International business Test 2 Review 1

Developed by: Dan

Test 2 Review 1

Question 1: All of the following a part of democracy EXCEPT:

	Majority rules.
	An independent/fair court system to ensure fair trial
	The society is very much closed to the rest of the world and information flow is tightly controlled by the government
	A relatively open society with equality among the citizens
	Political decision made by citizens.

Question 2: Which of the following is a problem with democracy?

	Inefficiency and difficulties to have a consensus in the decision making process along with emerging new types of democracies with frangibility and instability.
	Political power is monopolized
	The society is very much closed to the rest of the world and information flow is tightly controlled by the government

Question 3: All of the following are characteristics of a totalitarian regime EXCEPT:

	Inequality among citizens is often observed
	There citizens' freedom and civil liberties is very much limited
	Less internal and external control on information flow
	Political power is monopolized by a man or a small number of people
	Minority controls the majority and no opposition is permitted

Question 4: Risk of drastic changes in a country’s business environment which is caused by political instability.

	Macro Risk
	Micro Risk
	Political risk
	Sovereign risk

Question 5: Risk of non-payment by a government

	Macro Risk
	Micro Risk
	Sovereign Risk
	Political Risk

Question 6: This type of risk causes a dramatic and abrupt change in business environments, which will influence all foreign operations in the host countries such as nationalization of all foreign operation in the country.

	Macro risk
	Micro Risk
	Political Risk
	Sovereign Risk

Question 7: This type of risk causes less dramatic but more prevalent changes in business environment which will influence only some specific firms or specific industries

	Macro Risk
	Political Risk
	Micro Risk
	Sovereign Risk

Question 8: Which is a form of political risk?

	All of the above
	Expropriation, operational restrictions
	Confiscation, freezing the assets
	Breach of Contract (Concession agreement)
	Blockage on the fund flow, heavy tax or frequent tax probe

Question 9: This approach to assess political risk identifies all the political and financial factors that contribute to a firm's assessment of country risk

	Inspection Visits
	Checklist approach
	Quantitative Analysis
	Delphi Technique

Question 10: Requires the evaluator to collect independent opinions of the group of people called 'specialists' on country risk without discussion among themselves

	Quantitative Analysis
	Delphi Technique
	Checklist Approach
	Inspection Visits

Question 11: Developing a statistical model and identifying the major factors that seemingly influence the level of country risk

	Quantitative Analysis
	Inspection visits
	Checklist Approach
	Delphi Technique

Question 12: Requires extensive traveling to a country and numerous meetings with government officials, firm executives, and/or consumers in an attempt to collect more relevant and confidential information about the target country

	Checklist approach
	Quantitative Analysis
	Delphi Technique
	Inspection Visit

Question 13: Which of the following is NOT a forecasting service for political risk?

	WEFN by International Business Fed.
	PSSI index by Haedel and West
	IRIS index by PRS group
	BERI index by Business International Corp.
	ASPRO/SPAIR Index by Shell Oil co.

Question 14: Approaches to reducing exposure to political risk This approach requires shortening the payback period and recovering invested capital as soon as possible delaying any additional major repair, replacement, or investment in order to minimize the damage in case of confiscation or nationalization of your properties.

	Maximizing local financing
	Differentiated Technology
	Hire local labor and manager
	Use a Short Term Horizon
	Purchasing Insurance

Question 15: If an MNC can bring in much superior or unique technology to its subsidiary that cannot be duplicated locally or internationally, it would not be easy for the host government to take over and operate the operating unit without such techniques

	Purchase Insurance
	Maximizing local financing
	Use a short term horizon
	Differentiated technology
	Hire local labor and manager

Question 16: If MNCs hire a great number of local employees for their subsidiary, they could put the pressure on their government to avoid any government takeover.

	Maximizing local financing
	Purchase insurance
	Differentiated technology
	Hire local labor and manager
	Use short term horizon

Question 17: If the subsidiary borrows a loan from local banks to finance the project or build the facilities in the host country, when the host country tries to take over your properties there, you can minimize the damage.

	Hire local labor and manager
	Differentiated technology
	Use a short term horizon
	Purchase insurance
	Maximizing local financing

Question 18: Helps cover political risk for MNCs when you purchase this

	Hire local labor and manager
	Use a short term horizon
	Differentiated technology
	Maximizing local financing
	Purchase insurance

Question 19: The degree of political instability, which will eventually influence the level of political risk, will be decided by the amount of frustration that people have in the society.

	Inverted U-Curve theory
	W-Curve theory
	Inverted W-Curve theory
	U-Curve Theory

Question 20: These type of countries will suffer the most political instability according to the inverted U-curve theory

	Developing
	Developed
	Newly industrialized

Question 21: The amount of goods and services that a country produces is solely determined by the interaction of supply and demand in the market

	Market economy
	Private Economy
	Command Economy
	Public Economy

Question 22: The amount of goods and services that a country produces and distributes are decided by the government

	Public Economy
	Market Economy
	Private economy
	Command economy

Question 23: Citizens are allowed to have their private properties and assets

	Private ownership
	Market ownership
	Command ownership
	Public ownership

Question 24: All the assets and properties and production means belong to the government and individual citizens are not allowed to have private assets or properties

	Market ownership
	Private ownership
	Public ownership
	Command ownership

Question 25: Contains insufficient production, public ownership, and command economy

	Market Socialism
	Capitalism
	Communism
	Democratic Socialism

Question 26: Contains inequitable distribution, Private ownership, and market economy

	Capitalism
	Communism
	Market socialism
	Democratic socialism

Question 27: Maintains socialistic structure, but has added capitalistic elements to increase production and efficiency

	Market socialism
	Capitalism
	Democratic socialism
	Communism

Question 28: Maintains democratic structure but to introduce some socialistic elements to achieve distributive justice

	Market socialism
	Capitalism
	Democratic socialism
	Communism

Question 29: Why study culture?

	It is a major source to dictate human behaviors. Thus, we need to improve “CQ”
	Because you have to
	Because it is integral to earning profits in your international business

Question 30: The visible part above the surf, the part you see easily

	Surf (Front) Culture
	Sub (back) Culture
	Sent (Middle) Culture

Question 31: The invisible part below the surf, the part you can't easily see such as attitudes, perceptions, or assumptions

	Sub (back) culture
	Surf (front) culture
	Sent (Middle) culture

Question 32: Which of the following is a definition of culture?

	Culture is the various aspects of society (such as value, rituals, symbols, rules, beliefs, and artifacts) that distinguish the members of one society from the members another society.
	A learned, shared, compelling interrelated set of symbols whose meaning provide a set of orientation for the members of the society.
	Culture is a man made environment because it is us, the members of the society, who create our own culture. Nonetheless, our own behaviors are confined by the culture that we created. Thus, culture is an environment that we create under which we have to conduct our own behavior.
	All of the above are correct

Question 33: Any kind of pictures, objects, gestures, or words which carry a particular meaning only recognized by the members of one culture.

	Symbols
	Values
	Rituals
	Heroes

Question 34: Role models that posses characteristics that are highly prized in a culture

	Heroes
	Values
	Rituals
	Symbols

Question 35: Conventionalized behavior patterns that occur in particular situations

	Heroes
	Symbols
	Values
	Rituals

Question 36: The core of culture, taught in early childhood and most important for one's decision what is right or wrong

	Heroes
	Rituals
	Values
	Symbols

Question 37: Master over nature...earth belongs to us like our personal property. Natural disaster is a scientific phenomenon

	N/A
	US (Modern)
	Traditional societies

Question 38: Less materialistic; too much material ruins the soul, material pursuit is selfish and immature

	N/A
	Traditional societies
	US (Modern)

Question 39: Reluctant to change, against ancestor's will, change is work of evil

	Traditional societies
	US (Modern)
	N/A

Question 40: Action oriented, any action better than inaction, dynamic, trial and error; improvement

	N/A
	Traditional Societies
	US (Modern)

Question 41: Collective "Us" centered sharing and conformity

	Traditional societies
	US (Modern)
	N/A

Question 42: Pragmatic and practical

	N/A
	Traditional Societies
	US (Modern)

Question 43: Optimistic, life is full of joy

	US (Modern)
	N/A
	Traditional Societies

Question 44: Horizontal, egalitarian, equally born (Relationship with others)

	N/A
	US (Modern)
	Traditional Societies

Question 45: Formal or official way to communicated

	Sapir-Whorf Hypothesis
	Nonverbal Language
	Verbal Language

Question 46: Proposes that language not only serves as a mechanism to transmit the perception that people have, but also the language itself influences people's perceptual process

	Nonverbal Language
	Verbal Language
	Sapir-Whorf Hypothesis

Question 47: Which of the following is NOT part of the communication process?

	Transmission/Message
	Mental Breakdown
	Receiver/Understand Meaning
	Encode/Decode, Noise
	Sender/Clarify Meaning

Question 48: In cross cultural communication, one of the most typical problems is the fact that the message sender's language is not compatible to that of the message receiver

	Encoding and Decoding
	Past experiences
	Tone of voice and silence
	Incompatible language
	Differences in communication patterns

Question 49: Even if we use the same language, the same word can be interpreted in different ways

	Communication patterns
	Encoding and Decoding
	Past experiences
	Incompatible Language
	Tone of voice and silence

Question 50: If the message sender and receiver do not share the same experiences in their lives, it is very difficult to have an effective communication.

	Tone of voice and silence
	Incompatible language
	Encoding and decoding
	Past experiences
	Communication patterns

Question 51: Causes a lot of noises in the cross cultural communication, IE Americans speak in a linear pattern, but other cultures do not necessarily.

	Past experiences
	Tone of voice and silence
	Communication patterns
	Encoding and decoding
	Incompatible Language

Question 52: The ups and downs of speech and how they can be a noise

	Communication patterns
	Tone of voice and silence
	Encoding and decoding
	Past experiences
	Incompatible Language

Question 53: T/F: Different cultures may have different sources of metaphors and preferred topics can differ between cultures.

	False
	True
	N/A

Question 54: All stimuli, humanly or environmentally generated, except verbal ones that have potential message value for the sender/and or receiver

	Non-Verbal Language
	Sapir-Whorf Hypothesis
	Verbal Language

Question 55: Another big element in culture is people's attitudes about certain things. Some noticeable differences associated with attitude are:

	Age
	All of the above
	Gender and giving of gifts
	Time and group membership
	Wealth accumulation

Question 56: Which of the following is a function of nonverbal communication?

	All of the above
	Affective or emotional states and manipulating nonverbal symbols
	Relational messages
	First impressions
	Using nonverbal elements as one way of presenting ourselves to other people

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