as assumed by the classical theories of international trade? a. It is the assumption that a resource used in producing a product for one industry can be shifted and put to use in another industry. b. It is the notion that countries should share their resources freely with other countries. c. It is the expectation that all resource-based transactions will have no foreign exchange complications. d. It is the assertion that all resources of a nation should be directly controlled by the government. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 56. Which theory is based on the notion that competitive advantage is dependent on the four interacting aspects of factor endowments, domestic demand, firm strategy, and related and supporting industries? a. Strategic trade theory b. Product life cycle theory c. Comparative advantage theory d. National competitive advantage of industries theory Copyright Cengage Learning. Powered by Cognero.

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ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 57. Which of the following is true of the strategic trade theory? a. It provides direct policy advice. b. It advocates complete deregulation of international trade. c. It explains patterns of trade based on factor endowments. d. It is the first theory to account for dynamic changes in trade patterns. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 58. The theory of comparative advantage _____. a. reduces the wealth of the nation in the short run b. provides direct policy advice c. explains patterns of trade based on factor endowments d. was the first theory to incorporate dynamic changes in patterns of trade ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Understand 11/12/2021 2:58 PM 3/8/2022 7:39 AM

59. Deadweight costs are net losses that occur when what are imposed? a. Import tariffs b. Import quotas c. Voluntary export restraints d. Local content requirements ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 60. In the context of tariff barriers, deadweight costs = _____. a. total inefficiency – net gain b. net loss – net gain c. total inefficiency – net loss d. total inefficiency – net gain – net loss ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 61. Import quotas are a type of _____. a. tariff barrier b. nontariff barrier c. voluntary export restraint Copyright Cengage Learning. Powered by Cognero.

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d. antidumping duty ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 62. Government payments to domestic firms are called what? a. Tariffs b. Subsidies c. Quotas d. Trade embargoes ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 63. Which of the following are restrictions on the quantity of goods coming into a country? a. Voluntary export restraints (VERs) b. Import quotas c. Subsidies d. Antidumping duties ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:58 PM 3/8/2022 7:39 AM

64. Which of the following is the most direct denial of absolute or comparative advantage? a. Quota b. Tariff c. Local content requirement d. Subsidy ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 65. Which of the following is true of voluntary export restraints? a. It is an extra tax imposed by a country on its exports. b. It is an example of a tariff barrier. c. It is a government payment to domestic firms. d. It is an export quota levied by a country on the quantity of its exports. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 66. What rules stipulate that a certain proportion of the value of the goods made in one country must originate from that country? a. Voluntary export restraints Copyright Cengage Learning. Powered by Cognero.

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b. Local content requirements c. Import quotas d. Trade embargoes ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 67. In the context of nontariff barriers (NTBs), which of the following are bureaucratic rules that make it harder to import foreign goods? a. Voluntary export restraints (VERs) b. Administrative policies c. Local content requirements d. Deregulation policies ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 68. What are tariffs levied on imports sold below costs to drive domestic firms out of business? a. Antidumping duties b. Import quotas c. Local content requirements d. Voluntary export requirements ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 69. Which of the following can be considered as an economic argument against free trade? a. National security b. Foreign policy c. Consumer protection d. Infant industry ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 70. Which of the following are politically motivated trade sanctions against foreign countries to signal displeasure? a. Trade embargoes b. Voluntary export restraints (VERs) c. Subsidies d. Antidumping duties ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 71. Briefly explain the strengths and weaknesses of the absolute advantage and comparative advantage trade theories. Copyright Cengage Learning. Powered by Cognero.

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ANSWER:

The economic advantage one nation enjoys that is absolutely superior to other nations summarizes the theory of absolute advantage. By specializing and trading, each nation produces more and consumes more. Therefore, the wealth of all trading nations, and the world overall, increases. This theory serves as the forerunner of the free trade movement, and defeats mercantilism, at least intellectually. However, when one nation is inferior to another, the theory is unable to provide any advice; and when there are many nations, it may be difficult to find an absolute advantage. The theory of comparative advantage advocates the relative advantage in one economic activity that one nation can enjoys in comparison with other nations. The theory offers more realistic guidance to nations interested in trade but having no absolute advantage and explains patterns of trade based on factor endowments. However, this theory assumes that comparative advantage and factor endowments do not change over time. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 72. Briefly explain the classical theory of mercantilism. ANSWER: Mercantilism is a theory that suggests that the wealth of the world is fixed and that a nation that exports more and imports less will be richer. According to the theory, international trade is a zero-sum game. It is the direct intellectual ancestor of modern-day protectionism, which is the idea that governments should actively protect domestic industries from imports and vigorously promote exports. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Theories of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 73. Discuss the characteristics of the modern trade theories. ANSWER: The product life cycle theory accounts for changes in the patterns of trade over time by focusing on product life cycles. It explains that comparative advantage first resides in the lead innovation nation, which exports to other nations. Production migrates to other advanced Copyright Cengage Learning. Powered by Cognero.

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nations and then developing nations in different product life cycle stages. This theory is the first theory to incorporate dynamic changes in patterns of trade. The strategic trade theory suggests that strategic intervention by governments in certain industries can enhance their odds for international success. This theory provides policy advice and positively incorporates the role of governments in trade. The theory of national competitive advantage of industries suggests that the competitive advantage of certain industries in different nations depends on four aspects that form a "diamond." The four aspects are: 1) factor endowments, 2) domestic demand, 3) firm strategy, structure, and rivalry, and 4) related and supporting industries. This theory is the most recent, most complex, and most realistic among various theories. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 74. Elaborate on Michael Porter’s “diamond” theory. ANSWER: The “diamond” theory focuses on why certain industries within a nation are competitive internationally. The four aspects to this theory are (1) country factor endowments, (2) domestic demand, (3) firm strategy, structure, and rivalry, and (4) related and supporting industries. Factor endowments refer to the natural and human resource repertoires. Tough domestic demand propels firms to scale new heights. Domestic firm strategy, structure, and rivalry in one industry play a huge role in its international success or failure. Related and supporting industries provide the foundation upon which key industries can excel. This theory is the most recent, complex, and most realistic among various theories. As a multilevel theory, it directly connects research on firms, industries, and nations. However, this theory has not been comprehensively tested. Some critics argue that the “diamond” theory places too much emphasis on domestic conditions. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Theories of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM Copyright Cengage Learning. Powered by Cognero.

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75. Briefly elaborate on any three nontariff barriers (NTBs). ANSWER: Non-tariff barriers include subsidies, import quotas, export restraints, local content requirements, administrative policies, and antidumping duties. Subsidies are government payments to domestic firms. Import quotas are restrictions on the quantity of imports and are the most straightforward denial of absolute or comparative advantage. Voluntary export restraints are international agreements indicating that exporting countries voluntarily agree to restrict their exports. Local content requirements require a certain proportion of the value of the goods made in one country to originate from that country. Administrative policies refer to bureaucratic rules that make it harder to import foreign goods. Antidumping duties are tariffs levied on imports that have been "dumped" (selling below costs to "unfairly" drive domestic firms out of business). Trade barriers reduce or eliminate international trade. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 76. Discuss the economic arguments against free trade. ANSWER: The oldest and most frequently used economic argument against free trade is the urge to protect domestic industries, firms, and jobs from allegedly "unfair" foreign competition. Another argument is the infant industry argument, according to which, if domestic firms are as young as “infants,” in the absence of government intervention, they stand no chances of surviving and will be crushed by mature foreign rivals. While this argument is sometimes legitimate, governments and firms have a tendency to abuse it. Some protected infant industries may never grow up. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 77. Discuss the political arguments against free trade. Copyright Cengage Learning. Powered by Cognero.

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ANSWER:

Political arguments against free trade include geopolitical competition, national security, consumer protection, foreign policy, and environmental and social responsibility. Heightened geopolitical tensions between countries can motivate one country to ban certain imports from another, such as the US government banning 5G telecom equipment imports from China's Huawei. National security is often invoked to protect defense-related industries. Many nations fear that if they rely on arms imports, their national security may be compromised if there are political or diplomatic disagreements between them and the arms-producing nation. Consumer protection has frequently been used as an argument for nations to erect trade barriers. Foreign policy objectives are often sought through trade intervention. Trade embargoes are politically motivated trade sanctions against foreign countries to signal displeasure. Environmental and social responsibility can be used as political arguments to initiate trade intervention against certain countries. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM 78. What are the few factors that determine the success and failure of firms’ exports around the globe? ANSWER: The two core perspectives lead to two answers. Fundamentally, the various economic theories underpin the resource-based view, suggesting that successful exports are valuable, unique, and hard-to-imitate products generated by certain firms from a nation. However, the political realities stress the explanatory and predictive power of the institution-based view: As rules of the game, institutions—such as laws and regulations promoted by various special interest groups—can protect certain domestic industries, firms, and individuals; erect trade barriers; and make the nation as a whole worse off. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.05-05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:58 PM DATE MODIFIED: 3/8/2022 7:39 AM

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Chapter 06 - Foreign Direct Investment 1. FPI refers to investment in a portfolio of foreign securities that do not entail the active management of foreign assets. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 2. An FPI does not provide management control rights to the investing firm. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 3. A type of FDI in which the firm moves upstream or downstream in different value chain stages in a host country is called horizontal FDI. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 7:00 PM

4. A firm manufacturing clocks in its home country and through FDI is an example of downstream vertical FDI. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 5. Horizontal FDI refers to the amount of FDI moving out of a country in a year. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 6. FDI stock refers to the accumulation of inbound FDI in a country or outbound FDI from a country. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 7. In order to become an MNE, an exporter has to undertake FDI. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 8. OLI advantages refers to a firm‘s quest for outsourcing (O) advantages, licensing (L) advantages, and importing (I) advantages. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 9. In the context of FDI, ownership refers to MNEs’ possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets overseas. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 10. Internalization refers to the replacement of cross-border markets with one firm locating in two or more countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 11. The resource-based view argues that internalization is a response to the imperfect rules governing international transactions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM Copyright Cengage Learning. Powered by Cognero.

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12. Firms become MNEs because FDI provides OLI advantages that they otherwise would not obtain. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 13. Dissemination risk refers to the cost that a firm has to endure even when its investment turns out to be unsatisfactory. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ownership Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 14. The benefit of ownership lies in the combination of equity ownership rights and management control rights. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ownership Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 7:00 PM

15. Compared to licensing, FDI increases dissemination risks. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ownership Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 16. Compared to licensing, FDI provides more direct and tighter control over foreign operations. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ownership Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 17. Explicit knowledge is noncodifiable and its transfer requires hands-on practice. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ownership Advantages QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 18. Economic agglomeration is an example of a location advantage. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Location Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 19. Expropriation refers to the knowledge diffused from one firm to others among closely located firms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 20. Oligopoly happens when an industry is dominated by one company. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Location Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 21. Domestic transaction costs tend to be higher than international transaction costs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internalization Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 22. Internalization can help reduce opportunistic behavior in international trade. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internalization Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 23. Intrafirm trade refers to international transactions between two subsidiaries in a country controlled by two different MNEs. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internalization Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 24. Intrafirm trade enables MNEs to better coordinate cross-border activities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internalization Advantages QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 25. The radical view treats FDIs as an instrument of imperialism. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM Copyright Cengage Learning. Powered by Cognero.

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26. The free market type of FDI is the most prevalent type of FDI practiced. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 27. Capital inflow can help improve a host country’s balance of payments. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 28. Technology spillovers are harmful to host firms and industries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 7:00 PM

29. The demonstration effect refers to the ability of a firm to engage in an upstream stage of the value chain in a host country. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 30. Repatriated earnings from profits of MNEs benefit the host country financially. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 31. Investing in FDI will increase the home firm’s exports of components and services. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 32. An FDI investment is not considered a zero-sum game. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 33. Expropriation refers to the rewarding of property rights and incentives to MNEs from the host country. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 34. MNEs encounter sunk costs when they face an obsolescing bargain with the host country. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 35. FDI is more suitable if the activity is marginal and common across multiple end-user industries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-04 - LO: 06-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 36. FPI refers to the _____. a. direct, hands-on management of foreign assets b. amount of FDI moving in a given period in a certain direction c. ability of a firm to engage in downstream stage of the value chain in a host country d. investment in a portfolio of foreign securities that do not entail the active management of foreign assets ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM Copyright Cengage Learning. Powered by Cognero.

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37. In what type of FDI does a firm duplicate its home country-based activities at the same value chain stage in a host country? a. Horizontal FDI b. Vertical FPI c. Backward vertical FDI d. Platform FDI ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 38. Harton, a car manufacturer based in UK, only assembles cars and does not manufacture components in the UK. But in France, Harton enters into components manufacturing through FDI. Harton’s investment in France would be an example of a(n) _____. a. FPI b. downstream vertical FDI c. upstream vertical FDI d. horizontal FDI ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 39. A vertical FDI refers to a type of FDI in which _____. a. a firm duplicates its home country-based activities at the same value chain stage in a host country b. a firm invests in a portfolio of foreign securities but without active management of those foreign assets c. a firm moves upstream or downstream at different value chain stages in a host country Copyright Cengage Learning. Powered by Cognero.

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d. a firm produces the same products or services in a host nation as it does at home ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 40. If Apple invests in iPhone dealerships in Asia but does not engage in distribution in the United States (Apple’s host country), then Apple’s Asian investment would be considered a(n) _____. a. downstream vertical FDI b. upstream vertical FDI c. horizontal FDI d. FPI ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 41. What is the amount of FDI moving in a given period (usually a year) in a certain direction known as? a. FDI stock b. FDI flow c. Horizontal FDI d. Vertical FDI ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 7:00 PM

42. Which of the following terms refers to the total accumulation of inbound FDI in a country or outbound FDI from a country? a. FDI flow b. FDI stock c. Horizontal FDI d. Vertical FDI ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 43. If a firm engages in final assembly in its home operations, then which of the following operations of the firm in a foreign country would be considered a downstream vertical FDI? a. Research and development b. Components procurement c. Marketing d. Final assembly ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 44. OLI advantages refer to a firm’s quest for which of the following advantages via FDI? Copyright Cengage Learning. Powered by Cognero.

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a. oligopolistic, laissez-faire, and intrafirm trade b. outsourcing, licensing, and importing c. organization, leadership, and innovation d. ownership, location, and internalization ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 45. MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets overseas in the context of FDI refer to _____. a. location b. ownership c. internalization d. market imperfections ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 46. Which of the following refers to the replacement of cross-border markets with one firm locating in two or more countries? a. Location advantage b. Ownership advantage c. Internalization d. Agglomeration ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 47. A firm that establishes a manufacturing plant in a foreign country due to the cheap labor costs in that country is enjoying which of the following types of advantages? a. Location b. Ownership c. Internalization d. Externalization ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Why Do Firms Become MNEs by Engaging in FDI? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 48. Problems associated with unauthorized diffusion of firm-specific know-how are known as _____. a. Knowledge spill b. Dissemination risk c. Market imperfection d. Technological spill ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ownership Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

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49. Firms prefer FDI to licensing because FDI_____. a. increases the chances of opportunism when dealing with a host nation entity b. requires complete dissemination of technological know-how to host nation entity c. protects the firm from economic agglomeration d. provides the firm with direct ownership to its foreign assets ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ownership Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 50. What type of knowledge can be written down and transferred without losing much of its richness? a. Explicit b. Implicit c. Tacit d. Inherent ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ownership Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 51. Which of the following types of knowledge is noncodifiable and its acquisition and transfer requires hands-on practice? a. Explicit b. Tacit c. Lucid d. A priori ANSWER: b Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ownership Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 52. Which of the following terms refers to the clustering of economic activities in certain locations? a. Internalization b. Expropriation c. Agglomeration d. Intrafirm trade ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Location Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 53. Knowledge spillover refers to _____. a. the risk associated with unauthorized diffusion of firm-specific know-how b. a violation of the knowledge and IP rights secured by a copyright c. knowledge diffused from one firm to others among closely located firms d. the imperfect rules governing international transactions ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Location Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 7:00 PM

54. An industry dominated by a small number of players is known as a(n) _____. a. oligopoly b. monopoly c. perfect competition d. free market ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Location Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 55. The television industry in the United States is controlled by a limited number of giant corporations, making the industry a(n) ______. a. agglomeration b. free market c. monopolistic d. oligopolistic ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Location Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 56. International transactions between two subsidiaries in two countries controlled by the same MNE are known as _____. a. intrafirm trades b. oligopolies c. agglomerations Copyright Cengage Learning. Powered by Cognero.

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d. monopolizations ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internalization Advantages QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 57. Which of the following political views treats FDI as an instrument of imperialism and as a vehicle for exploitation of domestic resources by foreign capitalists and firms? a. Pragmatic nationalism b. The free-market view c. The radical view d. The monopolistic view ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 58. Which view suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by specializing in the production of certain goods or services? a. The radical view b. The free market view c. Pragmatic nationalism d. The monopolistic view ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 59. Which of the following political perspectives maintains the view that FDI has both pros and cons and can only be approved when its benefits outweigh costs? a. Pragmatic nationalism b. Protectionism c. The radical view of FDI d. The free market view of FDI ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 60. Which of the following political perspectives on FDI has its principles rooted in Marxism? a. Pragmatic nationalism b. Laissez-faire c. The free market view d. The radical view ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of FDI QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 61. The reaction of local firms to rise to the challenge demonstrated by MNEs through learning and imitation is known as Copyright Cengage Learning. Powered by Cognero.

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what? a. Bandwagon effect b. Domino effect c. Dissemination risk d. Contagion effect ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Realities of FDI QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 62. Which of the following is a primary cost of FDI to host countries? a. Capital inflow b. Increase in competition between local firms c. Capital and job loss d. Loss of sovereignty ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of FDI QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 63. Which of the following is a benefit of FDI to home countries? a. Decrease in competition between local firms b. Capital outflow c. Learning from operations d. Creation of new jobs ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of FDI Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 64. Which of the following is a primary cost of FDI to home countries? a. Loss of sovereignty b. Increase in local competition c. Capital outflow and job loss d. Increased exports of components and services to host countries ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of FDI QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 65. What term refers to the ability to extract favorable outcome from negotiations due to one party’s strength? a. Expropriation b. Bargaining power c. Compromising power d. Accommodating power ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM Copyright Cengage Learning. Powered by Cognero.

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66. What term refers to the deal struck by MNEs and host governments, which change their requirements after the initial FDI entry? a. Obsolescing bargain b. Integrative bargain c. Automated bargain d. Ongoing bargain ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 67. In Round Two of FDI negotiation process between MNEs and host governments, _____. a. the government may demand renegotiations of the deal b. the MNE is not willing to enter in the absence of some government assurance c. the previous deal becomes obsolete d. the MNE enters the host market and earns profits ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 68. Government’s confiscation of foreign assets is known as _____. a. obsolescing bargains b. sunk costs c. expropriation d. conflicting interests ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 69. Costs that a firm has to endure even when its investment turns out to be unsatisfactory are referred to as _____. a. switching costs b. replacement costs c. cost overruns d. sunk costs ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 70. Which of the following statements best describes an FDI? a. Setting up subsidiaries in foreign locations to do in-house work b. Turning over an organizational activity to an outside supplier to perform on behalf of the firm c. Outsourcing an in-house activity to another domestic firm d. Assigning firm activities to foreign firms in neighboring countries ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.06-04 - LO: 06-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:59 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

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71. Differentiate between the primary characteristics of horizontal and vertical FDI. ANSWER: When a firm duplicates its home country-based activities at the same value chain stage in a host country through FDI, we call this horizontal FDI. If a firm through FDI moves upstream or downstream in different value-chain stages in a host country, we label this vertical FDI. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Understanding the FDI Vocabulary QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-01 - LO: 06-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 72. Why do firms prefer FDI to licensing? ANSWER: (1) FDI reduces dissemination risks. (2) FDI provides tight control over foreign operations. (3) FDI facilitates the transfer of tacit knowledge through “learning by doing.” POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ownership Advantages QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 73. Explain the location advantages of FDI. Discuss the value of acquiring and neutralizing location advantages with an example that highlights how a location advantage does not necessarily overlap a country-level advantage. ANSWER: Certain locations possess geographical features that are difficult to match by others. Beyond natural geographical advantages, location advantages also arise from the clustering of economic activities in certain locations—referred to as agglomeration. Note that from a resource-based view, location advantages do not entirely overlap with country-level advantages such as factor endowments. Location advantages refer to the advantages one firm obtains when operating in one location due to its firm-specific capabilities. Like all regions attracting FDI, Texas has to compete with other countries and other states Copyright Cengage Learning. Powered by Cognero.

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within the United States. How Texas attracted Toyota to move its North America headquarters with 4,000 jobs and a capital investment of $300 million from Torrance, California, to Plano, a Dallas suburb in north Texas, is a case in point. For half a century, Japanese firms such as Toyota clustered in southern California, because it offered the best location to launch and operate US operations and to manage their logistics flows to and from Japan. This logic of being headquartered in California is now breaking down, under the pushand-pull effects of the outsized penalties of doing business there (high tax, big government, and big spending) and the tremendous pull offered by Texas (low tax, small government, and small spending). In addition to the geographical and institutional benefits outlined above, Texas offered direct cash incentives to Toyota: $40 million. In 2017, Toyota North America headquarters joined a Toyota factory in Texas, which had started in San Antonio in 2003 and currently employed 2,500 workers. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Location Advantages QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-02 - LO: 06-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 74. Differentiate between the radical, the free market and pragmatic nationalism view on FDI. ANSWER: There are three primary political views on FDI. First, the radical view is hostile to FDI. Tracing its roots to Marxism, the radical view treats FDI as an instrument of imperialism and as a vehicle for exploitation of domestic resources by foreign capitalists and firms. Governments embracing the radical view often nationalize MNE assets, or simply ban (or discourage) inbound MNEs. On the other hand, the free market view suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by specializing in the production of certain goods and services. Similar to the win-win logic for international trade as articulated by Adam Smith and David Ricardo, free market-based FDI will lead to a win-win situation for both home and host countries. However, in practice, a totally free market view on FDI does not really exist. Most countries practice pragmatic nationalism—viewing FDI as having both pros and cons and only approving FDI when its benefits outweigh costs. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of FDI QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

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75. Identify the benefits and costs of FDI to host countries. ANSWER: The benefits of FDI to host countries: 1) Capital inflow can help improve a host country’s balance of payments. Technology, especially more advanced technology from abroad, can create technology 2) spillovers that benefit domestic firms and industries. Advanced management know-how may be highly valued. It is often difficult for 3) indigenous development of management know-how to reach a world-class level in the absence of FDI. 4) FDI creates jobs, both directly and indirectly. The three primary costs of FDI to host countries: (1) loss of sovereignty, (2) adverse effects on competition, and (3) capital outflow. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of FDI QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 76. Identify the benefits and costs of FDI to home countries. ANSWER: There are three benefits to home countries: 1) Repatriated earnings of profits from FDI 2) Increased exports of components and services to host countries 3) Learning via FDI from operations abroad Costs of FDI to home countries primarily center on capital outflow and job loss. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Realities of FDI QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 77. Describe the process of obsolescing bargain between MNEs and governments. Copyright Cengage Learning. Powered by Cognero.

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ANSWER:

Typically, FDI bargaining is not one-round only. After the initial FDI entry, both sides may continue to exercise bargaining power. One well-known phenomenon is the obsolescing bargain, referring to the deal struck by MNEs and host governments, which change their requirements after the initial FDI entry. It typically unfolds in three rounds: • In Round One, the MNE and the government negotiate a deal. The MNE usually is not willing to enter in the absence of some government assurance of property rights and incentives (such as tax holidays). • In Round Two, the MNE enters and, if all goes well, earns profits that may become visible. • In Round Three, the government, often pressured by domestic political groups, may demand renegotiations of the deal that seems to yield “excessive” profits to the foreign firm (which, of course, regards these as “fair” and “normal” profits). The previous deal, thus, becomes obsolete. The government’s tactics include removing incentives, demanding a higher share of profits and taxes, and even expropriation (confiscating foreign assets). POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How MNES and Host Governments Bargain QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-03 - LO: 06-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 7:00 PM 78. What determines the success and failure of FDI around the globe? What are the implications for actions? ANSWER: First, from a resource-based view, some firms are very good at FDI because they leverage ownership, location, and internalization advantages in a way that is valuable, unique, and hard to imitate by rival firms. Second, from an institution-based view, the political realities either enable or constrain FDI from reaching its full economic potential. The successes and failures of FDI significantly depend on institutions governing FDI as "rules of the game." This leads to three implications for action: Carefully assess whether FDI is justified in light of other options such as outsourcing 1) and licensing. Pay careful attention to the location advantages in combination with the firm's strategic 2) goals. Be aware of the institutional constraints governing FDI and enhance legitimacy in host 3) countries. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.06-05 - LO: 06-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

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Chapter 07 - Foreign Exchange 1. A foreign exchange rate refers to the price of buying and selling commodities for future delivery. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 2. An appreciation is an increase in the value of the currency whereas a depreciation is a loss in the value of the currency. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 3. Basic economic theory suggests that the price of a commodity is most fundamentally determined by its supply and demand. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 10:08 PM

4. The foreign exchange markets are influenced only by economic factors and free from the effect of psychological or political pressures. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 5. The theory of purchasing power parity suggests that in the absence of trade barriers, the price for identical products sold in different countries will be different. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 6. If one country’s interest rate is high relative to other countries, the country will attract foreign funds. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 7. The rise of a country's productivity is usually accompanied by increased demand for its home currency. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 8. A country highly productive in manufacturing typically generates a merchandise trade deficit. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 9. A country’s current account deficit can only be financed using its savings. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 10. Governments adopting the floating exchange rate policy tend to set the exchange rate of a currency relative to other currencies. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 11. Many countries with high inflation have pegged their currencies to the yuan in order to restrain domestic inflation. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM Copyright Cengage Learning. Powered by Cognero.

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12. Balance of payments and exchange rate policies usually determine long-run movements of a currency. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 13. The effect of investors moving in the same direction at the same time leads to a bandwagon effect. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 14. Under the gold standard, to be able to redeem its currency in gold at a fixed price, every central bank needed to maintain gold reserves. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution of the International Monetary System QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 10:08 PM

15. The Bretton Woods system was centered on the British pound as the new common denominator. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution of the International Monetary System QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 16. The Bretton Woods system used the gold standard as the common denominator for all currencies. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution of the International Monetary System QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 17. The Bretton Woods system had been built on the condition that the US inflation rate had to be continuously high. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution of the International Monetary System QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 18. The International Monetary Fund offers free grants to countries depending on the stability and need of the borrower. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution of the International Monetary System QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 19. The foreign exchange market has no central physical location and is the largest and most active market in the world. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 20. Forward transactions allow participants to buy and sell currencies now for future delivery. a. True b. False ANSWER: True POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 21. Currency hedging is a popular way to minimize the foreign exchange risk inherent in all non-spot transactions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managing Currency Risk QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 22. Forward discount is a condition under which the forward rate of one currency relative to another currency is lower than the spot rate. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managing Currency Risk QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 23. The primary participants of the foreign exchange market are IMF and World Bank. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 24. Strategic hedging means spreading out activities in a number of countries in different currency zones to offset the currency losses in certain regions through gains in other regions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 25. Strategic hedging focuses on using forward contracts and swaps to contain currency risks. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managing Currency Risk QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 2:59 PM 3/9/2022 10:08 PM

26. Proponents of fixed exchange rates argue that fixed exchange rates impose monetary discipline by preventing governments from engaging in inflationary monetary policies. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 27. Proponents of fixed exchange rates believe that market forces should take care of supply, demand, and price of any currency. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 28. A floating exchange rate allows each country to make its own monetary policy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 29. Floating exchange rates are less volatile than fixed rates. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 30. The most extreme fixed rate policy is through a currency board. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 31. In terms of international trade competitiveness, a strong dollar makes it easier for US firms to export and to compete on price when combating imports. a. True b. False ANSWER: False Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 32. A weak dollar makes it more expensive for US tourists when traveling abroad. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 33. A majority of the largest US firms practice currency hedging. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 34. Hedging protects firms from spot market unpredictability. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 35. Risk analysis of any country must include its currency risks. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-05 - LO: 07-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 36. Which of the following terms is defined as the price of one currency, such as the dollar, in terms of another, such as the euro? a. Stock exchange index b. Securities market rate c. Commodities exchange rate d. Foreign exchange rate ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 2:59 PM 3/9/2022 10:08 PM

37. What approach suggests the price for identical products in different countries would be the same, if trade barriers are absent? a. Theory of purchasing power parity b. Fixed exchange rate policy c. Penn effect d. Bretton Woods system ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 38. Which of the following applications is directly derived from the theory of purchasing power parity (PPP)? a. The floating exchange rate b. The fixed exchange rate c. The stock market index d. The Big Mac index ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 39. Which of the following conditions will attract foreign funds into a country? a. If the country has high trade deficits b. If the country’s interest rate is relatively high compared to other countries Copyright Cengage Learning. Powered by Cognero.

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c. If the country’s currency is depreciated d. If the country is experiencing high levels of inflation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 40. Which of the following will cause a country’s currency to depreciate? a. High interest rates on the currency b. High inflation rates c. High account surplus d. High in-flow of foreign funds ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 41. Which of the following is true of quantitative easing? a. It depreciates the currency that is being printed. b. It appreciates the currency that is being printed. c. It increases the inflation rate in the country. d. It increases the exchange value of the currency. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 42. A country’s international transaction statement, which includes merchandise trade, service trade, and capital movement is its _____. a. capital flight b. currency hedging c. purchasing power parity d. balance of payments ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 43. Which of the following characterizes a country's current account? a. A country’s current account deficit has to be financed by both purchases and sales of assets. b. A country experiencing a current account deficit will see its currency appreciate. c. A country’s current account balance consists of exports plus imports of merchandise and services minus income on the country’s assets abroad. d. A country experiencing a current account surplus will see its currency depreciate. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM Copyright Cengage Learning. Powered by Cognero.

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44. A clean floating exchange rate policy is a specific form of floating exchange rate policy in which a government _____. a. sets exchange rates on the basis of supply and demand b. adopts a pure market solution to determine exchange rates c. allows selective government intervention in determining the exchange rate d. links the exchange rate of a currency to the gold standard ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 45. Which of the following types of exchange rate policies is apt for a pure free market economy? a. Dirty float b. Managed float c. Clean float d. Target exchange rate ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 46. Which of the following best describes a rate where selective government intervention works hand-in-hand with market conditions to determine exchange rates? a. Free float rate b. Fixed rate c. Dirty float rate d. Target exchange rate ANSWER: c Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 47. What type of exchange rates have specified upper or lower bounds within which the exchange rate is allowed to fluctuate? a. Fixed exchange rates b. Target exchange rates c. Free float exchange rates d. Dirty float exchange rates ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 48. The setting of East and West Germany's currencies at a 1:1 ratio to each other during the German unification in 1990 is an example of a _____. a. managed float rate policy b. floating rate policy c. target exchange rate policy d. fixed exchange rate policy ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 49. Which of the following characterizes the peg policy in foreign exchange rates? a. It links a developed country’s currency to the gold standard. b. It stabilizes the import and export prices for developing countries. c. It is a type of floating exchange rate policy. d. It is primarily used by developed countries to control inflation. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 50. The bandwagon effect is an example of the way foreign exchange rates are directly affected by what? a. Exchange rate policy b. Investor psychology c. Purchasing power parity d. Balance of payments ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM Copyright Cengage Learning. Powered by Cognero.

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51. In foreign exchange, what is said to have occurred when investors move in the same direction at the same time, like a herd? a. Placebo effect b. Bandwagon effect c. Edge effect d. Positive correlation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 52. Capital flight is a phenomenon in which a large number of individuals and companies exchange _____. a. domestic goods for gold b. gold for domestic goods c. foreign currency for a domestic currency d. domestic currency for a foreign currency ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 53. Between 1870 and 1914, the value of most major currencies was maintained by fixing their prices in terms of _____. a. the dollar b. the yuan c. gold d. diamonds Copyright Cengage Learning. Powered by Cognero.

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ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 54. Which of the following is one of the major reasons the gold standard was abandoned? a. The increased flow of gold from the US into foreign central banks b. The competitive devaluation of currencies during the Great Depression c. The strengthening of the US dollar due to the rise in productivity levels in the United States d. The United States' unilateral announcement that the dollar would not be convertible to gold ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 55. Which of the following was true of the Bretton Woods system? a. All currencies in the system had floating exchange rates. b. All currencies were pegged at a fixed rate to the dollar. c. All currencies were maintained by fixing their prices in terms of gold. d. All currencies in the system were required to be gold convertible. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies Bloom's: Understand 11/12/2021 2:59 PM 3/9/2022 10:08 PM

56. Which of the following resulted in the abandoning of the Bretton Woods system in the 1970s? a. The inflation rates in the United States and other developed counties were low. b. The United States was not running a trade deficit. c. The dollar became inconvertible into gold. d. Most countries wanted to return to the gold standard system. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 57. The post-Bretton Woods system is a system of flexible exchange rate regimes with _____. a. the Japanese yen as its common denominator b. the American dollar as its common denominator c. gold as its common denominator d. no official common denominator ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 58. The weight a member country carries within the IMF, which determines the amount of its financial contribution, its capacity to borrow from the IMF, and its voting power is referred to as its _____. Copyright Cengage Learning. Powered by Cognero.

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a. grant b. accommodation c. quota d. balance of payment ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 59. Which of the following is the funding source for the International Monetary Fund? a. Member-country quota b. Foreign direct investment c. Subsidiary investing d. Currency trading ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 60. What allows participants to buy and sell currencies now for future delivery? a. Currency swaps b. Direct transactions c. Spot transactions d. Forward transactions ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 61. Which of the following foreign exchange transactions provide protection to traders and investors from being exposed to fluctuations of the spot rate? a. Spot transactions b. Forward transactions c. Direct transactions d. Currency swaps ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managing Currency Risk QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 62. If the forward rate of the euro per dollar is higher than the spot rate, the euro has a _____. a. high spread b. low spread c. forward discount d. forward premium ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managing Currency Risk QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Apply 11/12/2021 2:59 PM 3/9/2022 10:08 PM

63. What is defined as the conversion of one currency into another at Time 1, with an agreement to revert it back to the original currency at a specific Time 2 in the future? a. Currency swap b. Currency hedging c. Spot transaction d. Forward transaction ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 64. Which of the following is true of the bid rate in foreign exchange markets? a. It is always higher than the offer rate. b. It is always lower than the offer rate. c. It is always equal to the offer rate. d. It does not affect the spread of the exchange. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 65. What is defined as the difference between the offer price and the bid price in a foreign exchange? a. Cost to serve Copyright Cengage Learning. Powered by Cognero.

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b. Spread c. Forward discount d. Forward premium ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 66. What term refers to companies spreading out their activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions? a. Currency hedging b. Currency pegging c. Strategic hedging d. Currency swapping ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managing Currency Risk QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 67. A currency board is a monetary authority that issues notes and coins convertible into a key foreign currency at what kind of exchange rate? a. Clean floating b. Dirty floating c. Fixed d. Target ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 68. Which of the following is an advantage of a strong US dollar? a. US importers will find it easier to compete with low-cost imports. b. US firms find it easier to acquire foreign targets. c. US firms will experience less competitive pressure to keep prices low. d. US tourists will find it more expensive when traveling abroad. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 69. Which of the following is an advantage of a weak US dollar? a. US consumers benefit from low prices on imports. b. US tourists enjoy lower prices abroad. c. Foreign firms find it harder to acquire US targets. d. Foreign tourists enjoy lower prices in the US. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/9/2022 10:08 PM

70. A manager arguing against currency hedging would most likely argue that _____. a. currency hedging eats into company profits b. currency hedging leaves firms at the mercy of the spot market c. currency hedging decreases stability of cash flows and earnings d. currency hedging is mainly a practice of very large MNEs ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 71. List the five underlying building blocks that determine the supply and demand of foreign exchange. ANSWER: The five underlying building blocks in foreign exchange are (1) relative price differences, (2) interest rates and monetary supply, (3) productivity and balance of payments, (4) exchange rate policies, and (5) investor psychology. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 72. Identify the difference between fixed and floating exchange rates. Provide an example of a specific situation where either the fixed or floating exchange rates were used. ANSWER: There are two major exchange rate policies: (1) floating rate and (2) fixed rate. Governments adopting the floating (or flexible) exchange rate policy tend to be free market believers, willing to let the demand-and-supply conditions determine exchange rates—usually on a daily basis via the foreign exchange market. Another major exchange rate policy is the fixed exchange rate policy—countries fix the exchange rate of their currencies relative to other currencies. Both political and economic rationales may be at play. During the German reunification in 1990, the West German Copyright Cengage Learning. Powered by Cognero.

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government, for political considerations, fixed the exchange rate between West and East German mark as 1:1. Economically, the East German mark was not worth that much. Politically, this exchange rate reduced the feeling of alienation and resentment among East Germans, thus facilitating a smoother unification process. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 73. Describe what it means for a country to peg its currency to another, and give two benefits to adopting this policy. ANSWER: Pegging is a stabilizing policy of linking a developing country’s currency to a key currency. When a country pegs its currency to another, the value of the currency strengthens or weakens according to the currency it is pegged to. Most countries that choose to peg their currency choose the US dollar. A country that pegs its currency takes advantage of two benefits. First, a peg stabilizes the import and export prices for developing countries. Second, many countries with high inflation have pegged their currencies to the US dollar to restrain domestic inflation. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Determines Foreign Exchange Rates? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-01 - LO: 07-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 74. Briefly explain the cause for the fall of the Bretton Woods System. ANSWER: By the late 1960s and early 1970s, a combination of rising productivity elsewhere and US inflationary policies led to the demise of the Bretton Woods system. First, (West) Germany and other countries caught up in productivity and exported more, and the United States ran its first post-1945 trade deficit in 1971. Second, in the 1960s, in order to finance both the Vietnam War and Great Society welfare programs, President Lyndon Johnson increased government spending, not by additional taxation, but by increasing money supply. These Copyright Cengage Learning. Powered by Cognero.

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actions led to rising inflation levels and strong pressures for the dollar to depreciate. The Bretton Woods system also became a pain in the neck for the United States, because the exchange rate of the dollar was not allowed to unilaterally change. Consequently, there was a hemorrhage of US gold flowing into the coffers of foreign central banks. In August 1971, in order to stop such hemorrhage, President Richard Nixon unilaterally announced that the dollar was no longer convertible into gold. In retrospect, the Bretton Woods system had been built on two conditions: (1) the US inflation rate had to be low and (2) the US could not run a trade deficit. When both these conditions were violated, the demise of the system was inevitable. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution of the International Monetary System QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-02 - LO: 07-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 75. Explain, with the help of examples, the three primary types of foreign exchange transactions. ANSWER: There are three primary types of foreign exchange transactions: (1) spot transactions, (2) forward transactions, and (3) swaps. Spot transactions are the classic single-shot exchange of one currency for another. For example, Canadian tourists buying several thousand euros in Italy with Canadian dollars will get their euros from a bank right away. Forward transactions allow participants to buy and sell currencies now for future delivery, typically in 30, 90, or 180 days, after the date of the transaction. The primary benefit of forward transactions is to protect traders and investors from being exposed to the fluctuations of the spot rate, an act known as currency hedging. Currency hedging is a way to minimize the foreign exchange risk inherent in all non-spot transactions, which characterize most trade and FDI deals. Traders and investors expecting to make or receive payments in a foreign currency in the future are concerned whether they will have to make a greater payment or receive less in terms of the domestic currency, should the spot rate changes. For example, if the forward rate of the euro (€/US$) is exactly the same as the spot rate, the euro is “flat.” If the forward rate of the euro per dollar is higher than the spot rate, the euro has a forward discount. A third major type of foreign exchange transactions is swap. A currency swap is the conversion of one currency into another in Time 1, with an agreement to revert it back to the original currency at a specific Time 2 in the future. Deutsche Bank may have an excess balance of British pounds but need dollars. At the same time, Union Bank of Switzerland (UBS) may have more dollars than it needs at the moment but is looking for more British pounds. They can negotiate a swap agreement in which Deutsche Bank agrees to exchange with UBS pounds for dollars today and dollars for pounds at a specific point in the future. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managing Currency Risk Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 76. Compare and contrast the three primary strategies companies use to cope with currency risks. ANSWER: There are three primary strategies: (1) invoicing in their own currencies, (2) currency hedging, and (3) strategic hedging. The most basic way is to invoice customers in your own currency. By invoicing in dollars, many US firms have enjoyed such protection from unfavorable foreign exchange movements. Currency hedging is risky in case of wrong bets of currency movements. Strategic hedging means spreading out activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions. Therefore, strategic hedging can be considered as currency diversification. It reduces exposure to unfavorable foreign exchange movements. Strategic hedging is conceptually different from currency hedging. Currency hedging focuses on using forward contracts and swaps to contain currency risks, a financial management activity that can be performed by in-house financial specialists or outside experts (such as currency traders). Strategic hedging refers to geographically dispersing operations—through sourcing or FDI—in multiple currency zones. By definition, this is more strategic, involving managers from many functional areas (such as production, marketing, and sourcing) in addition to those from finance. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managing Currency Risk QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-03 - LO: 07-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 77. Compare and contrast the advantages and disadvantages of a strong and a weak dollar. ANSWER: A strong (appreciating) dollar: Advantages: • US consumers benefit from low prices on imports. • Lower prices on foreign goods help keep US price level and inflation level low. • US tourists enjoy lower prices abroad. • US firms find it easier to acquire foreign targets. Disadvantages: Copyright Cengage Learning. Powered by Cognero.

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• US exporters have a hard time to compete on price abroad. • US firms in import-competing industries have a hard time competing with low-cost imports. • Foreign tourists find it more expensive when visiting the US. • Exporters from the rest of the world have a hard time competing on price abroad. A weak (depreciating) dollar: Advantages: • US exporters find it easier to compete on price abroad. • US firms face less competitive pressure to keep prices low. • Foreign tourists enjoy lower prices in the US. • Foreign firms find it easier to acquire US targets. • The US can print more dollars to export its problems to the rest of the world. • Exporters from the rest of the world find it easier to compete on price abroad, boosting worldwide trade. Disadvantages: • US consumers face higher prices on imports. • Higher prices on imports contribute to higher price level and inflation level in the US. • US tourists find it more expensive when traveling abroad. • Governments, firms, and individuals outside the US holding dollar-denominated assets suffer from value loss of their assets. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-04 - LO: 07-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM 78. What determines the success and failure of currency management around the globe? ANSWER: From an institution-based standpoint, the “rules of the game”—economic, political, and psychological—enable or constrain firms. From a resource-based perspective, how firms develop valuable, unique, and hard-to-imitate capabilities in currency management may make or break them. As a result, three implications for action emerge. First, foreign exchange literacy must be fostered. Savvy managers need to not only pay attention to the broad longrun movements informed by PPP, productivity changes, and balance of payments, but also to the fickle short-run fluctuations triggered by interest rate changes and investor mood swings. Second, risk analysis of any country must include its currency risks. Finally, a country’s high currency risk does not necessarily suggest that this country needs to be totally avoided. Instead, it calls for a prudent currency risk management strategy—via currency hedging, strategic hedging, or both. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.07-05 - LO: 07-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 2:59 PM DATE MODIFIED: 3/9/2022 10:08 PM

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Chapter 08 - Global and Regional Integration 1. Regional economic integration refers to efforts to reduce trade and investment barriers within one economic region. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 2. European Economic Community is the official title of European economic integration since 1993. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 3. The GATT was a multilateral agreement governing the international trade of goods (merchandise) before World War II. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:00 PM 3/9/2022 10:04 PM

4. General Agreement on Tariffs and Trade (GATT) expanded considerably to become the EU. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 5. While emphasizing economic benefits, the most fundamental goal of global economic integration is to promote peace. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 6. The GATT system is an example of a strictly bilateral trading system. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 7. The crucial principle of GATT/WTO is nondiscrimination, ensuring that countries do not discriminate among its trading partners. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 8. Every time a WTO country lowers a trade barrier, it must do the same for all other member countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 9. The GATT differed from the WTO in that the GATT was not considered an organization. a. True b. False ANSWER: True POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 10. The Multifiber Arrangement (MFA) was in violation of the GATT. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 11. Local content requirements is an example of a nontariff barrier. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 12. GATT 1994 refers to the agreement governing the international trade of goods in the WTO. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 13. TRIPS is a WTO agreement governing the international trade of services. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 14. The WTO sets time limits for a panel, consisting of three neutral countries, to reach a judgment for trade dispute settlements. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

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15. One of the main objectives for establishing the WTO was to strengthen the trade dispute settlement mechanism. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 16. All WTO members are obliged to follow WTO rulings on settlement disputes as law. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 17. The Doha Round primarily aimed at strengthening economic development in developed economies. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Creation of Value Bloom's: Remember 11/12/2021 3:00 PM 3/9/2022 10:04 PM

18. The refusal of Japan, the EU, and the US to reduce farm subsidies was one of the reasons for the collapse of the Doha Round. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing World Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 19. Britain, Denmark, and Sweden are the only three countries which did not join the EU. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 20. All members of the EU have adopted the euro as their currency. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 21. A customs union imposes common external policies on nonparticipants in order to combat trade diversion. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 22. NAFTA is an example of an economic union. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 23. The former Soviet Union is an example of a political union. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 24. The Andean Community’s largest trading partner is the United States. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 25. Passport-free travel zones can only be set up in political unions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 26. All the countries of Europe are part of the European Union (EU). Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 27. NAFTA is a free trade agreement between Latin American countries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 28. The Andean Community is more pro-free trade than Mercosur. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:00 PM 3/9/2022 10:04 PM

29. The UNASUR is a free trade agreement between the United States and five Central American countries and the Dominican Republic. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 30. The Mercosur countries collectively represent the second-largest US export market in Latin America. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 31. ACFTA brought China into a free trade agreement with the Association of Southeast Asian Nations. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 32. The Trans-Pacific Partnership (TPP) is a multilateral free trade agreement that aims to further liberalize the economies of the entire Western Hemisphere. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 33. Regional integration deals in Africa show the least amount of protectionism in international trade. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 34. From an institution-based view, China's economic development since it joined WTO shows the number of benefits associated with WTO membership. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-07 - LO: 08-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 35. Due to the slowdown of multilateralism and the acceleration of regionalism, managers are advised to focus their attention more at global than regional levels. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-08 - LO: 08-08 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 36. Which of the following is an example of regional economic integration? a. The European Union b. The British Commonwealth c. The Cingular and AT&T merger d. The Commonwealth of Independent States ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/9/2022 10:04 PM

37. What multilateral agreement was created in 1948 to govern the international trade of goods (merchandise)? a. WTO b. GATT c. UN d. EU ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 38. The General Agreement on Tariffs and Trade (GATT) expanded considerably into a multilateral trading system called _____. a. EU b. NAFTA c. UN d. WTO ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 39. Which of the following is referred to as a multilateral trading system? a. WTO b. EU c. NAFTA d. ASEAN ANSWER: a Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 40. Which of the following agreements was in direct violation of the principles of GATT? a. Trade policy review b. Multifiber Arrangement c. General Agreement on Trade in Services d. Trade-Related Aspects of Intellectual Property Rights ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 41. GATS is a WTO agreement governing _____. a. trade dispute settlement mechanisms b. the international trade of services c. intellectual property rights d. trade policy reviews ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing World Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Understand 11/12/2021 3:00 PM 3/9/2022 10:04 PM

42. Which of the following is a WTO agreement regulating intellectual property? a. GATT b. GATS c. MFA d. TRIPS ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 43. One way that the WTO differs from the original GATT is that the WTO _____. a. has trade in services as its primary trade focus b. has provisions that allows members to review other members’ trade policies c. has no rules governing intellectual property rights d. has no mechanism to settle member disputes ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing World Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 44. Which of the following was the only round of trade negotiations sponsored by the WTO to reduce agricultural subsidies, slash tariffs, and strengthen intellectual property protection? a. Copenhagen Consensus b. WTO Ministerial Conference of 1999 c. Uruguay Round Copyright Cengage Learning. Powered by Cognero.

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d. Doha Round ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing World Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 45. Which of the following was part of the agenda of the Doha Round? a. Reducing agricultural subsidies in developing countries b. Increasing tariffs in the industries that developed countries might benefit from c. Freeing up trade in services d. Loosening intellectual property protection ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing World Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 46. A free trade area _____. a. imposes common external policies on nonparticipants in order to combat trade diversion b. permits the free movement of goods and people among member nations c. comprises a group of countries that remove trade barriers among themselves d. coordinates and harmonizes economic policies in order to blend their economies into a single economic entity ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 3:00 PM 3/9/2022 10:04 PM

47. NAFTA is an example of a(n) _____. a. free trade area b. customs union c. common market d. economic union ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 48. Which of the following characterizes a customs union? a. It requires each member to maintain different external policies regarding non-members. b. It imposes common external policies on non-members. c. It integrates the political and economic affairs of a region. d. It permits the free movement of goods and people among its members. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 49. The EU is an example of a(n) ____. a. free trade area b. customs union Copyright Cengage Learning. Powered by Cognero.

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c. common market d. economic union ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 50. Which of the following is an example of a customs union? a. The former Soviet Union b. The EU (European Union) c. The Andean Community (South America) d. The NAFTA (North American Free Trade Agreement) ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 51. In what type of regional economic integration do members coordinate and harmonize monetary, fiscal, and taxation policies? a. Customs union b. Common market c. Economic union d. Free trade area ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 52. Which of the following terms refers to a group of countries that use a common currency? a. Political union b. Customs union c. Monetary union d. Trade union ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 53. Which of the following is an example of a political union? a. The EU b. The United States c. The British Commonwealth d. The Andean Community ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 54. The European Union (EU) was established when which of the following went into effect in 1993? Copyright Cengage Learning. Powered by Cognero.

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a. Treaty of Rome b. Maastricht Treaty c. Lisbon Treaty d. ECSC Treaty ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 55. Which of the following terms describes the EU? a. Federation b. Economic union c. Unified states d. Sovereign union ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 56. Which of the following features refers to the Schengen area in the EU? a. A passport-free travel zone b. An open migration zone for workers c. A common currency zone d. A Non-EU members’ zone ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in Europe Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 57. The Euro is currently used in _____. a. all EU member countries b. all European countries c. 19 EU countries d. Schengen countries only ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 58. Which of the following regions describes the euro zone? a. A region that comprises EU members without a common currency b. A region that comprises all EU members c. A region that has passport-free traveling d. A region that has a common currency ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM Copyright Cengage Learning. Powered by Cognero.

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59. In which of the following types of economic integration systems will the establishment of a common currency be possible? a. Customs union b. Economic union c. Free trade area d. Common market ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 60. Which of the following is an effect of adopting the euro as a currency for EU members? a. It implements independent monetary policies for each nation. b. It provides unlimited flexibility in fiscal policy making. c. It increases currency conversion costs. d. It facilitates direct and transparent price comparison. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 61. Which of the following is a free trade agreement among Canada, the United States, and Mexico? a. Andean Community b. ASEAN c. USMCA d. Commonwealth of Independent States ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 62. Which of the following is true of the customs unions in South America? a. The Andean Community’s largest trading partner is China. b. Mercosur is more pro-free trade than the Andean Community. c. Andean Community and Mercosur countries are today integrated into the CAFTA. d. Mercosur is relatively more protectionist than the Andean Community. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 63. Which of the following countries was the Andean Community's largest trading partner? a. Germany b. Mexico c. China d. United States ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/9/2022 10:04 PM

64. CAFTA refers to _____. a. a regional integration mechanism integrating two existing customs unions (Andean Community and Mercosur) in South America b. a free trade agreement between the United States and five Central American countries and the Dominican Republic c. a proposed free trade area for the entire Western Hemisphere d. a proposed customs union between nations that are present near the Pacific Ocean ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 65. Which of the following is true of the Union of South American Nations (USAN/UNASUR)? a. It is made of nations that are not present in either the Andean Community or Mercosur. b. It is an integration of Mercosur and the Andean Community. c. It is a proposed free trade area integrating the Andean Community and ASEAN. d. Its integration mechanism is modeled after the NAFTA. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in the Americas QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 66. Which of the following is the economic trade agreement between Australia and New Zealand? a. CER b. ASEAN c. APEC d. CAFTA Copyright Cengage Learning. Powered by Cognero.

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ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 67. Which of the following organizations underpins regional economic integration in Southeast Asia? a. ASEAN b. APEC c. ANZCERTA d. UNASUR ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 68. Inspired by the EU’s success, ASEAN set up an FTA called _____ in 1992. a. NAFTA b. ACFTA c. AFTA d. CAFTA ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 3:00 PM 3/9/2022 10:04 PM

69. What is the official title for regional economic integration involving 21 member economies around the Pacific? a. UNASUR b. APEC c. NAFTA d. CAFTA ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 70. Which of the following countries is an original signatory of the Trans-Pacific Partnership (TPP)? a. The United States of America b. Australia c. Chile d. Japan ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 71. Explain possible benefits of global economic integration. ANSWER: Political benefits ● Promote peace by promoting trade and investment. ● Build confidence in a multilateral trading system. Copyright Cengage Learning. Powered by Cognero.

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Economic benefits ● Disputes are handled constructively. ● Rules make life easier and discrimination impossible for all participating countries. ● Free trade and investment raise incomes and stimulate economic growth. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Economic Integration QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 72. Discuss the formation of GATT and the issues that precipitated the formation of the WTO (Post GATT). ANSWER: Created in 1948, the GATT was technically an agreement but not an organization. Its major contribution was to reduce the level of tariffs by sponsoring rounds of multilateral negotiations. As a result, the average tariff in developed economies dropped from 40% in 1948 to 3% in 2005. Between 1950 and 1995 (when the GATT was phased out to become the WTO), while world GDP grew about fivefold, world merchandise exports grew about 100 times. Despite the GATT’s phenomenal success in bringing down tariff barriers, it was clear by the mid-1980s, when the Uruguay Round was launched, that reforms would be necessary. Such reforms were triggered by three concerns. First, because of the GATT’s declared focus on merchandise trade, neither trade in services nor intellectual property (IP) protection was covered. Both of these areas were becoming more important. Second, in merchandise trade, there were a lot of loopholes that called for reforms. One of the most (in)famous loopholes was the Multifiber Arrangement (MFA) designed to limit free trade in textiles, which was a direct violation of the letter and spirit of the GATT. Finally, the GATT’s success in reducing tariffs, combined with the global recessions in the 1970s and the 1980s, led many governments to invoke nontariff barriers (NTBs), such as subsidies and local content requirements. Unlike tariff barriers that were relatively easy to verify and challenge, NTBs were more subtle but more pervasive, thus triggering a growing number of trade disputes. The GATT, however, lacked effective dispute resolution mechanisms. Thus, at the end of the Uruguay Round, participating countries agreed in 1994 to upgrade the GATT and launch the WTO. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing World Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:00 PM 3/9/2022 10:04 PM

73. Describe the pros and cons of regional economic integration. ANSWER: Economically, the three benefits associated with regional economic integration are similar to those associated with global economic integration: (1) disputes are handled constructively; (2) consistent rules make life easier, and discrimination impossible, for participating countries within one region; and (3) free trade and investment raise incomes and stimulate economic growth. Moreover, regional economic integration may bring additional benefits, such as a larger market, simpler standards, and economies of scale. However, not everything is rosy in regional integration. A case can be made against it. Politically, regional integration, which is centered on preferential treatments for firms within a region, discriminates against firms outside a region, thus undermining global integration. Of course, in practice, global deals (such as the Doha Round) are challenging to accomplish, and regional deals emerge as realistic alternatives. Economically, regional integration may result in some loss of sovereignty. The 19 EU members adopting the euro can no longer implement independent monetary policies. The simultaneous existence of both pros and cons means that countries are often cautious in joining regional economic integration. Norway and Switzerland chose not to join the EU. Even when countries are part of a regional deal, they sometimes choose to stay out of certain areas. For example, EU members Britain, Denmark, and Sweden refused to adopt the euro. More recently, Britain chose to withdraw from the EU. Overall, different levels of enthusiasm call for different types of regional economic integration. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 74. Describe the European Union as an economic union. ANSWER: The EU today is an economic union. Internal trade barriers have been mostly removed. In aviation, the EU now has a single market, which means all European carriers compete on equal terms across the EU (including domestic routes in a foreign country). Non-EU airlines are not allowed to fly between pairs of cities within Germany. However, non-German, EU airlines (such as Ireland’s Ryanair) can fly between any pair of cities within Germany. On the ground, it used to take Spanish truck drivers 24 hours to cross the border into France, due to paperwork requirements and checks. Since 1992, passport and customs control within most (but not all) member countries of the EU has been disbanded, and checkpoints at border crossings are no longer manned (until COVID-19). The area covered by EU countries became known as the Schengen passport-free travel zone, named after Schengen, Luxembourg, where the agreement was signed in 1985. Now, Spanish trucks can move from Spain to France non-stop, similar to how American trucks go from Texas to Oklahoma. At present, 22 of the 27 EU member countries are in the Schengen zone. Copyright Cengage Learning. Powered by Cognero.

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As an economic union, one of the EU’s proudest accomplishments—but also one of its most significant headaches—is the introduction of a common currency, the euro, initially in 12 of the EU 15 countries. Since then, seven more countries have joined the euro zone, resulting in a total of 19 member countries. Today’s euro zone accounts for approximately 340 million people and 21% of world GDP (relative to 24% for the United States). POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 75. Discuss the benefits and costs faced by the EU member countries sharing a common currency, the euro. ANSWER: Benefits ● Reduce currency conversion costs. ● Facilitate direct price comparison. ● Impose monetary discipline on governments. Costs ● Unable to implement independent monetary policy. ● Limit the flexibility in fiscal policy (in areas such as deficit spending). POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in Europe QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 76. Explain the formation of APEC. ANSWER: While ASEAN was deepening its integration, Australia was afraid that it might be left out and suggested in 1989 that ASEAN and CER countries form the Asia-Pacific Economic Cooperation (APEC). While Japan was invited and happily agreed to join, ASEAN and CER countries also feared that Japan might dominate the group and create a de facto “yen bloc.” During WWII, Japan invaded most countries, bombed Darwin and attacked Sydney harbor in Australia. Bitter memories of Japanese wartime atrocities seemed to die hard. China was invited too. At that time, China was far less significant economically than it is now, and thus Copyright Cengage Learning. Powered by Cognero.

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could hardly counterbalance Japan. Then the United States requested to join APEC, citing its long West Coast that would qualify it as a Pacific country. While the United States could certainly serve as a counterweight for Japan, the US membership would also change the character of APEC, which had been centered on ASEAN and CER. Once the floodgates for membership were open, Canada, Chile, Mexico, Peru, and Russia all eventually got in, each citing their long Pacific coastlines. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Economic Integration in the Asia Pacific and Africa QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-06 - LO: 08-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 77. Discuss whether global and regional economic integration create more benefits or more challenges. ANSWER: In the absence of global economic integration, regional economic integration is often regarded as the next best thing to facilitate free trade—at least within a region. Some may even argue that regional integration represents building blocks for eventual global integration. For example, the EU now participates in WTO negotiations as one entity, which seems like a “building block.” Individual EU member countries no longer enter such talks. However, another school of thought argues that regional integration has become stumbling blocks for global integration. By design, regional integration provides preferential treatments to members and, at the same time, discriminates against non-members (which is allowed by WTO rules). It is still a form of protectionism centered on “us versus them,” except “us” is now an expanded group of countries. The proliferation of regional trade deals, thus, may be alarming. In the first few decades after WWII, the United States avoided regional deals. In part alarmed by the EU, the United States, with Canada and Mexico, launched NAFTA, which evolved into USMCA in 2020. Likewise, China signed its first FTA agreement (ACFTA) in 2002 with ASEAN, and more recently China joined RCEP in 2020. Clearly, the trend is accelerating. Of course, all countries that are party to some regional deals participate in WTO talks, arguing that they are walking on two legs: regional and global. Yet, “instead of walking on two legs,” critics such as Columbia professor Jagdish Bhagwati argue, “we have wound up on all fours”—crawling with slow progress. This sorry state is triggered by the pursuit of individual countries’ interest in a globally uncoordinated fashion. As regional deals proliferate, non-members feel that they are squeezed out, and begin plotting their own regional deals. Very soon, we end up having a global “spaghetti bowl.” POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-07 - LO: 08-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM 78. Discuss how the institution-based perspective accounts for the success of MNEs by focusing on regional opportunities. ANSWER: In order to address the question, “What determines the success and failure around the globe?” the entire chapter has been devoted to an introduction of the rules of the game as institutions governing global and regional economic integration. How does this knowledge help managers? Managers need to combine the insights from the institution-based view with those from the resource-based view to come up with strategies and solutions on how their firms can capitalize on opportunities presented by global and regional economic integration—or disintegration. Two broad implications for action emerge. First, given the slowdown of multilateralism and the acceleration of regionalism, managers are advised to focus their attention more at regional than global levels. To a large extent, they are already doing that. The majority of multinational enterprises (MNEs) generate most of their revenues in their home region (such as within the EU). The largest MNEs may have a presence all over the world, but their center of gravity (measured by revenues) is often still their home region. Thus, they are not really very “global.” Regional strategies make sense, because most countries within a region share some cultural, economic, and geographic similarities. From a resource-based standpoint, most firms are better prepared to compete on regional rather than global levels. Despite the hoopla associated with “global strategies,” managers, in short, must think local and downplay global (while not necessarily abandoning global). Second, managers must understand the rules of the game, both at global and regional levels, and endeavor to positively influence them. The typical attitude that “We don’t care about (trade) politics” can result in disaster when the rules of the game suddenly change in a negative direction. An important lesson is free trade is not free, and common market is not common. Free trade and common market require constant efforts and sacrifices to demonstrate, safeguard, and advance the gains from such global and regional economic integration. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.08-08 - LO: 08-08 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:00 PM DATE MODIFIED: 3/9/2022 10:04 PM

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Chapter 09 - The Entrepreneurial Firm 1. Firms with fewer than 500 employees in the United States are considered small- and medium-sized enterprises. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 2. Individuals who discover, evaluate, and exploit previously unexplored opportunities are referred to as entrepreneurs. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 3. The word “entrepreneurs” mostly refers to founders and owners of new businesses or managers of existing firms. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:01 PM 3/9/2022 10:55 PM

4. SMEs are the exclusive domain of entrepreneurship. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 5. Whether entrepreneurship is facilitated or hindered significantly depends on formal institutions governing how entrepreneurs start up new firms. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 6. International entrepreneurship is defined as “a combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations.” a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 7. SMEs tend to be less entrepreneurial than large firms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 8. Cultural values and norms are examples of informal institutions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 9. In general, governments in developed economies impose more procedures to start a company than those in poorer countries. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Motivation Concepts - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 10. Both formal and informal institutional constraints, as rules of the game, affect entrepreneurship. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Motivation Concepts - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 11. According to the resource-based view, the entrepreneurial resources must have inimitable resources to be successful. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM Copyright Cengage Learning. Powered by Cognero.

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12. An institution-based view suggests that firm-specific resources and capabilities largely determine entrepreneurial success and failure. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 13. One hallmark of entrepreneurial growth is a dynamic, flexible, guerrilla strategy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 14. The growth of an entrepreneurial firm can be viewed as an attempt to more fully use currently underutilized resources and capabilities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Motivation Concepts - DISC: Environmental Influence Bloom's: Understand 11/12/2021 3:01 PM 3/9/2022 10:55 PM

15. Owners, managers, and employees at large firms tend to be more innovative and take more risks than those at entrepreneurial firms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 16. Firms that are first to introduce new goods or services are likely to earn “monopoly profits” until competitors emerge. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 17. Compared to large firms, innovators at SMEs have limited ability to personally profit from their innovations because property rights usually belong to the corporation. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 18. Brazil and Hungary have the lowest level of informal investment in the world. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 19. Sweden has the lowest venture capitalist investment in the world. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 20. In entrepreneurial firms, an innovation strategy allows a potentially more sustainable basis for competitive advantage. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 21. Microfinance emerged in response to the lack of financing for entrepreneurial opportunities in many developing countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 22. Entrepreneurial opportunities exist to lower transaction costs and bring distant groups of people, firms, and countries together. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

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23. Foreign direct investment is the only way in which SMEs can enter foreign markets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 24. Domestic transaction costs are qualitatively higher than international transaction costs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 25. Direct exports are the sale of products made through export intermediaries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:01 PM 3/9/2022 10:55 PM

26. A letter of credit increases transaction costs by increasing transaction risks. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 27. Licensing is mostly used in the service industries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 28. Franchising is typically used in manufacturing industries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 29. Franchising enables SMEs to enter foreign markets. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 30. Foreign firms interested in becoming licensees or franchisees have to put their own capital up front. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 31. Foreign acquisitions are an example of an FDI entry into foreign markets. a. True b. False ANSWER: True POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 32. Entrepreneurial firms can internationalize while staying in domestic markets through indirect exports. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 33. Indirect export is one of the strategies used by entrepreneurial SMEs to internationalize without leaving their home country. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 34. A firm can internationalize by becoming a supplier for a foreign firm that is doing business in the domestic market. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 35. Becoming a licensee or franchisee of a foreign brand does not internationalize the licensee or franchisee firm. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 36. Family background and educational attainment correlate with entrepreneurship. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:01 PM 3/9/2022 10:55 PM

37. Entrepreneurs need to cultivate strong informal norms granting legitimacy to entrepreneurs. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-06 - LO: 09-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 38. It is impossible to internationalize without venturing abroad. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-06 - LO: 09-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 39. In the United States, small- and medium-sized enterprises (SMEs) are defined as firms with less than _____. a. 20 employees b. 250 employees c. 1000 employees d. 500 employees ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 40. Which of the following is a defining characteristic of entrepreneurship? a. Size of the firm b. Market share of the firm c. Ability to exploit opportunity d. Nationality of the individual or firm ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 41. Which of the following is true of SMEs? a. They are less entrepreneurial than large firms, on average. b. They account for over 95 per cent of total firms around the world. c. They generate less employment than larger firms around the world. d. They generally have more than a thousand employees per firm. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 42. In the European Union, small and medium-sized enterprises (SMEs) are defined as firms with less than _____. Copyright Cengage Learning. Powered by Cognero.

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a. 500 employees b. 250 employees c. 1000 employees d. 750 employees ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 43. Which of the following terms is defined as the identification and exploitation of previously unexplored opportunities? a. Distributorship b. Dealership c. Vendorship d. Entrepreneurship ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 44. Founders and/or owners of new businesses or managers of existing firms who identify and exploit new opportunities are called _____. a. bloggers b. entrepreneurs c. adjudicators d. arbitrators ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Entrepreneurship and Entrepreneurial Firms Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 45. Which of the following types of societies would most likely foster more entrepreneurship? a. Individualistic and high uncertainty-avoidance b. Collectivistic and high uncertainty-avoidance c. Collectivistic and low uncertainty-avoidance d. Individualistic and low uncertainty-avoidance ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 46. Which of the following is a part of the VRIO framework? a. Value b. Reliability c. Impulse d. Orientation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM Copyright Cengage Learning. Powered by Cognero.

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47. Among developed countries, which has the lowest rate of start-ups? a. United Kingdom b. United States c. Russia d. Japan ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 48. Which of the following is one of the four major characteristics associated with a growing entrepreneurial firm? a. Monotonousness b. Internationalization c. Inimitability d. Informality ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 49. Which of the following is the fundamental component required for an entrepreneurial mindset? a. Firm size b. Leadership c. Innovation d. Financing ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 50. With regard to investment in start-ups, investment by which of the following is considered an informal investment? a. Foreign entrants b. Friends c. Venture capitalists d. Banks ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 51. Which of the following is one of the nations with the lowest level of VC investment, as a percentage of GDP, in the world? a. Sweden b. The United States c. Greece d. South Africa ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM Copyright Cengage Learning. Powered by Cognero.

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52. Which of the following nations has the highest level of informal investment, as a percentage of GDP, in the world? a. Sweden b. China c. Greece d. Japan ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 53. Microfinance provides small loans used to do what? a. Pay mortgages b. Pay car loans c. Start small businesses d. Start subsidiaries ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 54. Which of the following supports the notion that most new ventures in China are financed by friends and family? a. Informal investments are outlawed in China. b. China lacks formal market-supporting institutions. c. Credit reporting agencies are abundant in China. d. Venture capitalists are the biggest investors for entrepreneurship in China. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 55. The term for a global movement to help eradicate poverty by lending small sums used to start small businesses is referred to as _____. a. foreign direct investments b. microfinance c. venture capital investment d. preferred financing ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 56. International new ventures are also referred to as _____. a. born global firms b. microfinance firms c. greenfield subsidiaries d. conglomerates ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM Copyright Cengage Learning. Powered by Cognero.

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57. Which of the following is one of the methods by which entrepreneurial firms internationalize by entering foreign markets? a. Harvest and exit b. Indirect exports c. Microfinancing d. Franchising ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 58. Which of the following terms is defined as the sale of products made by entrepreneurial firms in their home country to customers in other countries? a. Direct exports b. Letters of credit c. Licensing d. Indirect exports ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 59. Which of the following is a way to reach overseas customers by exporting through domestic-based export intermediaries? a. Direct exports b. Licensing c. Indirect exports Copyright Cengage Learning. Powered by Cognero.

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d. Letters of credit ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 60. In a manufacturing industry, what term refers to firm A’s agreement to give firm B the rights to use A’s proprietary technology (such as a patent) or trademark (such as a corporate logo) for a royalty fee paid to A by B? a. Franchising b. Bailment c. Adverse possession d. Licensing ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 61. In a service industry, what term refers to firm A’s agreement to give Firm B the rights to use A’s proprietary assets for a royalty fee paid to A by B. a. Adverse possession b. Franchising c. Bailment d. Licensing ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 62. Which of the following is a popular way to enter into international service markets? a. Licensing b. Harvest and exit c. Franchising d. Indirect exporting ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 63. Relative to licensing and franchising, what strategy allows a firm to have better control of how its proprietary technology is used while entering foreign markets? a. Harvest and exit methods b. Foreign direct investments c. Indirect exports d. Direct exports ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 64. Which of the following is one of the methods by which entrepreneurial firms internationalize by staying in domestic Copyright Cengage Learning. Powered by Cognero.

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markets? a. Harvest and exit sell-offs to foreign entrants b. Direct exports c. Strategic alliances by FDI d. Greenfield wholly owned subsidiaries abroad ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 65. What professionals perform an important "middleman" function by linking sellers and buyers overseas? a. Export intermediaries b. Indirect exporters c. Sporadic exporters d. Alliance partners ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 66. What is a financial contract that states that the importer's bank will pay a specific sum of money to the exporter upon delivery of the merchandise called? a. Bill of lading b. Deed c. Letter of credit d. Bill of exchange ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 67. Which of the following types of contracts are used between exporters and importers to reduce transaction risks? a. Letters of credit b. Articles of incorporation c. Licenses d. Bills of lading ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 68. Entrepreneurs selling an equity stake or the entire firm to foreign entrants are using what type of strategy to internationalize? a. Export b. Franchising c. Licensing d. Harvest and exit ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/9/2022 10:55 PM

69. Which of the following types of entrepreneurs are best described as people who start, grow, and sell several businesses throughout their career? a. Social entrepreneurs b. Lifestyle entrepreneurs c. Serial entrepreneurs d. Cooperative entrepreneurs ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 70. The model of internationalization that portrays the slow step-by step process an SME must go through to internationalize its business is referred to as the_____. a. indirect model b. stage model c. franchising model d. direct export model ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.09-05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 71. Explain the institution-based views in light of their effect on entrepreneurial success. ANSWER: Although entrepreneurship is thriving around the globe in general, its development is uneven. Whether entrepreneurship is facilitated or hindered significantly depends on formal institutions governing how entrepreneurs start up new firms. A World Bank survey, Doing Business, reports some striking differences in government regulations concerning how easy it is to start up new entrepreneurial firms in terms of registration, licensing, and incorporation. Copyright Cengage Learning. Powered by Cognero.

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In general, governments in developed economies impose fewer procedures and a lower total cost. On the other hand, entrepreneurs must endure harsher hurdles in poor countries. Overall, it is not surprising that the more entrepreneur-friendly these formal institutional requirements are, the more flourishing entrepreneurship is, and the more developed the economies become—and vice versa. As a result, more countries are now reforming their formal institutions in order to become more entrepreneur-friendly. In addition to formal institutions, informal institutions, such as cultural values and norms, also affect entrepreneurship. For example, because entrepreneurs necessarily take more risk, individualistic and low uncertainty-avoidance societies tend to foster relatively more entrepreneurs, whereas collectivistic and high uncertainty-avoidance societies may result in relatively fewer entrepreneurs. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 72. Explain the resource-based views in light of their effect on entrepreneurial success. ANSWER: The resource-based view sheds considerable light on entrepreneurship, with a focus on its value, rarity, imitability, and organizational (VRIO) aspects. First, entrepreneurial resources must create value. Second, resources must be rare. The best-performing entrepreneurs tend to have the rare knowledge and deeper insights about business opportunities. Third, resources must be inimitable. Fourth, entrepreneurial resources must be organizationally embedded. In sum, the resource-based view suggests that firm-specific (and in many cases, entrepreneurspecific) resources and capabilities largely determine entrepreneurial success and failure. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Entrepreneurship QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 73. Identify the three advantages offered by the innovation strategy used in a growing entrepreneurial firm. ANSWER: An innovation strategy offers three advantages. First, it allows a potentially more sustainable basis for competitive advantage. Firms that are first to introduce new goods or services are Copyright Cengage Learning. Powered by Cognero.

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likely to earn (quasi) “monopoly profits” until competitors emerge. If entrepreneurial firms come up with “disruptive technologies,” then they may redefine the rules of competition, thus wiping out incumbents' advantages. Second, innovation should be regarded broadly. Not only are technological breakthroughs innovations, but less-novel and still substantially new ways of doing business are also innovations. Most start-ups reproduce existing organizational routines but recombine them to create some novel product/service offerings. Third, entrepreneurial firms are uniquely ready for innovation. Owners, managers, and employees at entrepreneurial firms tend to be more innovative and risk-taking than those at large firms. In fact, many SMEs are founded by former employees of large firms who were frustrated by their inability to translate innovative ideas into realities at those firms. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 74. Explain the concept of microfinance. ANSWER: A highly innovative solution, called microfinance, has emerged in response to the lack of financing for entrepreneurial opportunities in many developing countries. Microfinance involves lending small sums (US$50–US$300) used to start small businesses, with the intention of ultimately lifting them out of poverty. Starting in Bangladesh in the 1970s by Muhammad Yunus, microfinance has now become a global movement. Yunus himself won a Nobel Peace Prize in 2006. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Growing the Entrepreneurial Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 75. Identify and explain the dilemma behind transaction costs and international entrepreneurial opportunities. ANSWER: Compared with domestic transaction costs (the costs of doing business), international transaction costs are qualitatively higher. Some costs are high due to numerous innocent differences in formal institutions and informal norms. Other costs, however, may be due to a Copyright Cengage Learning. Powered by Cognero.

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high level of potential opportunism that is hard to detect and remedy. Transaction costs may be so high that many firms may choose not to pursue international opportunities. A few firms, however, think innovatively and add international dimensions to their businesses without totally going abroad. These include direct exports, licensing/franchising, and foreign direct investment (FDI). POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 76. Discuss direct exporting, licensing/franchising, and FDI as strategies for entering a foreign market. Explain each, and detail strengths and weaknesses. ANSWER: Direct exporting entails the sale of products made by entrepreneurial firms in their home country to customers in other countries. This strategy is attractive because entrepreneurial firms are able to reach foreign customers directly. When domestic markets experience some downturns, sales abroad may compensate for such drops. However, one major drawback is that SMEs may not have enough resources to turn overseas opportunities into profits. Another way to enter international markets is through licensing and/or franchising. Usually used in manufacturing industries, licensing refers to Firm A’s agreement to give Firm B the rights to use A’s proprietary technology (such as a patent) or trademark (such as a corporate logo) for a royalty fee paid to A by B. Franchising is essentially the same idea, except it is typically used in service industries, such as fast food. One great advantage is that SME licensors and franchisers can expand abroad while risking relatively little of their own capital. Foreign firms interested in becoming licensees or franchisees have to put their own capital up front. A third entry mode is FDI. FDI may involve greenfield wholly owned subsidiaries, strategic alliances with foreign firms, and/or acquisitions of foreign firms. By planting some roots abroad, a firm becomes more committed to serving foreign markets. It is physically and psychologically closer to foreign customers. Relative to licensing and franchising, a firm is better able to control how its proprietary technology is used. However, FDI has two major drawbacks: cost and complexity. FDI requires both a nontrivial sum of capital and a significant managerial commitment. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internationalizing the Entrepreneurial Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Analyze 11/12/2021 3:01 PM 3/9/2022 10:55 PM

77. Is successful entrepreneurship based more on the “traits” of the entrepreneur or on the “institutions” at work in his or her environment? ANSWER: The “traits” school of thought argues that it is personal traits that matter. Compared with nonentrepreneurs, entrepreneurs seem more likely to possess a stronger desire for achievement and are more willing to take risks and tolerate ambiguities. Critics, however, argue that some of these traits, such as a strong achievement orientation, are not necessarily limited to entrepreneurs, but instead are characteristic of many successful individuals. The diversity among entrepreneurs makes any attempt to develop a standard psychological or personality profile futile. Critics suggest what matters is institutions— namely, the environments that set formal and informal rules of the game. Beyond the macro societal-level institutions, more micro institutions also matter. Family background and educational attainment have been found to correlate with entrepreneurship. Children of wealthy parents, especially those who own businesses, are more likely to start their own firms. So are better-educated people. Taken together, informal norms governing one’s socioeconomic group assert some powerful impact on the propensity to create new ventures. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Leadership Principles KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/9/2022 10:55 PM 78. What is the stage model? How does the stage model apply to internationalization? ANSWER: The stage model portrays SMEs internationalization as a slow, stage-by-stage process. Some authors argue, “the born-global view, although appealing, is a dangerous half-truth.” They maintain, “You must first be successful at home, then move outward in a manner that anticipates and genuinely accommodates local differences.” In other words, the teachings of stage models are still relevant. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.09-05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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Chapter 10 - Foreign Market Entry 1. Liability of foreignness is the inherent disadvantage firms experience in home countries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 2. In this age of globalization, customers don't discriminate against foreign firms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 3. The resource-based view suggests that firms need to take actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:01 PM 3/10/2022 7:27 AM

4. The existence of multiple currencies and the resultant currency risks can be viewed as informal trade and investment barriers. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 5. The resource-based view argues that foreign firms need to deploy overwhelming resources and capabilities to offset their liability of foreignness. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 6. Strategic goals and cultural and institutional distances influence the location of foreign entries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 7. Industrial parks refer to the clustering of economic activities in certain locations. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 8. Agglomeration explains why certain cities and regions can attract businesses even in the absence of obvious geographic advantages. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 9. Market-seeking firms go to countries that have a strong demand for their products and services. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 10. Innovation-seeking firms often single out the most efficient locations featuring a combination of scale of economies and low cost factors. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 11. Location-specific advantages never change and only tend to grow. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

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12. Cultural distance is the difference between two cultures along some identifiable dimensions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 13. According to the stage model, firms will enter culturally distant countries for their first internationalization. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 14. One of the advantages of being a first-mover is the opportunity to free ride on late-mover investments. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: When to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-03 - LO:10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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15. The preemption of scarce resources is a first-mover advantage. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: When to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-03 - LO:10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 16. One of the late-mover disadvantages is the establishment of entry barriers by the first-mover. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: When to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-03 - LO:10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 17. Late movers face greater technological and market uncertainties. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: When to Enter? QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-03 - LO:10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 18. The scale of entry refers to the amount of resources committed to entering a foreign market. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 19. Equity modes tend to reflect relatively smaller commitments to overseas markets, whereas non-equity modes are indicative of relatively larger, harder-to-reverse commitments. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 20. Nonequity modes do not require the establishment of independent organizations overseas. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 21. A firm that exports or imports, with or without FDI, is regarded as an MNE. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 22. Nonequity modes of entry include acquisitions and wholly-owned subsidiaries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 23. Licensing and franchising are examples of equity modes of entry. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 24. Turnkey projects cannot be established without FDI. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 25. The nonequity mode of indirect exports has better control over distribution than direct exports. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:01 PM 3/10/2022 7:27 AM

26. A disadvantage of licensing is high development costs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 27. An advantage of joint ventures is the shared costs, risks, and profits. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 28. Greenfield operations and acquisitions have complete equity and operational control. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:01 PM 3/10/2022 7:27 AM

29. Indirect exports are the most basic mode of entry, capitalizing on economies of scale in production concentrated in the home country. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 30. A build-operate-transfer (BOT) agreement is an equity mode of entry. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 31. Co-marketing has the ability to reach more customers but with limited control and coordination. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 32. An acquisition is an example of a wholly owned subsidiary. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 33. Greenfield operations are a type of wholly owned subsidiary that does not require any FDI. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 34. The “leverage” in the LLL framework focuses on an MNE’s deep understanding of its customer needs and wants. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-05 - LO:10-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 35. Emerging MNEs primarily lack proprietary ownership of technology compared to MNEs from developed economies. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-05 - LO:10-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 36. Liability of foreignness is _____. a. the positive perception of firms and products of the host country b. the negative perception of firms and products of the home country c. the inherent disadvantage foreign firms experience in host countries d. the inherent advantage foreign firms experience in home countries ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:01 PM 3/10/2022 7:27 AM

37. With regard to foreign market entry, the resource-based view argues that foreign firms need to _____. a. take actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries b. be aware of the numerous regulatory risks and trade and investment barriers c. deploy overwhelming resources and capabilities to offset their liability of foreignness d. understand the numerous differences in cultures, norms, and values ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 38. Which of the following terms refers to the clustering of economic activities in certain locations? a. Joint venture b. Agglomeration c. Expropriation d. Intrafirm trade ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Where to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 39. Companies with market-seeking strategic goals search for _____. a. abundance of strong market demand and customers willing to pay b. economies of scale and abundance of low cost factors c. abundance of innovative individuals, firms, and universities d. particular foreign locations where the required resources are found Copyright Cengage Learning. Powered by Cognero.

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ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 40. Efficiency-seeking firms go to countries that have _____. a. an abundance of natural resources and related transport and communication infrastructure b. a strong demand for their products and services c. world-class innovations (innovative individuals, firms, and universities) d. economies of scale and abundance of low-cost factors ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 41. The difference between two cultures along identifiable dimensions is known as _____. a. cultural cringe b. cultural distance c. reverse culture shock d. culture shock ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Where to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:01 PM 3/10/2022 7:27 AM

42. Which of the following conforms to the notion put forward by the school of thought associated with stage models? a. Firms will enter culturally distant countries during their first stage of internationalization. b. Considerations of strategic goals are more important than cultural/institutional considerations. c. Natural resource–seeking firms have compelling reasons to enter culturally and institutionally distant countries. d. Firms enter culturally distant countries in later stages when they may gain more confidence. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 43. Natural resource-seeking firms have compelling reasons to enter culturally and institutionally distant countries. This is a counter example of _____. a. the stage model b. large-scale entry c. the equity mode of entry d. the country-of-origin effect ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 44. Which of the following is a first-mover advantage? a. Avoidance of clash with a dominant firm at home Copyright Cengage Learning. Powered by Cognero.

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b. Opportunity to free ride on second mover investments c. Resolution of technological and market uncertainty d. No difficulty in adapting to market changes ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: When to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-03 - LO:10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 45. Which of the following is a late-mover advantage? a. Pre-emption of scarce resources b. Fewer technological and market uncertainties c. Proprietary and technological leadership d. Good relationships with key stakeholders such as governments ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: When to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-03 - LO:10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 46. Which of the following terms refers to the amount of resources committed to entering a foreign market? a. Scale of entry b. Mode of entry c. Institutional distance d. Benchmarking ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 47. Which of the following is a benefit of large-scale entries? a. There are no losses even if these large-scale “bets” turn out to be wrong. b. They have unlimited strategic flexibility in all markets. c. They experience no liability of foreignness. d. They demonstrate strategic commitment to certain markets. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 48. Which of the following is true of modes of entry? a. Nonequity modes require the establishment of independent organizations overseas. b. Nonequity modes are methods used to enter a market in the home country. c. Equity modes are indicative of relatively larger, harder-to-reverse commitments. d. Equity modes do not require the establishment of independent organizations overseas. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 49. The distinction between which of the following factors defines a firm as an MNE rather than one that merely exports Copyright Cengage Learning. Powered by Cognero.

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or imports? a. Direct and indirect exports b. Licensing and franchising c. Small- and large-scale of entry d. Equity and non-equity modes of entry ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 50. Which of the following is an advantage shared by both greenfield operations and acquisitions? a. Protection of know-how b. Fast entry speed c. Add new capacity to industry d. Low development costs ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 51. Which of the following characterizes an MNE from a non-MNE? a. It enters foreign markets via non-equity modes. b. It exports or imports with or without FDI. c. It enjoys OLI advantages. d. It enters foreign markets through FPI. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 52. Which of the following is a non-equity mode of entry? a. Acquisitions b. Joint ventures c. Turnkey projects d. Green-fields ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 53. Which of the following is an equity mode of entry? a. Indirect exports b. Wholly owned subsidiaries c. R&D contracts d. Licensing/franchising ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM Copyright Cengage Learning. Powered by Cognero.

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54. The most basic nonequity mode of entry, which capitalizes on economies of scale in production concentrated in the home country and provides better control over distribution, is a(n) _____. a. indirect export b. direct export c. turnkey project d. acquisition ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 55. Which of the following entry modes is a type of strategic alliance? a. Licensing b. Wholly owned subsidiary c. Acquisition d. Export ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 56. Which of the following is an advantage of direct exports? a. No trade barriers b. Low transportation costs for bulky products c. Avoid export processes d. Better control over distribution ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 57. Which of the following is a disadvantage of licensing and franchising? a. Little control over marketing b. High development costs c. High risk in overseas expansion d. Creation of a monopoly ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 58. Which of the following is an advantage of R&D contracts? a. Easy to negotiate and enforce contracts b. Negligible threat from competitors c. Continuous improvement of core innovation capabilities d. Ability to tap into the best cost-effective locations ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/10/2022 7:27 AM

59. An advantage of joint ventures is _____. a. the protection of know-how b. the access to partners’ assets c. the ease of global coordination d. the complete equity and operational control ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 60. A disadvantage of acquisitions is _____. a. the inability to add new capacity to industry b. the inability to coordinate globally c. high development costs d. the slow entry speed ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 61. Which of the following is true of indirect exports? a. They typically provoke protectionism, potentially triggering antidumping actions. b. They treat foreign demand as an extension of domestic demand. c. They export through domestically based export intermediaries. d. They do not enjoy the economies of scale similar to direct exports. ANSWER: c POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 62. Which of the following is true of licensing/franchising? a. The licensor/franchisor has to bear the full costs and risks associated with foreign expansion. b. The licensing/franchising strategy creates very limited competitors. c. The licensor/franchisor has the ability to coordinate globally. d. The licensor/franchisor does not have tight control over technology and marketing. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 63. In which of the following strategies do clients pay contractors to design and construct new facilities and train personnel? a. Franchising b. Turnkey projects c. Licensing d. Co-marketing ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:01 PM 3/10/2022 7:27 AM

64. Which of the following is a nonequity mode of entry used to build a longer-term presence by building and then operating a facility for a period of time before transferring operations to a domestic agency or firm? a. BOT agreement b. R&D contract c. JV d. WOS ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 65. Co-marketing refers to _____. a. a project in which clients pay contractors to market and distribute the product/service b. outsourcing agreements in marketing between firms c. efforts among a number of firms to jointly market their products and services d. selling the rights to intellectual property to another firm for a royalty fee ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 66. A greenfield operation refers to _____. a. a new corporate entity created and jointly owned by two or more parent companies b. a wholly owned subsidiary created by building a new factory and offices from scratch c. a wholly owned subsidiary created by acquisition d. an outsourcing agreement in R&D between firms Copyright Cengage Learning. Powered by Cognero.

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ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 67. Greenfield operations are similar to acquisitions in that they are both examples of _____. a. partially owned subsidiaries b. wholly owned subsidiaries c. non-equity mode of entry into foreign markets d. equity mode of entry into foreign markets limited to a contractual agreement ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How to Enter? QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 68. The country-of-origin effect refers to _____. a. the inherent advantages domestic firms experience in their home countries b. the inherent disadvantages foreign firms experience in home countries c. the positive or negative perception of firms and products from a certain country d. only the negative perception of firms and products from a certain country ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-05 - LO:10-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Remember 11/12/2021 3:01 PM 3/10/2022 7:27 AM

69. A recent survey revealed that more than nine out of ten people prefer a watch made by firms in Switzerland to one made in India, the US, or any other country. This is an example of _____. a. agglomeration b. the liability of foreignness c. benchmarking d. the country-of-origin effect ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-05 - LO:10-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 70. In the LLL framework, which of the following refers to an emerging MNE’s ability to identify and bridge gaps in its market? a. Leverage b. Linkage c. Learning d. Location ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.10-05 - LO:10-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:27 AM 71. Briefly explain the meaning of liability of foreignness. Why is it difficult for companies to succeed in foreign markets? Copyright Cengage Learning. Powered by Cognero.

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ANSWER:

Firms have to overcome the liability of foreignness, which is the inherent disadvantage that foreign firms experience in host countries due to their non-native status. There are numerous differences in formal and informal institutions governing the rules of the game. Local firms know the rules, but foreign firms have to invest resources to learn the rules. Although customers in this age of globalization supposedly no longer discriminate against foreign firms, the reality is that foreign companies are often discriminated against formally and informally. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM 72. How do foreign firms crack new markets against strong local competition? ANSWER: The answer focuses on two core perspectives: institution- and resource-based views. The institution-based view suggests that firms need to undertake actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries. Differences in formal institutions may lead to regulatory risks resulting from differences in political, economic, and legal systems. Numerous trade and investment barriers on a national and regional basis impact market entry strategies. Other formal barriers may include the existence of multiple currencies translating into currency risk. Informally, numerous differences in norms and values create another source of liability of foreignness. The resource-based view argues that foreign firms need to deploy overwhelming resources and capabilities to offset their liability of foreignness. In the absence of overwhelming resources and capabilities, the performance will be mediocre or worse. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Overcoming Liability of Foreignness QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-01 - LO:10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM 73. Describe how strategic goals drive the location of foreign entities. Copyright Cengage Learning. Powered by Cognero.

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ANSWER:

Favorable locations in certain countries may give firms operating there location-specific advantages. These advantages are the benefits a firm reaps from features specific to a particular location. Certain locations simply possess geographical features that are difficult for others to match. Beyond geographic advantages, location-specific advantages also arise from the clustering of economic activities in certain locations, usually referred to as agglomeration. Essentially, location-specific advantages stem from (1) knowledge spillovers among closely located firms that attempt to hire individuals from competitors, (2) industry demand that creates a skilled labor force whose members may work for different firms without having to move out of the region, and (3) industry demand that facilitates a pool of specialized suppliers and buyers to also locate in the region. Given that different locations offer different benefits, it is imperative that a firm match its strategic goals with potential locations. There are four strategic goals: ● Natural resource-seeking firms have to go to particular foreign locations where those resources are found. ● Market-seeking firms go to countries that have a strong demand for their products and services. ● Efficiency-seeking firms often single out the most efficient locations featuring a combination of scale economies and cost factors. ● Innovation-seeking firms target countries and regions renowned for world-class innovations. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM 74. What are the two schools of thought that have emerged concerning cultural distances? ANSWER: Cultural distance is the difference between two cultures along some identifiable dimensions, such as individualism or power distance. The first school of thought is associated with stage models, arguing that firms will enter culturally similar countries during their first stage of internationalization. Then firms may gain more confidence to enter culturally distant countries in later stages. The idea is intuitively appealing because it makes sense. A second school argues that considerations of strategic goals, such as marketing and efficiency, are more important than cultural/institutional considerations. For example, natural resource-seeking firms may have some compelling reasons to enter culturally and institutionally distant countries, such as Papua New Guinea for bauxite, Venezuela for oil, and Zambia for copper. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Where to Enter? QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-02 - LO:10-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM 75. Identify the advantages that pertain to first movers and late movers. ANSWER: First-mover advantages include (1) proprietary, technological leadership; (2) pre-emption of scarce resources; (3) establishment of entry barriers for late entrants; (4) avoidance of clashes with dominant firms at home; and (5) relationships with key stakeholders such as governments. Late mover advantages include (1) opportunity to free ride on first mover investments; (2) resolution of technological and market uncertainty; and (3) first-movers' difficulty of adapting to market changes. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: When to Enter? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-03 - LO:10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM 76. Compare and contrast between the strategies of direct and indirect exports. ANSWER: Direct exports are the most basic mode of entry, capitalizing on economies of scale in production concentrated in the home country and providing better control over distribution. This strategy essentially treats foreign demand as an extension of domestic demand, and the firm is geared toward designing and producing first and foremost for the domestic market. While direct exports may work if the export volume is small, it is not optimal when the firm has a large number of foreign buyers. Direct exports may provoke protectionism, potentially triggering antidumping actions. Another export strategy is indirect exports—namely, exporting through domestically based export intermediaries. This strategy not only enjoys the economies of scale similar to direct exports but is also relatively worry free. A significant amount of export trade in commodities such as textiles and meats, which compete primarily on price, is indirect through intermediaries. Indirect exports have some drawbacks. For example, third parties, such as export trading companies, may not share the same objectives as exporters. If the exporter is interested in knowing more about how its products perform overseas, indirect exports would not provide such knowledge. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM 77. What are turnkey projects? What are its advantages and disadvantages compared to other modes of entry? ANSWER: Turnkey projects refer to projects in which clients pay contractors to design and construct new facilities and train personnel. At project completion, contractors hand clients the proverbial key to facilities ready for operations, hence the term “turnkey.” The advantages include the ability to earn returns from process technology in countries where FDI is restricted (such as power generation). The drawbacks are twofold. If foreign clients are competitors, selling them state-of-the-art technology through turnkey projects may boost their competitiveness. Turnkey projects do not allow for a long-term presence after the key is handed to the clients. To obtain longer-term presence, build-operate-transfer (BOT) agreements are now often being used, instead of the traditional build-transfer projects. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM 78. Define a wholly owned subsidiary (WOS). What are the two primary means to set up a WOS? ANSWER: A wholly owned subsidiary (WOS) is a subsidiary located in a foreign country that is entirely owned by the parent multinational. There are two primary means to set up a WOS. One is to establish greenfield operations by building new factories and offices from scratch (on a proverbial piece of “green field” formerly used for agricultural purposes). There are three advantages to setting up greenfield operations. First, a greenfield WOS gives an MNE complete equity and management control, thus eliminating the headaches associated with JVs. Second, this undivided control leads to better protection of proprietary technology. Third, a WOS allows for centrally coordinated global actions. The other way to establish a WOS is an acquisition. Acquisition shares all the benefits of greenfield WOS but enjoys two additional advantages: (1) adding no new capacity and (2) faster entry speed. POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Moderate REFERENCES: How to Enter? QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.10-04 - LO:10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 7:28 AM

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Chapter 11 - Global Competitive Dynamics 1. Competitive dynamics are the actions and responses undertaken by competing firms. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 2. Tacit collusions typically lead to a cartel or trust. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 3. Fitnit and Fittin' are firms engaging in explicit collusion when they indirectly coordinate actions by signaling their intention to reduce output and maintain pricing above competitive levels. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Apply 11/12/2021 3:01 PM 3/10/2022 8:28 AM

4. Cartels are often labeled as anticompetitive and outlawed by antitrust laws. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 5. A cartel is an output- and price-fixing entity involving multiple competitors. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 6. Prisoner's dilemma is a type of game in which the outcome depends on two parties deciding whether to cooperate or to defect. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 7. Low barriers to entry into an industry make collusion between firms difficult. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 8. An industry with heterogeneous products, in which rivals are forced to compete on price, is likely to lead to collusion. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 9. Collusion is more difficult between firms with high market commonality than firms with low market commonality. a. True b. False ANSWER: False Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 10. An industry without a price leader makes it easier for firms in that industry to form collusions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 11. A price leader is a firm that sets the highest price in the industry. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 12. The price leader in a market possesses the capacity to punish. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 13. Mutual forbearance refers to retaliatory attacks on a competitor's other markets if this competitor attacks a firm's original market. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 14. Market commonality refers to the degree of similarity between two rival's products. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:01 PM 3/10/2022 8:28 AM

15. A low degree of market commonality suggests that if a firm attacks in one market, its rivals may engage in crossmarket retaliation. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 16. Antitrust policies aim to balance efficiency and fairness in trade. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 17. Formal institutions governing domestic competition are broadly guided by competition policy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 18. In order to win a predation case in the US, “an attempt to monopolize” must be proved against the accused. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 19. The International Trade Administration investigates antidumping cases in the United States. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 20. The antitrust policies in the United States make it difficult for incumbents to raise entry barriers for new entrants. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 21. Collusive price setting refers to price setting by monopolists or collusion parties at a level lower than the competitive level. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 22. The American antitrust policy is proincumbent and proproducer. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 23. Firm resources must create value when engaging rivals. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 24. Firms with a high degree of resource similarity and a low degree of market commonality are likely to have a high level of mutual forbearance. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 25. Firms with a high degree of resource similarity are likely to have similar competitive actions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

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26. Combining resource similarity and market commonality helps yield a framework of competitor analysis for any pair of rivals. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 27. The lowest intensity of rivalry between competitors is the result of high resource similarity and low market commonality. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 28. Blue ocean strategy focuses on attacking core markets defended by rivals. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 29. Making a rival aware of an attack makes it easier for the attacker to achieve its objective. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 30. Minimizing an opponent’s awareness, motivation, and capabilities is more likely to result in successful attacks. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 31. Firms are allowed to organize strategic alliances with rivals for cost reduction. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 32. A firm will not counterattack without the motivation to do so, for example, if the market is of marginal value. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-05 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 33. The awareness-motivation-capability (AMC) framework can help a firm understand when a competitor might launch an attack. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-05 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 34. The antitrust framework in the United States dates back to the 1890 Sherman Act. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-05 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 35. Antitrust laws are only applicable to foreign firms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-05 - LO: 11-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 36. The process of anticipating rivals’ actions in order to both revise a firm’s plan and prepare to deal with rivals’ response is called _____. a. mutual forbearance b. multimarket competition c. competitor analysis d. prisoners’ dilemma ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:01 PM 3/10/2022 8:28 AM

37. "People of the same trade seldom meet together, even for merriment and diversion, but their conversation often ends in a conspiracy against the public." This quote from Adam Smith is referring to which of the following business relationship terms? a. Combination b. Cooperation c. Collusion d. Collaboration ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 38. Which of the following is a theory that studies the interactions between two parties that compete and/or cooperate with each other? a. Predatory pricing theory b. Game theory c. Prisoner's dilemma theory d. Cross-market retaliation theory ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 39. Which of the following occurs when firms engage the same rivals in numerous markets. a. Multimarket competition Copyright Cengage Learning. Powered by Cognero.

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b. Explicit collusion c. Cross-border dumping d. Cross-market retaliation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 40. The price leader’s capacity to do which of the following is defined as having sufficient resources to deter and combat defection? a. Collude b. Imitate c. Punish d. Compete ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 41. Which of the following industrial characteristics makes a collusion difficult but leads to competition? a. Existence of few firms in the industry b. Existence of an industry price leader c. Lack of market commonality d. High barriers of entry ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 42. Which of the following industry characteristics contributes to collusion? a. Existence of an industry price leader b. Existence of many firms in the market c. Low barriers to entry d. Lack of market commonality ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 43. The percentage of total industry sales accounted for by the top firms is called the _____. a. commonality ratio b. collusion index c. concentration ratio d. barriers to entry ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 44. A price leader is a firm that sets which of the following in the industry? Copyright Cengage Learning. Powered by Cognero.

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a. The highest prices and has a low market share b. The lowest prices c. Acceptable prices and has a dominant market share d. The globally consistent price ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 45. Which of the following is defined as the degree of overlap between two rivals’ markets? a. Cross-market retaliation b. Market commonality c. Multimarket competition d. Mutual forbearance ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 46. Mutual forbearance is a type of _____. a. cross-market retaliation b. multimarket competition c. explicit collusion d. tacit collusion ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 47. Mutual forbearance generally stems from a high degree of what? a. Market commonality b. Explicit collusion c. Multimarket competition d. Predatory pricing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 48. Which of the following is an attack on a competitor's other markets if this competitor attacks a firm's original market? a. Cross-market retaliation b. Market commonality c. Multimarket dependency d. Mutual forbearance ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM Copyright Cengage Learning. Powered by Cognero.

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49. Which of the following determines the institutional mix of competition and cooperation that gives rise to the market system and also seeks to balance efficiency and fairness? a. Competition policy b. Antitrust policy c. Mutual forbearance d. Fairness policy ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 50. The American antitrust policy is considered to be _____. a. proincumbent b. proproducer c. procollusion d. proconsumer ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 51. Which of the following is designed to combat monopolies and cartels? a. Competition policy b. Predatory pricing c. Cross-market retaliation d. Antitrust policy ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Strategy STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 52. The act of setting prices below cost to eliminate rivals while intending to raise them in the long run to make up for the initial losses is known as _____. a. dumping b. collusive price setting c. predatory pricing d. counterattack ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Strategy STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 53. Dumping is defined as a(n) _____. a. exporter selling below cost abroad b. company reducing prices after eliminating rivals c. firm engaging its rival in multiple markets d. domestic company selling above cost ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Strategy STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM Copyright Cengage Learning. Powered by Cognero.

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54. Which of the following refers to price setting at a level higher than the competitive level? a. Collusive price setting b. Predatory pricing c. Dumping d. Mark-up pricing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Strategy STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 55. What type of antirust policy would protect established firms that have already invested and nurtured an industry from new entrants? a. Proimitability b. Proincumbent c. Procompetition d. Proconsumer ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 56. Laws that make it illegal for an exporter to sell goods below cost abroad with the intent to raise prices after eliminating local rivals are called what kind of laws? a. Collusion b. Antidumping c. Antitrust d. Anticartel Copyright Cengage Learning. Powered by Cognero.

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ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 57. Which of the following strategies involves selling below cost with a plan to raise prices after eliminating local rivals? a. Dumping b. Dodging c. Collusion d. Forbearing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 58. Which combination of resource similarity and market commonality results in the most intense competition? a. High resource similarity, low market commonality b. Low resource similarity, high market commonality c. Low resource similarity, low market commonality d. High resource similarity, high market commonality ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Apply 11/12/2021 3:01 PM 3/10/2022 8:28 AM

59. Which combination of resource similarity and market commonality results in the least intense competition? a. High resource similarity, low market commonality b. Low resource similarity, high market commonality c. Low resource similarity, low market commonality d. High resource similarity, high market commonality ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 60. Which of the following is defined as the extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm? a. Mutual forbearance b. Game theory c. Resource similarity d. Collusion ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 61. Which of the following sets of words describes the initial set of actions a firm uses to gain competitive advantage and the other firm's response to it? a. Tacit collusion, explicit collusion Copyright Cengage Learning. Powered by Cognero.

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b. Competition, cooperation c. Attack, counterattack d. Cooperation, signaling ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 62. Blue ocean strategy focuses on _____. a. developing new markets b. attacking core markets defended by rivals c. attacking new markets explored by rivals d. leading a price war ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 63. A thrust on rivals’ core markets likely to result in a bloody price war is referred to as _____. a. a red ocean b. a blue ocean c. mutual forbearance d. cross-market retaliation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 64. If a firm chooses not to counterattack because the attacked market is of marginal value, the managers lack what? a. Awareness b. Motivation c. Capabilities d. Signals ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 65. When firms indirectly coordinate actions by signaling their intention to reduce output and maintain prices at certain levels, they are engaged in which of the following? a. Game theory b. Extender strategy c. Explicit collusion d. Tacit collusion ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM Copyright Cengage Learning. Powered by Cognero.

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66. What is signaling? a. A strategy that focuses on developing new markets b. An initial set of actions to gain competitive advantage c. A firm's indirect way of letting other firms know it wants to cooperate d. An intention to raise prices after eliminating local rivals. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 67. What is the rarest outcome in an antidumping case, happening in about 5% of the cases in the US? a. No data comes from abroad and the complainant easily wins. b. Foreign firms provide data, which the complainant argues is false. c. Foreign firms provide data verified to be true, but the complainant argues that the data are not fair. d. The defendant wins the case. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 68. Once rivals have a fairly comprehensive picture of how their rivals compete, what is their next hurdle from a resourcebased perspective? a. Establishing their own value b. Determining how to imitate c. Finding a point of rarity d. Designing a stealth attack ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 69. Mapping along the two dimensions of resource similarity and market commonality can help managers to do what? a. Understand the formal institutions that govern competitive dynamics b. Allocate resources in proportion to the degree of threat presented c. Surprise their rivals with stealth attacks d. Develop points of market sustainability ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:01 PM DATE MODIFIED: 3/10/2022 8:28 AM 70. The ability to raise prices without the fear of losing customers is known as what? a. Capacity to punish b. Market power c. Cross-market retaliation d. Mutual forbearance ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.11-05 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:02 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/10/2022 8:28 AM

71. Explain how interaction differs between tacit collusion and explicit collusion. ANSWER: Collusion is the collective attempt between competing firms to reduce competition. There are two types of collusion. The first type is tacit collusion and is the result of firms indirectly coordinating actions by signaling their intention to reduce output and maintain pricing above competitive levels. Explicit collusion exists when firms directly negotiate output and pricing and divide markets. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Competition, Cooperation, and Collusion QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM 72. Define predatory pricing. Why is it difficult to win a domestic predation case in the United States? ANSWER: Predatory pricing is an attempt to monopolize a market by setting prices below cost and intending to raise prices to cover losses in the long run after eliminating rivals. This is an area of significant contention. First, it is not clear what exactly constitutes “cost.” Second, even when firms are found to be selling below cost, US courts have ruled that if rivals are too numerous to eliminate, one firm cannot recoup the losses incurred by charging low prices by later jacking up prices, so its pricing cannot be labeled “predatory.” This seems to be the case in most industries. These two legal tests have made it extremely difficult to win a domestic predation case in the United States. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM 73. Explain the possible outcomes of an antidumping investigation in the United States. ANSWER: The antidumping investigation in the US can have one of the four following outcomes: a) If no data are forthcoming from abroad, the estimated data provided by the accusing firm become the evidence, and the accusing firm can easily win. b) If foreign firms do provide data, the accusing firm can still argue that these unfair Copyright Cengage Learning. Powered by Cognero.

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foreigners have lied —“There is no way their costs can be so low!” c) Even if the low-cost data are verified, US (and EU) antidumping laws allow the complainant to argue that these data are not “fair.” d) The fourth possible outcome is that the defendant wins the case. But this is rare and happens in only 5% of the antidumping cases in the United States. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions Governing Domestic and International Competition QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM 74. What is resource similarity? How does it affect firm rivalries? ANSWER: Resource similarity is defined as “the extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm.” Firms with a high degree of resource similarity are likely to have similar competitive actions. If we put together resource similarity and market commonality, we can yield a framework of competitor analysis for any pair of rivals. For two firms that have a high degree of resource similarity but a low degree of market commonality (little mutual forbearance), the intensity of rivalry is likely to be the highest. Conversely, if both firms have little resource similarity but a high degree of market commonality, the intensity of their rivalry may be the lowest. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Resources Influencing Competitive Dynamics QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM 75. Explain how firms signal their intention to cooperate with their rivals in order to reduce competitive intensity. ANSWER: Firms signal their intention to cooperate with their rivals in order to reduce competitive intensity in the following ways: a) Firms may enter new markets, not necessarily to challenge incumbents but to seek mutual forbearance by establishing multimarket contact. Thus, MNEs often chase each other, entering one country after another. Airlines that meet in many routes are often less aggressive than airlines that meet in one or a few routes. b) Firms can send an open signal for a truce. When confronting a price war triggered by Copyright Cengage Learning. Powered by Cognero.

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overcapacity, at an airline industry conference, the CEO of Delta told the media that Delta was “continuing with the capacity discipline”—a not-so-subtle code for limiting the number of seats available. The CEO of American Airlines confirmed with reporters, “I think everybody in the industry understands that,” indicating that the signal was received. c) Sometimes firms can send a signal to rivals by enlisting the help of governments. Although it is illegal to hold direct negotiations with rivals on what constitutes “fair” pricing, holding such discussions is legal under the auspices of government investigations. Thus, filing an antidumping petition or suing a rival does not necessarily indicate a totally hostile intent but rather a signal to talk. When Cisco sued Huawei, Cisco was able to legally discuss a number of strategic issues during settlement negotiations, which were mediated by US and Chinese governments. In the end, Cisco dropped its case against Huawei after both firms negotiated a solution. d) Firms can organize strategic alliances with rivals for cost reduction. Although price fixing is illegal, reducing cost through strategic alliance is legal. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM 76. Explain the three drivers of counterattacks. ANSWER: There are three drivers for counterattacks: (1) awareness, (2) motivation, and (3) capability. If an attack is so subtle that rivals are not aware of it, attacker’s objectives are likely to be attained. One interesting idea is the “blue ocean strategy” that avoids attacking core markets defended by rivals. A thrust on rivals’ core markets is very likely to result in a bloody price war—in other words, a “red ocean.” Motivation is also crucial. If the attacked market is of marginal value, managers may decide not to counterattack. Even if an attack is identified, and a firm is motivated to respond, it requires strong capabilities to carry out counterattacks. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Attack, Counterattack, and Signaling QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM Copyright Cengage Learning. Powered by Cognero.

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77. Discuss three implications for savvy managers who need to manage competitive dynamics around the world. ANSWER: First, managers must understand the rules of the game governing competition around the world. Second, managers need to strengthen capabilities that more effectively compete and/or cooperate. In attacks and counterattacks, subtlety, frequency, complexity, and unpredictability are preferred. In cooperation, market similarity and mutual forbearance are helpful. Finally, managers also need to know their opponents by developing capabilities in competitor analysis. Managers need to develop skills and instinct to think like their opponents, who are eager to collect competitive intelligence as well. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-06 - LO: 11-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM 78. Identify and describe two of the arguments that exist against the practice of imposing antidumping restrictions on foreign firms. ANSWER: Two arguments exist against the practice of imposing antidumping restrictions on foreign firms. First, because dumping centers on selling “below cost,” it is often difficult to prove the case, given the ambiguity concerning “cost.” The second argument is that if foreign firms are indeed selling below cost, this is simply a hypercompetitive action. When entering a new market, virtually all firms lose money on Day 1 (and often in Year 1). Until some point when the firm breaks even, it will lose money because it sells below cost. Domestically, cases abound of such dumping, which is deemed perfectly legal. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.11-05 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 8:28 AM

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Chapter 12 - Alliances and Acquisitions 1. Equity-based alliances include co-marketing, research and development, contracts, turnkey products, strategic suppliers, and strategic distributors. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 2. Contractual alliances involve sharing of ownership. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 3. Cross-shareholding is based on financial interest between the firms. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Understand 11/12/2021 3:02 PM 3/10/2022 10:24 AM

4. A joint venture (JV) is a form of equity-based alliance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 5. Licensing is a form of equity-based alliance. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 6. Strategic investments in an equity-based alliance involve one partner investing in another. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 7. Cross-border mergers are more common than acquisitions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 8. Currently, approximately 40% of mergers and acquisitions are cross-border deals. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 9. Antitrust authorities provide easy approvals for both alliances and acquisitions with less intervention. a. True b. False ANSWER: False POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 10. Formal government policies regarding entry mode requirements are generally becoming more conservative. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 11. The informal institution-based view that stresses the cognitive pillar is centered on the internalized taken-for-granted values and beliefs that guide firm behavior. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 12. Acquisition premium is the difference between the acquisition price and the market value of the acquiring firm. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 13. The formal institution-based view that drives mergers and alliances is based on the normative and cognitive pillars. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 14. The “O” in the VRIO framework indicates opportunity. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:02 PM 3/10/2022 10:24 AM

15. A real option enables the investor to buy an option for a small initial investment, hold it until a decision point arrives, and then exercise or abandon the option. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 16. Alliances have emerged as great instruments of real options because of their flexibility to sequentially scale up or scale down investment. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 17. One of the disadvantages of having strategic alliances is potential partner opportunism. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 18. Managers involved in alliances require collaborative relationship skills. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 19. The "imitability" of an alliance is based on the trust and understanding between the partners. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 20. Every alliance or acquisition decision is driven by imitation. a. True b. False ANSWER: False POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 21. Alliances permit firms to sequentially increase their investment should they decide to pursue acquisitions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 22. During the first stage of alliance formation, a firm decides whether growth can be achieved strictly through market transactions, acquisitions, or alliances. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 23. In the context of alliance formation, shared capabilities is one of the driving forces in deciding whether to take a Copyright Cengage Learning. Powered by Cognero.

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contract or an equity approach. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 24. Importance of direct organizational monitoring and control is low in equity-based alliances. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 25. The degree of tacitness is low in nonequity-based alliances. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:02 PM 3/10/2022 10:24 AM

26. Influence of formal institutions is low in both equity- and non-equity-based alliances. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 27. The more tacit the capabilities of a firm in an alliance, the greater the preference for equity involvement. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 28. Equity alliance relationships tend to have less direct control over joint activities on a continual basis than contractual relationships. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 29. One way of combating opportunism in an alliance is to wall off critical capabilities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution and Dissolution of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 30. The alliance dissolution is a four-step process. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution and Dissolution of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 31. The first phase in an alliance dissolution is mediation by third parties. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Evolution and Dissolution of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 32. Equity, learning and experience, relational capabilities, and nationality are four factors that may influence alliance performance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Performance of Alliances QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 33. The three potential motives for alliances are synergistic, hubristic, and managerial motives. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Motives for Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 34. In the context of acquisitions, synergistic motives destroy value while hubris and managerial motives add value. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Motives for Acquisitions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 35. Alliances preclude acquisitions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-08 - LO: 12-08 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 36. In the context of equity-based alliances, which type involves both firms investing in each other? a. Strategic fit b. Acquisition premium c. Strategic investment d. Cross-shareholding ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:02 PM 3/10/2022 10:24 AM

37. Which of the following alliances is an equity-based alliance? a. Strategic investment b. Licensing c. Turnkey projects d. Co-marketing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 38. Which of the following alliances is a contractual alliance? a. Strategic investment b. Franchising c. Cross-shareholding d. Joint venture ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 39. Which of the following is defined as an association between firms that is based on contracts and does not involve the sharing of ownership? a. Joint venture b. Cross-shareholding c. Nonequity based alliance Copyright Cengage Learning. Powered by Cognero.

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d. Strategic investment ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 40. A nonequity-based alliance is also called a _____. a. cross-border alliance b. synergistic alliance c. hubristic alliance d. contractual alliance ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 41. What type of alliance is based on ownership or financial interest between the firms. a. Contractual b. Hubristic c. Equity-based d. Synergistic ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:02 PM 3/10/2022 10:24 AM

42. In which type of equity-based alliance does one firm invest in another? a. Hubristic investment b. Cross-shareholding c. Licensing d. Strategic investment ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 43. The combination of operations and management of two firms to establish a new legal entity is called a(n) _____. a. joint venture b. merger c. contractual alliance d. acquisition ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 44. What type of agreement is defined as the transfer of the control of operations and management from one firm to another with the former becoming a unit of the latter? a. Joint venture Copyright Cengage Learning. Powered by Cognero.

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b. Merger c. Acquisition d. Contractual alliance ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Alliances and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 45. The institution-based view that drives alliances and acquisitions focuses on which of the following types of concern? a. Value b. Rarity c. Learning by doing d. Antitrust ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 46. The set of informal institutions that stresses the cognitive pillar lays emphasis on _____. a. establishing wholly owned subsidiaries b. granting more liberal policies c. copying reputable organizations to ensure a low-cost way to gain legitimacy d. the internalized taken-for-granted values and beliefs that guide firm behavior ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 47. The act of investigating prior to signing contracts is called _____. a. due diligence b. strategic fit c. relational capability d. hubristic motive ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 48. An investment in actual operations as opposed to financial capital is called what? a. Real account b. Hubris c. Real option d. Foreign direct investment ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 49. Which of the following is a disadvantage of alliances? Copyright Cengage Learning. Powered by Cognero.

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a. Lack of learning race b. Partner opportunism c. Value as real options d. Scale up and scale down of investments ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 50. The difference between the acquisition price and the market value of target firms is called acquisition _____. a. equity b. cost c. value d. premium ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 51. In the context of acquisitions, the similarity in cultures, systems, and structures between firms is called _____. a. strategic fit b. acquisition premium c. organizational fit d. relational capability ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 52. Who benefits the most from the acquisition premium valued during an acquisition? a. The shareholders of the acquiring firm b. The shareholders of the target firm c. The opportunistic partner d. The partner who possesses hard-to-imitate capabilities ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 53. Pre-acquisition analysis often focuses on strategic fit, which is the effective matching of what type of strategic capabilities? a. Competitive b. Complementary c. Relational d. Collaborative ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM Copyright Cengage Learning. Powered by Cognero.

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54. The ability to successfully manage interfirm relationships requires what type of capabilities? a. Hubristic b. Synergistic c. Contractual d. Relational ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 55. At which stage in the formation of alliance must a firm decide whether to take a contract or an equity approach? a. Stage 1 b. Stage 2 c. Stage 3 d. Stage 4 ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 56. At Stage One in the formation of an alliance, a firm must _____. a. check the degree of tacitness b. evaluate institutional constraints c. decide whether growth can be achieved through market transactions d. choose between a contract or an equity approach ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Formation of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 57. When considering driving forces, which is the best-case scenario for an equity-based alliance? a. High tacitness and high importance to direct organizational monitoring and control b. Low potential as real options and low influence of formal institutions c. High tacitness and low influence of formal institutions d. Low tacitness and high importance to direct organizational monitoring and control ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 58. When considering driving forces, which is the best-case scenario for a non-equity-based alliance? a. High tacitness and low influence of formal institutions b. Low potential as real options and low influence of formal institutions c. High tacitness and high importance of direct organizational monitoring and control d. Low tacitness and low importance of direct organizational monitoring and control ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Formation of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/10/2022 10:24 AM

59. In a non-equity-based alliance, which of the following should be high for possible upgrading to equity-based relationships? a. Degree of tacitness b. Importance of direct organizational monitoring and control c. Potential as real option d. Influence of formal institutions ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 60. In an alliance, keeping critical skills and technologies not meant to be shared a secret helps prevent _____. a. a proxy fight b. a corporate raider c. opportunism d. a hostile takeover ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution and Dissolution of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 61. Which of the following occurs in the uncoupling stage of an alliance dissolution? a. Last minute salvage b. New relationships c. Reconciliation d. Mediation by third parties ANSWER: a Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution and Dissolution of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 62. Which is one of the four phases in an alliance dissolution? a. Imitation b. Going public c. Strategizing d. Opportunism ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution and Dissolution of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 63. The second phase in an alliance dissolution is _____. a. going public b. imitation c. strategizing d. uncoupling ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Evolution and Dissolution of Alliances QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Analyze 11/12/2021 3:02 PM 3/10/2022 10:24 AM

64. In the context of the motives for acquisition, from a resource-based view, leveraging superior resources is the most important according to what rationale? a. Managerial b. Synergistic c. Hubristic d. Collusive ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Motives for Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 65. With respect to the motives for acquisition, what type of motives add value? a. Collusive b. Hubristic c. Managerial d. Synergistic ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Motives for Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 66. What term refers to overconfidence in one’s capabilities? a. Hubris b. Fringe c. Decoupling Copyright Cengage Learning. Powered by Cognero.

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d. Andon ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Motives for Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Leadership Principles KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 67. Which of the following motives for acquisition addresses the resource-based issue of access to complementary resources? a. Collaborative b. Hubristic c. Managerial d. Synergistic ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Motives for Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 68. In the context of acquisitions, which of the following is a resource-based issue addressed by synergistic motives? a. Herd behavior b. Enhancement of market power and scale economies c. Chasing fads of M&As d. Self-interested actions ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Motives for Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-06 - LO: 12-06 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Strategy Bloom's: Understand 11/12/2021 3:02 PM 3/10/2022 10:24 AM

69. Which of the following stakeholders has the most concern over short-term revenue falling during mergers and acquisitions? a. Investors b. Top management c. Middle management d. Customers ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Performance of Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 70. Which of the following reasons for cross-border acquisition failure is associated with pre-acquisition? a. Failure to address multiple stakeholder groups’ concerns b. Poor organizational fit c. Nationalistic concerns against foreign takeovers (political and media levels) d. Clashes of organizational cultures ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Performance of Acquisitions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.12-07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 71. Elaborate on the institution-based view of alliances and acquisitions. ANSWER: Alliances and acquisitions function within formal legal and regulatory frameworks. Copyright Cengage Learning. Powered by Cognero.

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The impact of these formal institutions can be found along two dimensions: antitrust concerns and entry mode requirements. Many firms establish alliances with competitors. Cooperation between competitors is usually suspected of at least some tacit collusion by antitrust authorities. However, because integration within alliances is usually not as tight as acquisitions, antitrust authorities are more likely to approve alliances than they are acquisitions. Formal requirements on market entry modes affect alliances and acquisitions. Recently, two trends have emerged concerning formal government policies on entry mode requirements. First is the general trend toward more liberal policies in emerging economies. A second characteristic is that in many developed economies, governments still impose considerable requirements, especially when foreign firms acquire domestic assets. The first set of informal institutions centers on collective norms, supported by a normative pillar. One core idea of the institution-based view is that because firms act to enhance or protect their legitimacy, copying other organizations—even without knowing the direct performance benefits of doing so—may be a low-cost way to gain legitimacy. A second set of informal institutions stresses the cognitive pillar, which centers on the internalized taken-for-granted values and beliefs that guide firm behavior. POINTS: 1 DIFFICULTY: Difficulty: Analyze REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 72. One of the merits of alliances is to use them as real options. Elaborate. ANSWER: One important advantage of alliances lies in their value as real options. A real option is an investment in real operations as opposed to financial capital. Two steps are involved: In the first phase, an investor makes a small, initial investment to buy an option, which · leads to the right to make a future investment without being obligated to do so. The investor then holds the option until a decision point arrives in the second phase and · then decides between exercising the option or abandoning it. Alliances have emerged as great instruments of real options because of their flexibility to sequentially scale up or scale down the investment. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:02 PM 3/10/2022 10:24 AM

73. How does the VRIO framework affect acquisitions? ANSWER: Value: On average, the performance of acquiring firms does not improve after acquisitions. Target firms, after being acquired and becoming internal units, often perform worse than when they were independent, stand-alone firms. Only the shareholders of target firms may benefit from the increase in their stock value during the period of the transaction due to the acquisition premium. Rarity: For acquisitions to add value, one or all of the firms involved must have rare and unique skills that enhance the overall strategy. Imitability: While many firms undertake acquisitions, a much smaller number of them have mastered the art of post-acquisition integration. Consequently, firms that excel in integration possess hard-to-imitate capabilities that are advantages in acquisitions. Organization: Fundamentally, whether acquisitions add value is based on how merged firms are organized to take advantage of the benefits while minimizing the costs. Pre-acquisition analysis often focuses on strategic fit. Many firms do not pay adequate attention to organizational fit, which is the similarity in cultures, systems, and structures. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, Alliances, and Acquisitions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 74. Describe the four driving forces that influence the choice of a contract or an equity approach in the formation of alliances. ANSWER: In stage two of the alliance formation, a firm must decide whether to take a contract or an equity approach. The choice between contract and equity is crucial and is influenced by the following four driving forces. Shared capabilities: The more tacit the capabilities, the greater the preference for equity involvement. The most effective way to learn complex processes is through learning by doing. Direct monitoring and control: Equity relationships allow firms to have some direct control over joint activities on a continuing basis, whereas contractual relationships usually do not. In general, firms that fear their intellectual property may be expropriated prefer equity alliances (and a higher level of equity). Real options thinking: Some firms prefer to first establish contractual relationships, which can be viewed as real options for possible upgrading into equity alliances should the interactions turn out to be mutually satisfactory. Institutional constraints: Some governments either require or encourage the formation of JVs between foreign and domestic firms. POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Formation of Alliances QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 75. Describe the stages in the formations of alliances. ANSWER: A three-stage model has been designed to explain the formation of alliances. In stage one, a firm must decide whether growth can be achieved strictly through market transactions, acquisitions, or alliances. To grow by pure market transactions, the firm has to confront competitive challenges independently. This is demanding, even for resource-rich multinationals. In stage two, a firm must decide whether to take a contract or an equity approach. There are four driving forces that influence this decision: shared capabilities, direct monitoring and control, real options thinking, and institutional constraints. In stage three, firms need to choose a specific format that is either equity-based or contractual (non-equity-based), depending on the choice made in stage two. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Formation of Alliances QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 76. Describe how partners in an alliance can combat opportunism. ANSWER: Both sides want to protect themselves in case the other side is opportunistic. It is possible to minimize the threat of opportunism by walling off critical capabilities or swapping critical capabilities. Both sides can contractually agree to wall off critical skills and technologies not meant to be shared. As long as both sides are willing to live with these deals, these relationships can prosper. In the second approach, swapping skills and technologies, both sides agree to not hold critical skills and technologies back and make credible commitments to hold each other as a “hostage.” This may increase the incentives for both partners to cooperate. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Evolution and Dissolution of Alliances Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-04 - LO: 12-004 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 77. Elaborate on the factors that may influence alliance performance. ANSWER: Four factors are identified that may influence alliance performance: equity, learning and experience, nationality, and relational capabilities. The level of equity may be crucial in how an alliance performs. A greater equity stake may signal that a firm is more committed, which is likely to result in higher performance. Since learning is abstract, experience is often used as it is easier to measure; however, experience has no linear impact on performance. There is a limit where increase in experience may no longer enhance performance. Nationality may affect performance. Dissimilarities in national culture may create strains in alliances. International alliances tend to be more problematic than domestic ones. The art of relational capabilities, which are firm-specific and difficult to codify and transfer, may make or break alliances. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Performance of Alliances QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM 78. Discuss a few ways of improving the odds for acquisition success. ANSWER: In the pre-acquisition phase, do not overpay for targets, avoid a bidding war when premiums are too high and, engage in thorough due diligence concerning both strategic and organizational fit In the post-acquisition phase, address the concerns of multiple stakeholders, try to keep the best talents, and be prepared to deal with roadblocks thrown up by people whose jobs and power may be jeopardized. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.12-09 - LO: 12-09 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 10:24 AM

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Chapter 13 - Strategy, Structure, and Innovation in Multinationals 1. Local responsiveness makes local customers and governments happy and helps decrease costs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 2. The integration-responsiveness framework allows managers to deal with the pressures for both global integration and local responsiveness. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 3. Cost pressures often push MNEs to adapt locally. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Understand 11/12/2021 3:02 PM 3/10/2022 3:34 PM

4. The home replication strategy duplicates home country-based competencies in foreign countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 5. A localization strategy is effective when differences among national and regional markets are clear, and pressures for cost reductions are low. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 6. The global standardization strategy lacks local responsiveness. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 7. The global standardization strategy, despite its complexity, is still the best option at being cost effective, locally responsive, and learning-driven. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 8. MNEs that engage in a transnational strategy promote global learning. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 9. Innovations flow only from the host countries to the home country in a transnational strategy. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 10. The transnational strategy is usually the easiest strategy for an MNE to implement and the first one adopted when the firm ventures abroad. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 11. The geographic area structure is appropriate for a transnational strategy. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/10/2022 3:34 PM

12. Many firms phase out the international division structure after their initial stage of overseas expansion. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 13. The international division structure is an organizational structure typically set up when a firm first engages in a home replication strategy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 14. The global product division structure organizes the MNE according to different geographic areas. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:02 PM 3/10/2022 3:34 PM

15. One of the disadvantages of the geographic area structure is that the country and regional managers are not given sufficient voice relative to the heads of the domestic divisions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 16. A global matrix structure alleviates the disadvantages associated with both geographic area and global product division structures. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 17. The relationship between strategy and structure is reciprocal. a. True b. False ANSWER: True POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 18. Externally, MNEs are subject to the formal institutional frameworks erected by various home-country and hostcountry governments. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How Institutions and Resources Affect Multinational Strategies, Structures, and Innovation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 19. Management of MNE structure, learning, and innovation needs to take into account VRIO. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How Institutions and Resources Affect Multinational Strategies, Structures, and Innovation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM Copyright Cengage Learning. Powered by Cognero.

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20. The terms knowledge management and information management can be used interchangeably. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 21. Explicit knowledge is codifiable. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 22. Learning aquatic zumba is an example of tacit knowledge. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technologies Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Apply 11/12/2021 3:02 PM 3/10/2022 3:34 PM

23. From a resource-based view, explicit knowledge is strategically more important than tacit knowledge. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 24. In a transnational strategy, the flow of knowledge is unidirectional. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 25. Flow of knowledge is limited in the home replication strategy. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 26. When MNEs adopt a localization strategy, the interdependence on knowledge management is high. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 27. In MNEs adopting the home replication strategy, knowledge is developed at the center and transferred to subsidiaries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 28. Knowledge retention faces the common problem of absorptive capacity. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 29. Knowledge inflow faces the common problem of “Not invented here” syndrome. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 30. Absorptive capacity refers to the informal benefits that individuals and organizations derive from their social structures and networks. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 31. Accurately measuring the inflows and outflows of tacit and explicit knowledge is process oriented and easy to achieve. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 32. Social capital is the ability to recognize the value of new information, assimilate it, and apply it. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 33. Informal social capital hinders knowledge management. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:02 PM 3/10/2022 3:34 PM

34. Subsidiary initiatives are new opportunities pursued by a subsidiary based on headquarters’ demands. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 35. The global account structure and solutions-based structure are two of the primary customer-focused dimensions of an MNE. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 36. Which are the two primary pressures MNEs confront? a. Ethics and governance b. Cost reductions and local responsiveness c. Liability of foreignness and investment risk d. Ethics and local responsiveness ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 37. When an MNE is locally responsive, _____. a. the local government’s involvement reduces b. regulations are loosened c. innovations are limited d. costs increase ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 38. Which of the following strategies is often known as “international strategy”? a. Localization b. Global standardization c. Transnational d. Home replication ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM Copyright Cengage Learning. Powered by Cognero.

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39. Which of the following is a disadvantage of the home replication strategy? a. It lacks local responsiveness. b. It is organizationally complex and difficult to implement. c. It focuses too much on the foreign country. d. It has higher costs due to duplication of efforts in multiple countries. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 40. Which strategy is best for environments where there are clear differences among national and regional markets and there is a low pressure for cost reduction? a. Home replication b. Localization c. Global standardization d. International ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 41. Which of the following strategies is usually the first one adopted when firms venture abroad? a. Global b. Home replication c. Localization d. Transnational ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 42. Which of the following strategies is an extension of the home replication strategy? a. Global b. Transnational c. Localization d. Export ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 43. Which strategy is also known as a multidomestic strategy? a. Home replication b. Transnational c. Global d. Localization ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/10/2022 3:34 PM

44. Which strategy focuses on development and distribution of standardized products worldwide to reap maximum benefits from low-cost advantages? a. Transnational b. Localization c. Home replication d. Global standardization ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 45. Which strategy focuses on a number of foreign countries/regions, each of which is regarded as a standalone market worthy of significant attention and adaptation? a. Global b. Home replication c. Localization d. Transnational ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 46. MNEs may designate centers of excellence when adopting which of the following strategies? a. Global b. Home replication c. Localization d. Transnational Copyright Cengage Learning. Powered by Cognero.

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ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 47. Which strategy is organizationally complex and most difficult to implement? a. Localization b. Transnational c. Home replication d. Global standardization ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 48. Which strategy endeavors to be simultaneously cost efficient, locally responsive, and learning-driven around the world? a. Home replication b. Transnational c. Global d. Localization ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Analyze 11/12/2021 3:02 PM 3/10/2022 3:34 PM

49. Which structure is appropriate for a localization strategy? a. International division b. Global product division c. Geographic area d. Global matrix ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 50. Which structure allows for consolidation on a worldwide or regional basis and reduces inefficient duplication in multiple countries? a. Geographic area b. Global matrix c. International division d. Global product division ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 51. Which structure is the opposite of the geographic area structure? a. International division b. Global matrix Copyright Cengage Learning. Powered by Cognero.

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c. Multidomestic d. Global product division ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 52. The global product division structure supports which of the following strategies? a. Transnational b. Global matrix c. Multidomestic d. Global standardization ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 53. In theory, a global matrix structure supports the goals of which of the following strategies? a. Transnational b. Localization c. Global standardization d. Home replication ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 54. The coordination of responsibilities between product divisions and geographic areas is the hallmark of which of the following strategies? a. Global product division b. Geographic area c. Global matrix d. International division ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 55. What type of innovation uses purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation? a. Collaborative b. Open c. Closed d. Absorptive ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM Copyright Cengage Learning. Powered by Cognero.

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56. Which of the following is an example of tacit knowledge? a. Performing surgery b. A product manual c. HR policies d. Writing an e-mail ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 57. Which of the following strategies has the lowest interdependence on knowledge management? a. Global standardization b. Transnational c. Localization d. Home replication ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 58. In which of the following strategies is knowledge mostly developed and retained at the center and key locations? a. Global standardization b. Transnational c. Localization d. Home replication ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 59. Which of the following statements with respect to differences in knowledge management among the four types of MNEs is true? a. Interdependence on knowledge management is moderate in a transnational strategy. b. The role of foreign subsidiaries in a localization strategy is to adapt and leverage parent company competencies. c. There is extensive flow of knowledge and people in multiple directions in a transnational strategy. d. Knowledge is developed and retained within each subsidiary in a home replication strategy. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 60. Which of the following may be a hindrance to successful knowledge management? a. Bonuses tied to measurable knowledge outflows and inflows b. Investment in codifying tacit knowledge c. Facilitation of informal social capital d. Use of single-subsidiary-based incentives ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/10/2022 3:34 PM

61. Which element of knowledge management faces the common problem of “Not invented here” syndrome? a. Knowledge inflow b. Knowledge transmission c. Knowledge acquisition d. Knowledge outflow ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 62. Which element of knowledge management faces the common problem of employee turnover? a. Knowledge inflow b. Knowledge transmission c. Knowledge outflow d. Knowledge retention ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 63. Which element of knowledge management faces the common problem of absorptive capacity? a. Knowledge inflow b. Knowledge transmission c. Knowledge outflow d. Knowledge retention ANSWER: a POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 64. Knowledge outflow, one of the knowledge management elements, faces the common problem of _____. a. inappropriate channels b. absorptive capacity c. “How does it help me?” syndrome d. “Not invented here” syndrome ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 65. Knowledge acquisition, one of the knowledge management elements, faces the common problem of _____. a. “How does it help me? ” syndrome b. failure to share and integrate external knowledge c. “Not invented here ” syndrome d. absorptive capacity ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:02 PM 3/10/2022 3:34 PM

66. Which of the following is defined as the informal interpersonal relationships among managers of different units that may greatly facilitate intersubsidiary cooperation among various units? a. Social capital b. Absorptive capacity c. Micro-macro link d. Subsidiary initiative ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 67. Which of the following is defined as the ability to recognize the value of new information, assimilate it, and apply it? a. Social capital b. Micro-macro link c. Absorptive capacity d. Global mandate ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 68. Which of the following is defined as the informal benefits individuals and organizations derive from their networks? a. Social capital b. Micro-macro link c. Absorptive capacity Copyright Cengage Learning. Powered by Cognero.

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d. Global mandate ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 69. In the context of the customer-focused dimension of a global matrix, which of the following structures supplies customers in a coordinated and consistent way across various countries? a. Solutions-based b. Open innovation c. Global account d. Social capital ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.13-04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 70. In the context of the customer-focused dimension of a global matrix, which of the following structures allows a provider to sell whatever combination of goods and services that customers prefer, including rivals’ offerings? a. Open innovation b. Solutions-based c. Global account d. Social capital ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.13-04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 71. Summarize the advantages and disadvantages of the home replication strategy. ANSWER: The home replication strategy emphasizes the duplication of home-country-based competencies (production scales, distribution efficiencies, and brand power) in foreign countries. It is relatively easy to implement and usually the first one adopted when firms venture abroad. However, this strategy lacks local responsiveness and may result in foreign customer alienation. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 72. Explain the advantages and disadvantages of the global standardization strategy. ANSWER: The global standardization strategy seeks to standardize products worldwide to reap the maximum benefits from low-cost advantage. MNEs pursuing this strategy are not limited to basing their major operations from a home base. MNEs may designate centers of excellence, with the goal that important capabilities be leveraged across subsidiaries. The strategy lacks local responsiveness and adopts excessive centralized control. This strategy makes great sense in industries where pressures for cost reductions are paramount. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM Copyright Cengage Learning. Powered by Cognero.

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73. Explain the reciprocal relationship between multinational strategy and structure. ANSWER: The relationship between strategy and structure is reciprocal. Usually strategy drives structure. The fit between strategy and structure is crucial. A misfit, such as combining a global standardization strategy with a geographic area structure, may have grave consequences. Structure also drives strategy. Neither strategy nor structure is static. It is often necessary to change strategy, structure, or both. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 74. Summarize the advantages and disadvantages of the transnational strategy. ANSWER: The transnational strategy endeavors to be simultaneously cost efficient, locally responsive, and learning-driven around the world. MNEs that engage in a transnational strategy promote global learning and diffusion of innovations in multiple ways. Innovations not only flow from the home country to host countries, but also flow from host countries to the home country and flow among subsidiaries in multiple host countries. On the disadvantage side, a transnational strategy is organizationally complex and difficult to implement. The large amount of knowledge sharing and coordination may slow down decision making. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 75. What are centers of excellence? ANSWER: In a number of countries, an MNE pursuing a global standardization strategy may designate centers of excellence, which are subsidiaries explicitly recognized as a source of important capabilities, with the intention that these capabilities be leveraged by and/or disseminated to other subsidiaries. Centers of excellence are often given a worldwide (or global) mandate—a charter to be responsible for one MNE function throughout the world. POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 76. Briefly explain which of the four organizational structures is appropriate for each of the MNE strategic choices. ANSWER: The four organizational structures are international division, geographic area, global product division, and global matrix. International division is typically used when firms initially expand abroad, often engaging in a home replication strategy. Although this structure is intuitively appealing, it often leads to two problems: foreign subsidiary managers, whose input is channeled through the international division, are not given sufficient voice relative to the heads of domestic divisions; by design, the international division serves as a silo whose activities are not coordinated with the rest of the firm, which is focusing on domestic activities. The geographic area structure organizes the MNE according to different geographic areas (countries and regions). It is appropriate for a localization strategy. Each area is largely standalone. But the strengths and weaknesses of this structure lie in its local responsiveness. The global product division structure supports the global standardization strategy by assigning global responsibilities to each product division. This structure treats each product division as a stand-alone entity with full worldwide responsibilities. This structure is highly responsive to pressures for cost efficiencies, because it allows for consolidation on a worldwide (or at least regional) basis and reduces inefficient duplication in multiple countries. A global matrix alleviates the disadvantages associated with both geographic area and global product division structures, especially for MNEs adopting a transnational strategy. In practice, this structure is often difficult to deliver. The matrix structure may add layers of management, slow down decision speed, and increase costs while not showing significant performance improvement. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Strategies and Structures QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM Copyright Cengage Learning. Powered by Cognero.

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77. Elaborate on the differences in knowledge management among the four types of MNEs. ANSWER: Differences in knowledge management among the four types of MNEs fundamentally stem from the interdependence between the headquarters and subsidiaries, and among various subsidiaries. In MNEs pursuing a home replication strategy, such interdependence is moderate, and the role of subsidiaries is largely to adapt and leverage parent-company competencies. Thus, knowledge on new products and technologies is mostly developed at the center and flown to subsidiaries, representing the traditional one-way flow. When MNEs adopt a localization strategy, the interdependence is low. Knowledge management centers on developing insights that can best serve local markets. In MNEs pursuing a global standardization strategy, the interdependence is increased. Knowledge is developed and retained at the headquarters and a few centers of excellence. Consequently, knowledge and people typically flow from headquarters and these centers to other subsidiaries. Transnational MNEs have a high degree of interdependence with extensive and bi-directional flows of knowledge. In transnational MNEs, knowledge flows among dispersed subsidiaries. Each subsidiary not only develops locally relevant knowledge but also aspires to contribute knowledge to benefit the MNE as a whole. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM 78. MNEs do face a few issues with respect to knowledge management. Elaborate on these issues and the possible ways to combat them. ANSWER: Institutionally, how MNEs employ the formal and informal rules of the game has a significant bearing behind the success or failure of knowledge management. A number of informal rules can become problems in knowledge management. In knowledge acquisition, many MNEs prefer to invent everything internally. However, for large firms, R&D actually offers diminishing returns. Consequently, open innovation is emerging, which is the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation. In knowledge retention, the usual problems are employee turnover and knowledge leakage. In knowledge outflow, there is the “How does it help me?” syndrome. Specifically, managers of the source subsidiary may view the outbound sharing of knowledge as a diversion of scarce time and resources. Further, some managers may believe that monopolizing certain knowledge may be viewed as the currency to acquire and retain power within the MNE. Even when certain subsidiaries are willing to share knowledge, inappropriate transmission channels may still torpedo effective sharing. Global virtual teams using videoconferencing have to confront tremendous communication and relationship barriers. Recipient subsidiaries may block successful knowledge inflows. The “not invented here” syndrome creates a resistance to ideas from other units. Additionally, recipients may have Copyright Cengage Learning. Powered by Cognero.

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limited absorptive capacity. As solutions to combat these problems, headquarters can tie bonuses to measurable knowledge outflows and inflows; use high-powered corporate-based or unit-based incentives (as opposed to individual-based and single-subsidiary-based incentives); invest in codifying tacit knowledge. Instead of using traditional formal command-and-control structures that are often ineffective, knowledge management is best facilitated by informal social capital. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Worldwide Learning, Innovation, and Remember Management QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:02 PM DATE MODIFIED: 3/10/2022 3:34 PM

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Chapter 14 - Marketing and Supply Chain Management 1. The four Ps of marketing are: product, price, positioning, and place. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 2. Although the word “product” originally referred to a physical product, its modern use has included services. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 3. Within a single product category, product attributes are standardized. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:03 PM 3/16/2022 4:03 PM

4. Localization is appealing, but expensive. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 5. In the context of segmentation based on customer categories, global citizens are always skeptical about whether global brands deliver high quality goods. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 6. In the context of segmentation based on customer categories, global dreamers are most likely to lead anti-globalization demonstrations. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 7. Firms dealing with global agnostics can leverage global brands and their relatively more standardized products and services. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 8. MNEs dealing with global dreamers can market localized products and services under local brands. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 9. According to the economic theory of supply and demand, a drop in price generates stronger demand. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 10. Price elasticity refers to the changes in demand when price changes. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 11. Total cost of ownership is often explicitly evaluated prior to purchase decisions in a business-to-business situation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM Copyright Cengage Learning. Powered by Cognero.

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12. Standardized promotion helps project a globally consistent message, but is expensive. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 13. In international marketing, the country-of-origin effect refers to the positive or negative perception of firms and products from a certain country. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 14. As one of the Ps in the marketing mix, place is also often referred to as the distribution channel. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From Distribution Channel to Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:03 PM 3/16/2022 4:03 PM

15. The term “supply chain” is almost synonymous with “value chain,” encompassing both inbound and outbound logistics. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: From Distribution Channel to Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 16. The triple As underpinning supply chain management are agility, adaptability, and aggregation. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 17. Agility focuses on flexibility that can overcome short-term fluctuation in the supply chain. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 18. Enhancing agility requires firms to continuously monitor major geopolitical trends. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 19. Agility refers to the ability to change supply chain configurations in response to longer-term changes in the environment and technology. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 20. Adaptability in supply chain management refers to the ability to quickly react to unexpected shifts in supply and demand. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 21. A supply chain can't be changed after it is established. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 22. Alignment refers to the balancing of interests of various players involved in the supply chain. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM Copyright Cengage Learning. Powered by Cognero.

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23. In the context of achieving alignment, if a recognized leader in a supply chain exercises power, it facilitates legitimacy and efficiency of the whole supply chain. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 24. In the context of achieving alignment, supply chain members of less standing exercise greater bargaining power. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 25. As a key element in achieving alignment, trust stems from perceived fairness and justice from all supply chain members. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Strategy Bloom's: Analyze 11/12/2021 3:03 PM 3/16/2022 4:03 PM

26. Introducing third-party logistics (3PL) providers may more effectively align the interests in the supply chain. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 27. In a broad sense, every supply chain is a strategic alliance involving a variety of players, each of which is a profitmaximizing, stand-alone firm. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 28. Marketing and supply chain management activities can be evaluated based on the VRIO criteria. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: How Institutions and Resources Affect Marketing and Supply Chain Management Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 29. Supporters of a sharing economy suggest that it will give providers lower prices and better value. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 30. Critics of a sharing economy argue that it will give providers higher income. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 31. Market orientation is the effort to establish, maintain, and enhance relationships with customers. a. True b. False ANSWER: False Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 32. In the context of market orientation vs. relationship orientation, relationship orientation capabilities contribute more toward performance. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 33. In the context of market orientation vs. relationship orientation, for truly outstanding performance, relationships are necessary but not sufficient. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM Copyright Cengage Learning. Powered by Cognero.

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34. According to the resource-based view, holding institutions constant, firms that develop the best capabilities in marketing and supply chain management will emerge as winners. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-06 - LO: 14-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 35. Ethnocentrism should be encouraged in international marketing. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-06 - LO: 14-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 36. Which of the following is defined as is the flow of products, services, finances, and information that passes through a set of entities from a source to the customer? a. Logistic engineering b. Market orientation c. Supply chain d. Product chain ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 37. Which of the following is one of the four Ps in the marketing mix? a. Perfection b. Promotion c. Power d. Perception ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 38. Which of the following divides consumers based on purchasing behavior? a. Selective distribution b. Sorting c. Market segmentation d. Market orientation ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 39. The category of customers who are in favor of buying global brands that signal prestige and cachet are called _____. Copyright Cengage Learning. Powered by Cognero.

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a. global agnostics b. global dreamers c. antiglobals d. global citizens ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 40. The category of customers who may not be able to afford, but nevertheless admire, global brands are called _____. a. global agnostics b. global dreamers c. antiglobals d. global citizens ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 41. The category of customers who are skeptical about whether global brands deliver higher quality goods are called _____. a. global citizens b. global dreamers c. antiglobals d. global agnostics ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 42. Which of the following refers to the expenditures a customer is willing to pay for a product? a. Total cost b. Price c. Total cost of ownership d. Price elasticity ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 43. Which of the following terms is used to describe how demand changes when price changes? a. Price lining b. Price fixing c. Price elasticity d. Price discrimination ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM Copyright Cengage Learning. Powered by Cognero.

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44. Which of the following refers to the cost needed to own a product, consisting of initial purchase cost and follow-up maintenance/service cost? a. Total cost of ownership b. Price c. Fixed cost d. Cost-plus pricing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 45. Which of the following terms refers to the positive or negative perception of firms and products from a certain country? a. Ethnocentrism b. VRIO effect c. Market orientation d. Country-of-origin effect ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 46. Which of the following category of customers are most likely to lead anti-globalization demonstrations? a. Global dreamers b. Global citizens c. Antiglobals d. Global agnostics ANSWER: d POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 47. For which of the following customer categories are firms advised to leverage the global brands and their relatively more standardized products and services? a. Global dreamers and antiglobals b. Global citizens and global dreamers c. Antiglobals and global agnostics d. Global agnostics and global citizens ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 48. Which of the following refers to all the communications that marketers insert into the marketplace? a. Purchasing specification b. Product orientation c. Promotion d. Prospecting ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:03 PM 3/16/2022 4:03 PM

49. For which of the following categories of customers can MNEs market localized products and services under local brands? a. Global dreamers b. Global activists c. Global citizens d. Global agnostics ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 50. Which of the following four Ps of marketing includes TV, radio, print, and online advertising, as well as coupons, direct mail, billboards, direct marketing, and public relations? a. Prospecting b. Promotion c. Pointcasting d. Positioning ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 51. Which of the following terms refers to the set of firms that facilitate the movement of goods from producers to consumers? a. Stock keeping unit b. Production channel Copyright Cengage Learning. Powered by Cognero.

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c. Distribution channel d. CIF ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From Distribution Channel to Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 52. Technically, place in the four Ps of marketing is also often referred to as the _____. a. production channel b. vertical channel c. distribution channel d. traditional channel ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From Distribution Channel to Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 53. Which of the following four Ps in the marketing mix includes the online marketplace? a. Place b. Promotion c. Pointcasting d. Positioning ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: From Distribution Channel to Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.14-02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 54. Which of the following is one of the triple As in supply chain management? a. Accountability b. Accessibility c. Applicability d. Alignment ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 55. Which of the triple As refers to the ability to quickly react to unexpected shifts in supply and demand? a. Aggregation b. Adaptability c. Alignment d. Agility ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 56. Which of the triple As focuses on flexibility that can overcome short-term fluctuation in the supply chain? a. Aggregation Copyright Cengage Learning. Powered by Cognero.

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b. Agility c. Alignment d. Adaptability ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 57. Which of the triple As refers to the ability to change supply chain configurations in response to longer-term changes in the environment and technology? a. Aggregation b. Agility c. Alignment d. Adaptability ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 58. In terms of supply chain management, what type of firms typically source from abroad and market products domestically? a. Export assembler b. Local producer c. Indigenous exporter d. Import assembler ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 59. In terms of the supply chain, alignment is best defined as _____. a. the combining of interests of various players involved in the supply chain b. the ability to change supply chain configurations in response to long-term changes in the environment and technology c. the ability to quickly react to unexpected shifts in supply and demand d. the way to identify consumers who differ from others in purchasing behavior ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 60. Which of the triple As requires firms to continuously monitor major geopolitical, social, and technological trends in the world, and reconfigure the supply chain accordingly? a. Agility b. Adaptability c. Alignment d. Aggregation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/16/2022 4:03 PM

61. Which of the following is a key element to achieving alignment in the supply chain? a. Power b. Standardization c. Localization d. Productivity ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 62. The two key elements to achieve alignment are power and _____. a. agility b. promotion c. aggregation d. trust ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 63. Which of the following refers to a neutral, third-party intermediary in the supply chain that provides logistics and other support services? a. LCL b. FOB c. 3PL d. PPB ANSWER: c Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 64. Supporters believe that a sharing economy will provide which of the following? a. Economies with lower taxes b. Consumers with better value c. Economies with lower employment d. Consumers with higher income ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 65. Which of the following is an argument of critics of a sharing economy? a. The supply chain is lengthened and difficult to manage. b. It limits the agility and adaptability of a firm. c. Many workers suffer from meager pay and little (or no) benefits. d. It relies too heavily on third-party logistics (3PL) providers. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:03 PM 3/16/2022 4:03 PM

66. Critics of a sharing economy say that it can more appropriately be called what type of economy? a. Promotion b. Servant c. Selfish d. Selfless ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 67. In supply chain management, what type of orientation is defined as a focus to establish, maintain, and enhance associations with customers? a. Market b. Societal c. Relationship d. Sales ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 68. What type of orientation refers to a philosophy or way of thinking that places the highest priority on the creation of superior customer value in the marketplace? a. Market b. Societal Copyright Cengage Learning. Powered by Cognero.

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c. Relationship d. Sales ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 69. Market orientation seeks to place the highest priority on which of the following? a. Coordinating operations b. Supply chain efficiency c. Relationships with customers d. Creation of superior customer value ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 70. Which of the following must be practiced to avoid blunders in international marketing? a. Encourage ethnocentrism b. Encourage the pushy salesman approach c. Be sensitive to nationalistic feelings of local consumers, employees, and governments d. Save back-translation cost ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.14-06 - LO: 14-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 71. Elaborate on the major concerns faced by MNEs doing business around the world. ANSWER: For multinational enterprises (MNEs) doing business around the world, a leading concern is standardization versus localization. Localization is natural. It is appealing, but expensive. Marketers thus face a dilemma: while one size does not fit all, most firms cannot afford to create products and services for just one group of customers. Thus, how much to standardize and how much to localize remain challenges. In deciding whether to market global brands or local brands in their portfolio, MNEs have to consider market segmentation. There are limitless ways of segmenting the market, but the main concern for international marketers is “How does one generalize from a wide variety of market segmentation in different countries to generate products that can cater to a few of these segments around the world?” One globally useful way of segmentation is to divide consumers in four categories: global citizens, global dreamers, antiglobals, and global agnostics. This helps MNEs and locals better craft their products and services. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 72. Elaborate on the various aspects marketers have to consider to enhance promotion. ANSWER: Promotion refers to all the communications that marketers insert into the marketplace. Marketers face a strategic choice of whether to standardize or localize promotional efforts. Standardized promotion not only projects a globally consistent message but can also save a lot of money. One large campaign may be more cost-effective than 100 smaller campaigns. However, there is a limit to the effectiveness of standardized promotion. Marketers also have to make a decision about whether to enhance or downplay the importance of the country-of-origin effect, which refers to the positive or negative perception of firms and products from a certain country. In recent times, marketers are also faced with the challenge of choosing between online versus offline (traditional) advertising. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Essay Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 73. Explain the globally useful way of segmenting according to customer categorization. ANSWER: Market segmentation identifies segments of consumers who differ from others in purchasing behavior. Markets can be segmented in limitless ways, such as males versus females, urban dwellers versus rural residents, and Africans versus Latin Americans. One globally useful way of segmentation is to divide consumers in four categories: ∙ Global citizens: favor buying global brands that signal prestige and cachet. ∙ Global dreamers: may not be able to afford global brands but admire them. ∙ Antiglobals: skeptical about whether global brands deliver higher-quality goods. ∙ Global agnostics: most likely to lead anti-globalization demonstrations. For the first two categories, global citizens and global dreamers, firms are advised to leverage the global brands and their relatively more standardized products and services. Considering antiglobals and global agnostics, MNEs can market localized products and services under local brands. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 74. Explain the four Ps of marketing. ANSWER: The four Ps collectively consist of the marketing mix are product, price, promotion, and place. Product refers to the offerings that customers purchase. Product attributes vary tremendously. For MNEs doing business around the world, leading concerns include standardization versus localization, and deciding whether to market global brands or local brands in their portfolio. The key to the second concern is market segmentation. Price refers to the expenditures that customers are willing to pay for a product. Since most customers are price sensitive, there is price elasticity which means, how demand changes when price changes. In addition to the price at the point of purchase, another dimension of price is the total cost of ownership. In international marketing, it is important to note that aggressively low prices abroad may lead to accusations of dumping, thus triggering protectionist measures. Promotion refers to all the communications that marketers insert into the marketplace. It Copyright Cengage Learning. Powered by Cognero.

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includes TV, radio, print, and online advertising, as well as coupons, direct mail, billboards, direct marketing (personal selling), and public relations. Marketers face a strategic choice of whether to standardize or localize promotional efforts. Standardized promotions not only project a globally consistent message, but can also save a lot of money. However, there is a limit to the effectiveness of standardized promotion. Place refers to the location where products and services are provided (which now includes the online marketplace). Technically, place is also often referred to as the distribution channel—the set of firms that facilitate the movement of goods from producers to consumers. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Three of the Four Ps in Marketing QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 75. Elaborate on the triple As in supply chain management. ANSWER: The triple As are agility, adaptability, and alignment. Agility is a firm's ability to quickly react to unexpected shifts in supply and demand. It focuses on flexibility that can overcome short-term fluctuation in the supply chain. Adaptability refers to the ability of a firm to change supply chain configurations in response to long-term changes in the environment and technology. This requires firms to continuously monitor major geopolitical, social, and technological trends in the world, make sense of them, and reconfigure the supply chain accordingly. Alignment refers to the alignment of interests of various players involved in the supply chain. There are two key elements to achieve alignment: power and trust. Not all players in a supply chain are equal, and more powerful players naturally exercise greater bargaining power. Trust stems from perceived fairness and justice from all supply chain members. While supply chains have become ever more complex and extended, modern practices have made all parties more vulnerable if the weakest link breaks down. Therefore, it is essential to invest in trust-building mechanisms in order to foster more collaboration. Sometimes, introducing third-party logistics (3PL) providers may more effectively align the interests in the supply chain. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Triple As in Supply Chain Management QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:03 PM 3/16/2022 4:03 PM

76. Discuss how institutions and resources affect marketing and supply chain management. ANSWER: As an important form of institutions, formal rules of the game have a significant impact. Most countries impose restrictions, ranging from taboos in advertising to constraints on the equity level held by foreign retailers and 3PL providers. Informal rules also place significant constraints on marketing and supply chain management. In marketing, most of the blunders happen due to firms’ failure to appreciate the deep underlying differences in cultures, languages, and norms. Marketing and supply chain management activities can be evaluated based on the VRIO criteria. First, managers need to ascertain if the activities add value. Second, managers need to assess the rarity of marketing and supply chain activities. Third, managers need to assess how likely it is for rivals and partners to imitate. Finally, managers need to ascertain if the firm is organizationally ready to accomplish the objectives. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: How Institutions and Resources Affect Marketing and Supply Chain Management QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM 77. Briefly discuss market orientation versus relationship orientation that concern marketing and supply chain management. ANSWER: Market orientation places the highest priority on the creation of superior customer value in the marketplace. A market-oriented firm genuinely listens to feedback and allocates resources accordingly to meet customer expectations. Relationship orientation focuses on establishing, maintaining, and enhancing relationships with customers. Marketers have heavily debated whether a market orientation or a relationship orientation is more effective in global markets. The key is how firms benefit from market or relationship orientation differently around the world. According to researchers, relationship-oriented assets do indeed add value; however, for truly outstanding performance, relationships are necessary but not sufficient by themselves. Market-oriented capabilities contribute more to performance. Viewed collectively, findings support the institution-based view that market orientation functions more effectively in a market economy. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-05 - LO: 14-05 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Creation of Value Bloom's: Analyze 11/12/2021 3:03 PM 3/16/2022 4:03 PM

78. List a few do’s and don’ts to avoid blunders in international marketing. ANSWER: In international marketing, managers need to ensure the following do’s and don’ts to avoid costly and embarrassing blunders. Do’s • Be sensitive to nationalistic feelings of local consumers, employees, and governments. • Pay attention to details and nuances, especially those related to cultures, values, and norms. • Avoid the pushy salesman approach. • Build relationships. Don’ts • Don't be overconfident about the potential of your products or services. • Don't cut corners and save back-translation cost. • Don't use jokes in international advertising. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.14-06 - LO: 14-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:03 PM

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Chapter 15 - Human Resource Management 1. The term "HRM" indicates that people are key resources of the firm to be actively managed and developed. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 2. Staffing, training and development, compensation and performance appraisal, and labor relations are main areas of HRM. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 3. The majority of an MNE’s employees are typically parent-country nationals. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: HRM Bloom's: Remember 11/12/2021 3:03 PM 3/16/2022 4:19 PM

4. MNEs hire only host-country nationals to work at a local subsidiary. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 5. The staffing choices in an MNE are always random. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 6. The advantage of hiring employees who are parent-country nationals is that they bridge the gap between headquarters and the subsidiary. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 7. The advantage of hiring employees who are host-country nationals is that it facilitates control by headquarters. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 8. An MNE with transnational strategy typically staffs host-country nationals. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 9. PCNs generally stay in their positions longer and thus provide more continuity of management. a. True b. False ANSWER: False Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 10. An advantage to TCNs is that they allow headquarters greater control and coordination. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 11. Global standardization or transnational strategies often necessitate an ethnocentric approach, resulting in a mix of HCNs, PCNs, and TCNs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM Copyright Cengage Learning. Powered by Cognero.

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12. Expatriates act as daily managers to run operations and to build local capabilities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 13. In general, the failure rates of expatriates are very low. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 14. An ethnocentric approach emphasizes the norms and practices of the parent company and the parent country of the MNE. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:03 PM 3/16/2022 4:19 PM

15. Middle-aged expatriates are the most expensive, because the employer often has to provide a heavy allowance for children’s education. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 16. A psychological contract is a written contract signed by the employer and the expatriation candidate. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 17. Ethnocentrism continues to characterize many MNEs: knowledge transfer is typically one way—from headquarters to subsidiaries via expatriates. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 18. Returning expatriates may experience a loss of status. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 19. Repatriation, if not managed well, can be traumatic for expatriates and their families, but not for the firm. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 20. The best way to reduce expatriate turnover is a career development plan. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 21. To reach the top at most MNEs today, international experience is considered optional. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 22. Performance appraisals are given only when an employee is not performing well. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 23. The going rate approach is the most widely used method in expatriate compensation. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 24. Low-level host-country nationals, especially those in developing countries, have little bargaining power when negotiating compensation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 25. MNEs eventually replace even top-level expatriates with TCNs, in order to save cost. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:03 PM 3/16/2022 4:19 PM

26. The initial compensation of an expatriate is determined by performance appraisal. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 27. In developed economies, a firm's key concern is to enhance competitiveness to fight off low-cost rivals from emerging economies. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Labor Relations QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 28. In the United States, unionized employees earn less than non-unionized employees. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Labor Relations QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.15-04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 29. The leading US union, the AFL-CIO, expanded into Mexico in the 1990s. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Labor Relations QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 30. European MNEs are more likely to appoint PCNs to lead subsidiaries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Human Resource Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 31. Externally, HRM is shaped by national and industry contexts. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 32. The “best fit” school argues that a firm needs to search for the best external and internal fit. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 33. Proponents of the “best practices” school argue that firms should adopt “best practices” with respect to certain contexts. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 34. Most inpatriates are expected to eventually return to their home country to replace expatriates. a. True Copyright Cengage Learning. Powered by Cognero.

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b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 35. Inpatriation is sometimes used for filling skill shortages at headquarters. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 36. HRM activities associated with hiring employees and filling positions are referred to as what? a. Rostering b. Sourcing c. Staffing d. Benchmarking ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:03 PM 3/16/2022 4:19 PM

37. Which of the following types of employees in MNEs are often known as locals? a. Multinationals b. Third-country nationals c. Parent-country nationals d. Host-country nationals ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 38. The process of selecting, managing, and motivating non-native employees to work abroad is called _____. a. nepotism b. onboarding c. diasporization d. expatriation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 39. Non-native employees who work and reside in a foreign country are known as _____. a. host-country nationals b. expatriates c. multinationals d. repatriates Copyright Cengage Learning. Powered by Cognero.

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ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 40. The majority of a multinational enterprise’s employees would typically be _____. a. host-country nationals b. parent-country nationals c. third-country nationals d. multinationals ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 41. Which of the following is an advantage of hiring parent-country nationals? a. Lesser international exposure for managers b. Eliminates cultural and language barriers c. Bridges gap between headquarters and subsidiary d. Facilitates control and coordination by headquarters ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: HRM Bloom's: Analyze 11/12/2021 3:03 PM 3/16/2022 4:19 PM

42. Which of the following is an advantage of hiring parent-country nationals (PCNs)? a. Increases opportunities for HCNs b. Opportunities for host-country nationals will be abundant. c. Adaptation will take lesser time. d. Managers are given international experience. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 43. In staffing, elimination of language and cultural barriers is an advantage of hiring _____. a. multinationals b. third-country nationals c. parent-country nationals d. host-country nationals ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 44. Which approach emphasizes the norms and practices of the parent company relying on parent-country nationals? a. Polycentric b. Geocentric c. Regiocentric Copyright Cengage Learning. Powered by Cognero.

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d. Ethnocentric ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 45. In an MNE, a perceived lack of talent and skills of HCNs often necessitates what type of approach? a. Regiocentric b. Telocentric c. Ethnocentric d. Polycentric ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 46. What type of approach is the opposite of an ethnocentric approach? a. Telocentric b. Polycentric c. Geocentric d. Regiocentric ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: HRM Bloom's: Analyze 11/12/2021 3:03 PM 3/16/2022 4:19 PM

47. Which of the following staffing approaches focuses on the norms and practices of the host country? a. Polycentric b. Geocentric c. Regiocentric d. Ethnocentric ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 48. Which of the following staffing approaches is said to be color blind (the “color” refers to the color of the manager’s passport)? a. Ethnocentric b. Polycentric c. Regiocentric d. Geocentric ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 49. Disregarding nationality, which approach focuses on finding the most suitable managers, who can be PCNs, HCNs, or TCNs? Copyright Cengage Learning. Powered by Cognero.

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a. Polycentric b. Ethnocentric c. Geocentric d. Regiocentric ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 50. An MNE following what type of strategy is more likely to hire a mix of parent-, host-, and third-country nationals as managers in their local subsidiary? a. Home replication b. Global standardization c. Regionalization d. Localization ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 51. MNEs with which strategic orientation follow an ethnocentric staffing approach? a. Home replication b. Localization c. Global standardization d. Transnational ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 52. MNEs pursuing home replication strategy typically hire which type of employees as top managers at local subsidiaries? a. Third-country nationals b. Host-country nationals c. Multinationals d. Parent-country nationals ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 53. MNEs interested in which strategy are typically polycentric in nature when staffing? a. Home replication b. Localization c. Global standardization d. Transnational ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM Copyright Cengage Learning. Powered by Cognero.

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54. MNEs with which strategic orientation follow a geocentric staffing approach? a. Home replication b. Localization c. Transnational d. Regionalization ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 55. MNEs pursuing localization strategy typically hire what type of employees as top managers at local subsidiaries? a. Parent-country nationals b. Multinationals c. Host-country nationals d. Third-country nationals ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 56. Specific preparation to do a particular job is called what? a. Appraising b. Developing c. Tracking d. Training ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Training and Development QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 57. Which of the following refers to longer term, broader preparation to improve managerial skills for a better career? a. Benchmarking b. Nepotism c. Outplacement d. Development ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 58. An informal understanding of expected delivery of benefits in the future for current services is referred to as a(n) _____. a. psychological contract b. collective bargain c. indorsement d. social contract ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/16/2022 4:19 PM

59. Returning expatriates are referred to as _____. a. crossovers b. inbounds c. repatriates d. inpatriates ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Training and Development QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 60. In HRM, what term refers to the determination of salary and benefits? a. Negotiation b. Benchmarking c. Cost-per-hire d. Compensation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 61. Which of the following entails the evaluation of employee’s work for promotion, retention, or termination purposes? a. Benchmarking b. Replacement chart c. Performance appraisal d. Open-book management ANSWER: c POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 62. Which of the following countries is leading the world in managerial compensation? a. United States b. Japan c. China d. Germany ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 63. The most widely used method in expatriate compensation is _____. a. going rate approach b. balance sheet approach c. pay-per-impression d. employee's request approach ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:03 PM 3/16/2022 4:19 PM

64. A compensation approach that pays expatriates the prevailing rate for comparable positions in a host country is called what approach? a. Pay-per-impression b. Balance sheet c. Merit rate d. Going rate ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 65. Compensation with which approach makes locations where pay is higher than in their home country more attractive places to work for PCNs and TCNs? a. Going rate b. Balance sheet c. Pay-per-impression d. Merit rate ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 66. Which of the following is an advantage of using the balance sheet approach of compensation? a. It does not create disparity in pay between expatriates and HCNs. b. It creates less fluctuation between overseas and parent country pay during repatriation. c. It is organizationally less complex to administer. Copyright Cengage Learning. Powered by Cognero.

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d. It is the cheapest method of managerial compensation for expatriation. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 67. When expatriates evaluate HCNs, cultural difference may create problems. In what type of countries could performance appraisals based on statements made by subordinates potentially undermine the power and status of supervisors? a. High individualism b. High power-distance c. High uncertainty avoidance d. High masculinity ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 68. Which country is now Manpower's largest market ahead of the United States? a. France b. Germany c. China d. India ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.15-05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 69. Relocating employees of a foreign subsidiary to the MNE’s headquarters for the purposes of filling skill shortages at headquarters and developing a global mindset for such employees is called _____. a. onboarding b. orientation c. nepotism d. inpatriation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 70. Bristall Inc. is a steel manufacturing company headquartered in the United States with subsidiaries in India, China, and the United States. To create a global mindset for its subsidiary employees, Bristall Inc. relocated its employees in India to the United States. This employee relocation is an example of _____. a. inpatriation b. benchmarking c. collusion d. expatriation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Application DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM Copyright Cengage Learning. Powered by Cognero.

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71. Identify different staffing approaches for subsidiaries. ANSWER: There are three primary staffing approaches when making staffing decisions for top positions at subsidiaries. An ethnocentric approach emphasizes the norms and practices of the parent company (and the parent country of the MNE) by relying on PCNs. A polycentric approach is the opposite of an ethnocentric approach. The polycentric approach focuses on the norms and practices of the host country. A geocentric approach focuses on finding the most suitable managers, who can be PCNs, HCNs, or TCNs. In other words, a geocentric approach is "color blind"⎯the color of a manager's passport does not matter. A geocentric approach can facilitate the emergence of a corporate-wide culture and identity. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 72. Describe the different roles of expatriates. ANSWER: Expatriates play four important roles: strategist, daily manager, ambassador, and trainer. 1) Expatriates are strategists representing the interests of the MNE’s headquarters. Expatriates, especially PCNs who have a long tenure with a particular MNE, may have internalized the parent firm’s values and norms. They may not only enable headquarters to control subsidiaries but also facilitate the socialization process to bring subsidiaries into an MNE’s global orbit. 2) Expatriates act as daily managers to run operations and to build local capabilities. One of the reasons that they are sent in the first place is often due to a lack of local management talent. 3) Expatriates are also ambassadors. Representing headquarters, they build relationships with local managers, employees, suppliers, customers, and officials. Importantly, expatriates also represent the interests of the subsidiaries when interacting with headquarters. 4) Finally, expatriates are trainers for their replacements. Over time, some localization in staffing is inevitable, calling for expatriates to train local employees. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

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73. What are the potential issues that arise during repatriation? ANSWER: Career anxiety: Returning expats wonder what kind of positions they will have when they return, or if they will still have a position at all. Work adjustment: It's challenging to change from a “big fish in a small pond” (at the subsidiary) to “a small fish in a big pond” (at HQ). Ethnocentrism continues to characterize many MNEs in that knowledge transfer is one way⎯from headquarters to subsidiaries via expatriates. Loss of status and pay: Returning expatriates may also experience a loss of status. Overseas, they are “big shots,” rubbing shoulders with local politicians and visiting dignitaries. They often command lavish expatriate premiums, with chauffeured cars and maids. However, most of these perks disappear once they return. It may be difficult for the spouse and children of the expatriate to adjust back home. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Training and Development QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 74. Briefly describe going rate and balance sheet approach used to properly compensate, motivate, and retain expatriates. ANSWER: The going rate approach pays expatriates the going rate for comparable positions in a host country. This approach fosters equality among PCNs, TCNs, and HCNs in the same subsidiary. This would be attractive for PCNs and TCNs to work in a location where pay is higher than the home country. This approach excels in its simplicity. Expatriates also develop strong identification with the host country. However, the going rate for the same position differs around the world, with the United States leading the world in managerial compensation. A second approach is the balance sheet approach, which balances the cost-of-living differences based on parent-country levels and adds a financial inducement to make the package attractive. This facilitates expatriate re-entry. This is the most widely used method in expatriate compensation. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Compensation and Performance Appraisal QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: HRM Bloom's: Analyze 11/12/2021 3:03 PM 3/16/2022 4:19 PM

75. Analyze managing labor relations at home and abroad. ANSWER: In developed economies, firms' key concern is to enhance competitiveness to fight off lowcost rivals from emerging economies. Labor unions' declared interest is to help workers earn higher wages and obtain more benefits through collective bargaining. Labor unions' bargaining chip is their credible threat to strike, slow down, refuse to work overtime, or some other forms of disruption. In contrast to MNEs' ability to move operations around the world, unions are organized on a country-by-country basis. If given a choice, MNEs would prefer to employ nonunionized workforces. Throughout many developing countries, governments welcome MNEs and at the same time silence unions. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Labor Relations QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 76. How do institutions and resources affect human resource management? ANSWER: HRM is significantly shaped by formal and informal rules of the game, both at home and abroad. Every country has rules, laws, and regulations governing the do's and don'ts of HRM. Foreign firms ignoring such rules do so at their own peril. For instance, in Japan, firms routinely discriminate against women and minorities. However, when Japanese MNEs engage in such "usual" practices in the United States, they are often legally challenged. On the other hand, foreign firms well versed in local regulations may take advantage of them. As HRM becomes more "strategic," the VRIO dimensions are increasingly at the center stage. It is relatively easy to imitate a single practice, however, it is much more difficult to imitate a complex HR system (or architecture) consisting of multiple, mutually reinforcing practices that work together. It is also very difficult to imitate such a mutual investment approach that comes together as an HR system (or architecture). While most firms promote some sort of teamwork and diversity, it is challenging to organizationally leverage such teamwork and diversity to enhance performance. Too little or too much diversity may actually hurt performance. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Human Resource Management QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 77. What are the problems related with inpatriation? ANSWER: Some inpatriates are paid according to the going rate in their home (typically developing) countries, which usually is lower than what colleagues in the same firm in developed economies doing equivalent work are paid. Indian IT professionals on average are paid 10% to 20% of American IT professionals. For this reason, some inpatriates refuse to go back to their home countries and instead find work in the host countries. Other inpatriates do return to their home countries but quit their sponsoring MNE. They go to work for rival MNEs that are willing to pay more. Even for inpatriates who return to assume leadership positions in subsidiaries in their home countries (as planned), unfortunately, many are ineffective. In China, inpatriated ethnic Chinese often struggle with an ambiguous identity: Western headquarters views them as "us" whereas HCNs also expect them to be "us." When headquarters and locals conflict over an issue (such as HCN pay), managers who favor headquarters are viewed as "traitors" of sorts by HCNs. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM 78. Identify the four Cs of the Human Resource Manager. ANSWER: First, HR managers need to be curious. They need to be well versed in the numerous formal and informal rules of the game governing HRM worldwide. They must be curious about emerging trends in the world and be prepared to respond to these trends. Second, HR managers must be competent. Far from its lowly roots as a lackluster administrative support function, HRM is now acknowledged as a strategic function. Many HR managers may have been trained more narrowly and with a more micro (non-strategic) focus. Now, HR managers must be able not only to contribute to the strategy conversation but also to take things off the CEO’s desk as full-fledged business partners. Finally, HR managers must be courageous and caring. As guardians of talent, HR managers need to nurture and develop employees. This often means that as employee advocates, HR managers sometimes need to be courageous enough to disagree with the CEO and other line managers if necessary. POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.15-07 - LO: 15-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:03 PM DATE MODIFIED: 3/16/2022 4:19 PM

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Chapter 16 - Corporate Finance and Governance 1. Owners, managers, and boards of directors are collectively known as the "tripod" of corporate governance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 2. Ranging from entrepreneurial start-ups to multinational enterprises (MNEs), all firms need to raise capital. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 3. The amount of dividends a firm pays its shareholders is always fixed. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:41 PM

4. Shareholders purchase stock both for dividends and for the growth potential of the stock. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing Decisions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 5. For equity, the cost of capital is the interest. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 6. The New York Stock Exchange (NYSE) and NASDAQ have a lot of non-US firms listed. This is an example of crosslisting. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 7. In firms with separation of ownership and control, ownership is concentrated with a few owners. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 8. Companies with diffused ownership have a separation of ownership and control. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 9. The vast majority of large firms throughout Europe, Asia, Latin America, and Africa feature concentrated family ownership and control. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 10. Family ownership and control may lead to the selection of less-qualified managers. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 11. In state-owned enterprises, citizens have the rights to enjoy dividends generated from SOEs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 12. Other than families, the state is another major owner of firms around the world. Copyright Cengage Learning. Powered by Cognero.

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a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 13. Agency relationship refers to the relationship between different shareholders. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 14. Principal-agent conflicts result in agency costs. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:05 PM 3/16/2022 4:41 PM

15. In the principal-agent relationship, principals are managers to whom authority is delegated. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 16. In the principal-agent relationship, agents are owners who delegate authority. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 17. Information asymmetries exist between principals and agents. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:41 PM

18. One of the leading indicators of concentrated family ownership and control is the appointment of family members as board chair, CEO, and other TMT members. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 19. Tunneling is a legal method of solving principal-principal conflicts. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 20. The board of directors oversees and ratifies strategic decisions and evaluates, rewards, and, if necessary, penalizes top managers. a. True b. False ANSWER: True POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Boards of Directors QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 21. Inside directors are more independent and can better safeguard shareholder interests. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Boards of Directors QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 22. The board of directors’ effectiveness in serving the control function stems from their independence, deterrence, and norms. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Boards of Directors QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 23. A voice-based mechanism indicates that shareholders no longer have patience and are willing to "exit" by selling their Copyright Cengage Learning. Powered by Cognero.

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shares. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 24. Voice-based governance mechanisms are external mechanisms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 25. In the context of internal governance mechanisms, if accounting-based measures are adopted, stock prices are subject to too many forces for a manager to manipulate the price. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Analyze 11/12/2021 3:05 PM 3/16/2022 4:41 PM

26. From a corporate governance perspective, the market for corporate control complements product market competition and the market for private equity. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 27. The market for corporate control enables the "wholesale" removal of entrenched managers. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 28. Private equity utilizes the stock market, as opposed to the bond market, to discipline managers. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 29. Market for private equity is also known as the takeover market. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 30. Since the 1980s, managers have become much more focused on stock prices, resulting in "shareholder capitalism." a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 31. The Anglo-American and the continental European-Japanese systems are the two primary corporate governance families in the world. a. True b. False ANSWER: True Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 32. The institution-based view argues that among a number of firms governed by the same set of rules, some excel more than others because of differences in firm-specific capabilities that leverage advantage in corporate governance. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Finance and Governance QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-06 - LO: 16-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 33. The minimization of principal–agent conflicts through concentration of ownership and control, unfortunately, introduces more principal–principal conflicts. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Finance and Governance QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-06 - LO: 16-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM Copyright Cengage Learning. Powered by Cognero.

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34. Managerial human capital refers to some of the most valuable, rare, and hard-to-imitate skills and abilities acquired by top managers and directors. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Finance and Governance QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-06 - LO: 16-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 35. Managers need to develop firm-specific capabilities to differentiate a firm on governance dimensions and corporate finance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-08 - LO: 16-08 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 36. The relationship among various participants in determining the direction and performance of corporations is called corporate _____. a. citizenship b. social responsibility c. conscience d. governance ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 37. Which of the following terms refers to the stock in a firm (usually expressed in shares), which represents the owners’ rights? a. Equity b. Debt c. Bond d. Reserve ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 38. The owners of a firm are often known as _____. a. executers b. acquirers c. brokers d. shareholders ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM Copyright Cengage Learning. Powered by Cognero.

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39. Which of the following terms refers to a loan that the firm needs to pay back at a given time with interest? a. Mutual fund b. Debt c. Equity d. Unit trust ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 40. A loan issued by the firm is called a(n) _____. a. option b. unit trust c. dividend d. bond ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 41. Which of the following terms refers to a firm’s failure to satisfy the terms of a loan obligation? a. Debt b. Dissolution c. Default d. Defeasance ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Financing Decisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 42. The basic laws in supply and demand suggest that in general, the larger the pool of capital providers, the _____. a. lower the cost of capital b. higher the rate of return c. more likely a firm will default on loan obligations d. higher the ROI for investors ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing Decisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 43. Listing shares on foreign stock exchanges is known as _____. a. capital rationing b. diagonal spread c. cross-listing d. primary listing ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing Decisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-01 - LO: 16-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/16/2022 4:41 PM

44. Firms with which of the following types of ownership have a separation of ownership and control? a. State b. Concentrated c. Diffused d. Focused ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 45. The vast majority of large firms throughout Europe, Asia, Latin America, and Africa feature what type of ownership? a. Concentrated state b. Concentrated family c. Diffused family d. Diffused state ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Owners QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 46. Firms with what type of ownership have numerous small shareholders but none with a dominant level of control? a. Concentrated b. Family c. Diffused d. State ANSWER: c POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 47. In what type of ownership and control do founders start up firms and completely own and control them on an individual or family basis? a. Concentrated b. Diffused c. Capitalized d. Declared ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Owners QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 48. Executives on the top management team (TMT) are led by the _____. a. chief executive officer (CEO) b. chief financial officer (CFO) c. board of directors d. chief operating officer (COO) ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:05 PM 3/16/2022 4:41 PM

49. Who are persons to whom authority is delegated? a. Agents b. Principals c. Shareholders d. Acquirers ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 50. The costs associated with principal-agent relationships are referred to as which of the following? a. Principal b. Opportunity c. Agency d. Actual ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 51. In an agency relationship, a person who delegates authority is called a(n) _____. a. principal b. agent c. manager d. employee ANSWER: a Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 52. The conflicts between controlling shareholders and minority shareholders are called _____. a. owner-manager conflicts b. agent-agent conflicts c. principal-agent conflicts d. principal-principal conflicts ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 53. Activities that enrich controlling shareholders at the expense of minority shareholders are referred to as _____. a. amortization b. accretion c. backwardation d. expropriation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:41 PM

54. A form of corporate theft that diverts resources from the firm for personal or family use is called _____. a. tunneling b. swapping c. flipping d. paging ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 55. Which of the following statement concerning principal-agent versus principal-principal conflicts is true? a. Formal institutional protection is often lacking in principal-agent conflicts. b. Courts are more protective of minority shareholder rights in principal-principal conflicts. c. Manifestations in principal-agent conflicts come at the expense of minority shareholders and often take the form of expropriation. d. Considering ownership pattern in principal-principal conflicts, often greater than 50 percent of equity is controlled by the largest shareholders. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managers QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 56. A member of the board who is a top executive of the firm is called a(n) _____. a. outside director b. executive manager Copyright Cengage Learning. Powered by Cognero.

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c. inside director d. co-manager ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Boards of Directors QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 57. A non-management member of the board is called a(n) _____. a. outside director b. co-manager c. executive manager d. inside director ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Boards of Directors QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 58. Which of the following are often labeled independent directors? a. Managing directors b. Inside directors c. Executive directors d. Outside directors ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Boards of Directors QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 59. Which of the following statements about the board of directors is NOT true? a. Boards advise the CEO. b. Boards carry out resource acquisition for the focal firm. c. Affiliated directors are independent directors. d. Boards’ effectiveness stems from norms. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Boards of Directors QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 60. In the context of governance mechanisms, what mechanism refers to shareholders' willingness to work with managers, usually through the board? a. Exit-based b. Voice-based c. Private equity-based d. Corporate control-based ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 61. Equity capital invested in non-public companies is called _____. Copyright Cengage Learning. Powered by Cognero.

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a. preferred equity b. common equity c. shared equity d. private equity ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 62. Which of the following is a means by which investors, often in partnership with incumbent managers, issue bonds and use the cash raised to purchase the firm’s stock? a. Hedged tender b. Flat trade c. Adjustable-rate mortgage d. Leveraged buyout ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 63. The main external governance mechanism is the market for _____. a. corporate control b. product competition c. private equity d. stock options ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 64. Private equity is primarily invested through _____. a. leveraged buyouts b. acquisitions c. alliances d. stock swaps ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 65. Which of the following statements about governance mechanisms is misleading? a. Governance mechanisms can be classified as voice-based and exit-based mechanisms. b. As an external governance mechanism, private equity utilizes the stock market to discipline managers. c. In general, boards are likely to use “carrots” before considering “sticks.” d. Product market competition complements the market for corporate control and the market for private equity. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM Copyright Cengage Learning. Powered by Cognero.

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66. Corporate governance in what type of enterprises has relatively weak external and weak internal governance mechanisms? a. Exit-based b. Voice-based c. Unit-trust d. State-owned ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 67. Corporations in what region are generally bank-oriented, network-based systems? a. China b. Continental Europe c. United States d. United Kingdom ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 68. Corporations in continental Europe and Japan rely mostly on _____. a. voice-based, internal mechanisms b. market-oriented, network-based systems c. market-oriented, high-tension systems d. exit-based, external mechanisms ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 69. Corporations in the United States and the United Kingdom rely mostly on _____. a. voice-based, internal mechanisms b. bank-oriented, network-based systems c. bank-oriented, high-tension systems d. exit-based, external mechanisms ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 70. Corporations in what region are market-oriented, high-tension systems? a. Japan b. Continental Europe c. United States d. China ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/16/2022 4:41 PM

71. Differentiate between concentrated and diffused ownership. ANSWER: Founders usually start up firms and completely own and control them. This is referred to as concentrated ownership and control. However, at some point, if the firm aspires to grow and needs more capital, the owners' desire to keep the firm in family hands will have to accommodate the arrival of other shareholders. Most listed firms in the US and UK are now characterized by diffused ownership, with numerous small shareholders, none with a dominant level of control. In such firms, there is a separation of ownership and control: Ownership is dispersed among many small shareholders and control is largely concentrated in the hands of salaried professional managers who own little (or no) equity. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Owners QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-02 - LO: 16-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 72. Outline the principal-agent problems in an agency relationship. ANSWER: The relationship between shareholders and professional managers is a relationship between principals and agents–an agency relationship. Principals are persons (such as owners) delegating authority, and agents are persons (such as managers) to whom authority is delegated. According to the agency theory, to the extent that the interests of principals and agents do not completely overlap, there will inherently be principal-agent conflicts. In a corporate setting, when principals are interested in maximizing the long-term value of their stock, agents may be more interested in maximizing their own power, income, and perks. The primary reason agency problems persist is because of information asymmetries between principals and agents. These conflicts result in agency costs: the principals’ costs of monitoring and controlling the agents and the agents’ costs of bonding (signaling their trustworthiness). POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managers QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/16/2022 4:41 PM

73. Elaborate on the principal-principal conflicts. ANSWER: Principal-principal conflicts are the primary conflicts between two classes of principals: controlling shareholders and minority shareholders. Controlling shareholders' dominant position as both principals and agents may allow them to override traditional governance mechanisms designed to curtail principal–agent conflicts. One manifestation of principal–principal conflicts is that family managers may have the potential to engage in expropriation of minority shareholders, defined as activities that enrich controlling shareholders at the expense of minority shareholders. Expropriation can be legally done through related transactions, whereby controlling owners buy firm assets from another firm they own at above-market prices or spin off the most profitable part of a public firm and merge it with another private firm they own. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Managers QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-03 - LO: 16-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 74. Explain the role of the board of directors. ANSWER: Boards of directors perform control, service, and resource acquisition functions. A board's effectiveness in serving the control function stems from their independence, deterrence, and norms. The ability to effectively control managers boils down to how independent directors are. There is a lack of deterrence on the part of directors should they fail to protect shareholder interests. When challenging management, directors have few norms to draw on. In addition to control, another important function of the board is service—primarily advising the CEO. The board is also responsible for resource acquisition for the focal firm. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Boards of Directors QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-04 - LO: 16-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Leadership Principles KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 75. Elaborate on the external governance mechanisms. Copyright Cengage Learning. Powered by Cognero.

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ANSWER:

There are three external governance mechanisms: market for product competition, market for corporate control, and market for private equity. Product market competition is a powerful force compelling managers to maximize profits and, in turn, shareholder value. From a corporate governance perspective, product market competition complements the market for corporate control and the market for private equity. Market for corporate control also known as the takeover market or the mergers and acquisitions (M&A) market, is essentially an arena where different management teams contest for the control rights of corporate assets. It serves as a disciplining mechanism of last resort when internal governance mechanisms fail. A large number of publicly listed firms have gone private by tapping into private equity— equity capital invested in private (non-public) companies. Private equity is primarily invested through leveraged buyouts (LBOs). As an external governance mechanism, private equity utilizes the bond market, as opposed to the stock market, to discipline managers. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 76. LBO-based private equity transactions are associated with three major changes in corporate governance. List these changes. ANSWER: In an LBO, private investors, often in partnership with incumbent managers, issue bonds and use the cash raised to buy the firm’s stock. LBO-based private equity transactions are associated with three major changes in corporate governance: • LBOs change the incentives of managers by providing them with substantial equity stakes (typically 5% for the CEO and 15% for the whole top management team). • The high amount of debt imposes strong financial discipline on managers. • LBO sponsors closely monitor the firms they have invested in. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Governance Mechanisms as a Package QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-05 - LO: 16-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM Copyright Cengage Learning. Powered by Cognero.

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77. Describe how institutions and resources influence corporate governance. ANSWER: The institution-based view suggests that differences in corporate governance style around the world are affected by formal securities laws, corporate charters, and codes and informal conventions, norms, and values. Better formal legal protection of shareholder rights, especially those held by minority shareholders, in the United States and the United Kingdom encourages founding families to dilute their equity to attract minority shareholders and delegate day-to-day management to professional managers. Strong evidence exists that the weaker the formal legal and regulatory institutions protecting shareholders, the more concentrated the ownership and control rights become. Common-law countries generally have the strongest legal protection of investors and the lowest concentration of corporate ownership. In the last three decades around the world, informal norms and values concerning corporate governance have changed to a great extent. These changes have been attributed to the rise of capitalism, the impact of globalization, and the global diffusion of “best practices.” The resource-based view argues that some of the most valuable, rare, and hard-to-imitate firm-specific resources are top managers and directors—often regarded as managerial human capital. It is within an organizational setting that managers and directors function. Overall, the few people at the top of an organization can make a world of difference. Governance mechanisms need to motivate and discipline them properly to ensure that they make a positive impact. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Finance and Governance QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-06 - LO: 16-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM 78. Discuss the opportunistic agents versus managerial stewards' debate concerning corporate finance and governance. ANSWER: The agency theory assumes managers to be agents who may engage in self-serving opportunistic activities if left to their own devices. However, critics contend that most managers are likely to be honest and trustworthy. Managerial mistakes may be due to a lack of competence, information, or luck but not necessarily due to self-serving motives. Thus, it may not be fair to characterize all managers as opportunistic agents. Although very influential, the agency theory has been criticized as an "anti-management theory of management." A "pro-management" theory, stewardship theory, has emerged recently. It suggests that most managers can be viewed as owners' stewards. Safeguarding shareholders' interests and advancing organizational goals, as opposed to one's own self-serving agenda, will maximize (most) managers' own utility functions. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.16-07 - LO: 16-07 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:41 PM

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Chapter 17 - Corporate Social Responsibility 1. Failing to heed certain CSR imperatives may be self-defeating in the long run. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 2. The ability to meet the needs of the present without compromising the ability of future generations to meet their needs around the world is called global sustainability. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 3. Global sustainability refers only to a sustainable social and natural environment. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Ethical Responsibilities Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:52 PM

4. Global sustainability disregards sustainable capitalism. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 5. Global sustainability is a key goal of CSR. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 6. The secondary stakeholder groups are constituents on whom the firm relies for its continuous survival and prosperity. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 7. The primary stakeholder groups are those who influence or affect, or are influenced or affected by, the corporation, but are not engaged in transactions with the corporation. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 8. Suppliers and customers are secondary stakeholders. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 9. Governments and communities whose laws and regulations must be obeyed and to whom taxes and other obligations may be due are typically considered secondary stakeholders. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 10. Fair labor practice groups that frequently challenge firms that allegedly fail to provide decent labor conditions for employees are an example of the primary stakeholder group. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 11. Triple bottom line refers to the economic, social, and environmental performance that simultaneously satisfies the demands of all stakeholder groups. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/16/2022 4:52 PM

12. One key proposition of the stakeholder view of the firm is that a firm must pursue only the economic bottom line such as profits and shareholder returns. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 13. The CSR approach draws upon Adam Smith's idea that the pursuit of economic self-interest within legal and ethical bounds leads to efficient markets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 14. Free market advocates argue that if firms attempt to attain social goals, such as providing employment and social welfare, managers will lose their focus on profit maximization. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 15. The free market school has provided much of the intellectual underpinning for globalization spearheaded by MNEs. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 16. The CSR advocates argue that firms and managers, if left to their own devices, will choose public interest over selfinterest. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 17. According to the CSR approach, as long as there is competition, there will be both winners and losers. a. True b. False ANSWER: False Copyright Cengage Learning. Powered by Cognero.

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POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 18. The institutional view concerning the effectiveness of the CSR approach focuses on the strategic responses of the firms. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 19. The strategic response framework for analyzing CSR decisions are reactive, defensive, accommodative, and proactive strategies. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM Copyright Cengage Learning. Powered by Cognero.

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20. At the most fundamental level, regulatory pressures underpin informal institutions, whereas normative and cognitive pressures support formal institutions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 21. A reactive strategy is indicated by relatively little or no support by top management of CSR causes. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 22. A defensive strategy would only respond to CSR causes when required by disasters and outcries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Ethical Responsibilities Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:52 PM

23. Adopting a code of conduct is a tangible indication of a firm’s willingness to accept CSR. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 24. A key insight of the institution-based view of CSR is that individuals and organizations make rational choices given the right kind of incentives. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 25. From a CSR perspective, the best firms embrace an accommodative strategy when engaging in CSR. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Social Responsibility Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 26. The defensive strategy a firm might take regarding CSR anticipates responsibility and endeavors to do more than is required. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 27. An accommodative strategy focuses on regulatory compliance. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 28. Codes of conduct tangibly express values that organizational members view as central and enduring. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 29. Top management at a reactive firm not only supports and champions CSR activities, but also views CSR as a source of differentiation that permeates throughout the corporate DNA. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 30. Reactive firms actively participate in regional, national, and international policy and standards discussions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM Copyright Cengage Learning. Powered by Cognero.

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31. At present, the number of proactive firms is still a minority. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 32. CSR-related resources can include tangible technologies and processes as well as intangible skills and attitudes. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 33. Social issue participation qualifies as a value-adding firm resource. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Analyze 11/12/2021 3:05 PM 3/16/2022 4:52 PM

34. CSR-related resources are always rare. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 35. A positive view to adopting a code of conduct believes that (at least some) firms and managers may be self-motivated to do it right regardless of social pressures. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 36. To attract investment, developing countries may enter a "race to the bottom" by lowering environmental standards and some may become "pollution havens." a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Debates and Extensions Copyright Cengage Learning. Powered by Cognero.

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QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-03 - LO: 17-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 37. The best-performing firms are likely to be those that can integrate CSR activities into the core economic functions of the firm while addressing social and environmental concerns. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Management Savvy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-04 - LO: 17-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 38. Any group or individual who can affect or is affected by the achievement of the organization’s objectives is called a(n) _____. a. debtor b. stakeholder c. arbitrageur d. broker ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM Copyright Cengage Learning. Powered by Cognero.

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39. What concept is defined as the consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm to accomplish social benefits along with the traditional economic gains a firm seeks? a. Corporate social responsibility b. Capitulation c. Social networking service d. Corporate personhood ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 40. The ability to meet the needs of the present without compromising the ability of future generations to meet their needs is known as which of the following? a. Capitulation b. Global sustainability c. Corporate social responsibility d. Social activism ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 41. Which of the following drives the urgent need for global sustainability? a. Internationalization of firms from the U.S. in a more rapid pace than ever b. Decreased participation of NGOs in monitoring and enforcing social standards c. Rising levels of population and poverty calling for new ideas and solutions d. The discovery of new sources of non-renewable natural resources ANSWER: c POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 42. How does the stakeholder primacy view differ from the shareholder primacy view? a. It places the emphasis on primary stakeholders, rather than just shareholders. b. It calls for a fundamental commitment to all stakeholders. c. It shifts the emphasis from primary stakeholders to secondary stakeholders. d. It places customers and employees above shareholders. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 43. According to a 1997 Business Roundtable Statement on Corporate Governance, what the paramount duty of management and boards of directors? a. To deliver value to customers b. To invest in employees c. To deal fairly and ethically with suppliers d. To meet the interest of stockholders ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:05 PM 3/16/2022 4:52 PM

44. If asked what the purpose of a firm is, how might followers of Milton Friedman respond? a. To coordinate the interests of management b. To close the gap between the haves and have-nots c. To make money d. To provide goods and services to people in need ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 45. What type of group includes those who influence or affect, or are influenced or affected by, the corporation, but are not engaged in transactions with the corporation and are not essential for its survival? a. Primary stakeholder b. Union c. Secondary stakeholder d. Task ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 46. Which of the following is an example of secondary stakeholder groups? a. Suppliers b. Environmental groups c. Managers d. Employee groups Copyright Cengage Learning. Powered by Cognero.

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ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 47. Constituents on which the firm relies for its continuous survival and prosperity make up what type of group? a. Primary stakeholder b. Secondary stakeholder c. Tertiary stakeholder d. Corporate parenthood ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 48. Which of the following are not engaged in transactions with the corporation and are not essential for its survival? a. Employees b. Fair labor associations c. Governments d. Regulation communities ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Analyze 11/12/2021 3:05 PM 3/16/2022 4:52 PM

49. Which of the following is an example of a primary stakeholder group? a. Shareholders b. Fair labor practice groups c. Public agencies d. Environmental groups ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 50. Free market advocates believe that the first and foremost stakeholder group is _____. a. suppliers b. employees c. managers d. shareholders ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 51. Which of the following is a part of the triple bottom line? a. Legal performance b. International performance c. Environmental performance Copyright Cengage Learning. Powered by Cognero.

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d. Psychological performance ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 52. What term explicitly places shareholders as the single most important stakeholder group? a. Shareholder securitization b. Shareholder capitulation c. Shareholder socialism d. Shareholder capitalism ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 53. Which of the following is one of the four segments of the strategic response framework? a. Accommodative b. Aggressive c. Interactive d. Offensive ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 Copyright Cengage Learning. Powered by Cognero.

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NATIONAL STANDARDS: STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - BUSPROG: Analytic United States - AK - DISC: Strategy Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:52 PM

54. What type of strategy is indicated by relatively little or no support by top management of CSR causes? a. Proactive b. Defensive c. Accommodative d. Reactive ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 55. What type of strategy focuses on regulatory compliance? a. Proactive b. Reactive c. Accommodative d. Defensive ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 56. A strategy that would only respond to CSR causes when required by disasters and outcries is called what type of strategy? a. Accommodative Copyright Cengage Learning. Powered by Cognero.

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b. Proactive c. Reactive d. Defensive ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 57. The general attitude of the top management using what type of strategy is that CSR is an added cost or nuisance? a. Proactive b. Defensive c. Accommodative d. Reactive ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 58. In the context of which of the following strategic responses would adopting a code of conduct be a tangible indication of a firm’s willingness to accept CSR? a. Accommodative b. Reactive c. Proactive d. Defensive ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 59. What type of strategy is characterized by some support from top managers, who may increasingly view CSR as a worthwhile endeavor? a. Accommodative b. Reactive c. Proactive d. Defensive ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 60. A code of conduct is also called a code of _____. a. defense b. legitimacy c. ethics d. reactivity ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM Copyright Cengage Learning. Powered by Cognero.

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61. A set of written policies and standards outlining the proper practices for a firm is called a code of _____. a. point b. defense c. legitimacy d. conduct ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 62. From a CSR perspective, the best firms embrace what type of strategy when engaging in CSR? a. Accommodative b. Proactive c. Reactive d. Defensive ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 63. Top management at what type of firm not only supports and champions CSR activities, but also views CSR as a source of differentiation that permeates throughout the corporate DNA? a. Proactive b. Accommodative c. Defensive d. Reactive ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 64. Firms employing what strategy would actively participate in regional, national, and international policy and standards discussions? a. Accommodative b. Reactive c. Proactive d. Defensive ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 65. What type of strategy endeavors to do more than is required in CSR? a. Accommodative b. Proactive c. Defensive d. Reactive ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM Copyright Cengage Learning. Powered by Cognero.

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DATE MODIFIED:

3/16/2022 4:52 PM

66. Firms using what type of strategy often build alliances with stakeholder groups? a. Accommodative b. Reactive c. Defensive d. Proactive ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 67. It is not realistic to implement what type of strategy when the firm has numerous reactive employees and consumers? a. Accommodative b. Defensive c. Proactive d. Long-term ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 68. Firms using what type of strategy often engage in voluntary activities that go beyond what is required by regulations? a. Accommodative b. Proactive c. Reactive d. Defensive ANSWER: b POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 69. Social issue participation refers to a firm’s participation in social causes not directly related to the management of its _____. a. fair labor practice groups b. primary stakeholders c. secondary stakeholders d. tertiary stakeholders ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 70. Which of the following is one of the underlying motivations behind MNEs voluntary "green practices"? a. CSR demands satisfied by customers in developing countries b. Strong military and legal supervision in the host countries c. Requirements of MNE headquarters for worldwide compliance of higher CSR standards d. Constant interference in collective bargaining ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: GLOB.PENG.05.17-03 - LO: 17-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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DATE CREATED: DATE MODIFIED:

11/12/2021 3:05 PM 3/16/2022 4:52 PM

71. Elaborate on the stakeholder view of the firm. ANSWER: Drivers underpinning global sustainability are complex and multidimensional. For multinational enterprises (MNEs) with operations spanning the globe, their CSR areas are significant. This bewilderingly complex “big picture” forces managers to prioritize. To be able to do that, primary and secondary stakeholders must be identified. Primary stakeholder groups are constituents on which the firm relies for its continuous survival and prosperity. Shareholders, mangers, employees, suppliers, customers —together with governments and communities whose laws and regulations must be obeyed and to whom taxes and other obligations may be due—are typically considered primary stakeholders. Secondary stakeholder groups are defined as those who influence or affect, or are influenced or affected by, the corporation, but they are not engaged in transactions with the corporation and are not essential for its survival. One key proposition of the stakeholder view of the firm is that instead of only pursuing economic bottom line such as profits and shareholder returns, firms should pursue a more balanced set of triple bottom line, consisting of economic, social, and environmental performance, by simultaneously satisfying the demands of all stakeholder groups. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 72. What views were espoused by the Business Roundtables in 1997 and in 2019? ANSWER: In 1997, the Statement on Corporate Governance said that the paramount duty of management and boards of directors is to the corporation's stockholders. In its 2019 statement, the group committed to deliver value to customers, invest in employees, deal fairly and ethically with suppliers, support the communities in which they work, and generate long-term value for shareholders. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities Copyright Cengage Learning. Powered by Cognero.

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KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:52 PM

73. Define corporate social irresponsibility (CSI) and provide some examples. ANSWER: CSI is a lack of corporate social responsibility that can result in disasters and scandals. In 2008, poisoned infant formula caused an uproar among Chinese parents. In 2010, BP made a huge mess in the Gulf of Mexico. In 2011, a Japanese earthquake triggered the meltdown of the Fukushima nuclear power station, making nearby towns uninhabitable. In 2013, a textile factory in Bangladesh collapsed, killing over 1,000 workers. In 2015, Volkswagen was busted by the authorities for circumventing environmental regulations. In 2017, negligence of PG&E, a giant utility in California, contributed to massive wildfires. In 2019, Purdue Pharma, a major opioid producer, had to file for bankruptcy after being sued by multiple victims and state governments. In 2021, due to an unprecedented winter storm, utilities in Texas first unleashed rolling blackouts affecting millions of people, and then jacked up prices hundreds of times citing supply-and-demand imbalance. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 74. Discuss the different views firms have towards adopting a code of conduct. ANSWER: Some argue that firms adopting these codes are not necessarily sincere. This negative view suggests that an apparent interest in CSR may simply be window dressing. Some firms feel compelled to appear sensitive to CSR, following what others are doing, but have not truly and genuinely internalized CSR concerns. An instrumental view suggests that CSR activities simply represent a useful instrument to make good profits. Firms are not necessarily becoming more ethical. A positive view believes that (at least some) firms and managers may be self-motivated to do it right regardless of social pressures. Codes of conduct tangibly express values that organizational members view as central and enduring. POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Ethical Responsibilities Bloom's: Remember 11/12/2021 3:05 PM 3/16/2022 4:52 PM

75. Elaborate on the CSR movement as a response to the free market school of thought. ANSWER: The CSR debate centers on the nature of the firm in society. One side of the debate argues that the social responsibility of business is to increase profits. Free market advocates argue that if firms attempt to attain social goals, such as providing employment and social welfare, managers will lose their focus on profit maximization. CSR advocates argue that a free market system that takes the pursuit of self-interest and profit as its guiding light may in practice fail to constrain itself, thus often breeding greed, excesses, and abuses. They also argue that all stakeholders have an equal right to bargain for a “fair deal.” Given stakeholders’ often conflicting demands, the very purpose of the firm is to serve as a vehicle for coordinating stakeholders’ interests. The CSR school has two driving forces. First, even as free markets march around the world, the gap between the haves and have-nots has widened. Although many emerging economies have been growing by leaps and bounds, the per capita income gap between developed economies and much of the developing world has widened. A second reason behind the rise of CSR seems to be waves of disasters and scandals, which often propel CSR to the forefront of public policy and management discussions. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: A Stakeholder View of the Firm QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-01 - LO: 17-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 76. Elaborate on the proactive strategy to confront CSR pressures. ANSWER: The proactive strategy focuses on constantly anticipating responsibility and endeavoring to do more than is required. Top management at a proactive firm not only supports and champions CSR activities, but also views CSR as a source of differentiation that permeates throughout the corporate DNA. Proactive firms often engage in three areas of activity: actively participate in regional, national, and international policy and standards discussions; build alliances with stakeholder groups; engage in voluntary activities that go beyond what is required by regulations. From an institutional perspective, these proactive activities are indicative of the normative and cognitive beliefs held by many managers on the importance of doing the right thing. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 77. Elaborate on the resource-based view to CSR. ANSWER: CSR-related resources can include tangible technologies and processes as well as intangible skills and attitudes. Many large firms, especially MNEs, can apply their financial, technological, and human resources toward a variety of CSR causes. Although social issue participation may create some remote social and environmental value, it does not satisfy the economic leg of the triple bottom line, so these abilities do not qualify as value-adding firm resources. CSR resources are not always rare. If competitors possess the same capabilities to manage CSR processes, they are common resources. Although valuable and rare resources may provide some advantage, the advantage will only be temporary if competitors can imitate it. Resources must not only be valuable and rare, but also hard to imitate in order to give firms a sustainable (not merely temporary) competitive advantage. A key question is whether firms have the right organizational capabilities to do a good job in the area of CSR. Natural disasters such as earthquakes, tsunamis, and wildfires are unpredictable. When such disasters strike, many firms—as well as individuals, NGOs, and governments—want to help. But few have the organizational capabilities to be truly helpful. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutions, Resources, and Corporate Social Responsibility QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-02 - LO: 17-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM 78. Elaborate on the environmental standards debate concerning CSR. ANSWER: To attract investment, developing countries may enter a "race to the bottom" by lowering environmental standards and some may become "pollution havens." One side argues that because of heavier environmental regulations in developed economies, MNEs may have an incentive to shift pollution-intensive production to developing countries with lower environmental standards. The other side argues that globalization does not necessarily have negative effects on the environment in developing countries to the extent suggested by the “pollution haven” hypothesis. This is largely due to many MNEs’ voluntary adherence to environmental standards higher than those required by host countries. Most MNEs reportedly outperform local firms in environmental management. The underlying motivations behind MNEs’ Copyright Cengage Learning. Powered by Cognero.

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voluntary “green practices” can be attributed to worldwide CSR pressures in general; CSR demands made by customers in developed economies; and requirements of MNE headquarters for worldwide compliance of higher CSR standards. Although it is difficult to suggest that the "race to the bottom" does not exist, MNEs do not necessarily add to the environmental burden in developing countries. POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Debates and Extensions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: GLOB.PENG.05.17-03 - LO: 17-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 3:05 PM DATE MODIFIED: 3/16/2022 4:52 PM

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