Exam 1-BUSI 303
1. A mixed economy is an economic system that allows for the simultaneous
operation of publicly and privately owned enterprises.
o True
o False
2. A multinational corporation is one that delivers services in at least two
countries.
o True
o False
3. The WTO has endorsed attempts by various organizations to develop legal
standards with a special emphasis on corporate and financial institution laws.
o True
o False
4. Communications technologies provide us with the ability to encode our
thoughts and purposes clearly.
o True
o False
5. Oral agreements imply strong commitments in high-context cultures.
o True
o False
6. Paul Krugman’s New Trade Theory Model demonstrated that certain
industries, government protections of an industry prove advantageous.
o True
o False
7. According to the new trade theory, certain industries should not be modeled
using the perfect competition assumption.
o True
o False
8. Globalization involves assimilation which is referred to as blending and
merging of various cultures.
o True
o False
9. Globalization is a relatively new paradigm.
o True
o False
10. Horizontal integration occurs when a firm expands its business into
different products that are not similar to current lines.
o True
o False
11.Subsidies are special privileges that governments provide to businesses in
order to attract them to a region or to simply have the required funds to
operate successfully.
o True
o False
12. A competitive advantage occurs when a nation is able to produce more
output than any other nation.
o True
o False
13. Paul Krugman developed and published the International Product Life
Cycle Theory in 1966.
o True
o False
14. Muslims are legally required to give one-fortieth of their income to the
needy.
o True
o False
15. The individualism dimension speaks to the extent that people place their
own needs and their family above everyone else.
o True
o False
16. Nations have been pouring money into researching and developing new
advanced technologies in an effort to stay competitive in the world market.
o True
o False
17. Successful FDI decreases employment and the standard of living for
nationals in the host country.
o True
o False
18. Geert Hofstede introduced the seven dimensions of culture.
o True
o False
19. An economic policy whereby governments accumulate wealth in the form
of gold bullion is referred to as mercantilism.
o True
o False
20. Outsourcing production to foreign firms makes it possible for the domestic
firm to maximize production and efficiency; however, it results in higher
product prices for the consumer.
o True
o False
21. The Export-Import Bank is the official credit agency of the European
Union.
o True
o False
22. Gross Domestic Product (GDP) is the total market value of all the goods
and services produced by a nation during a specific period.
o True
o False
23. Ownership risk is defined by the Bank for International Settlement (BIS) as,
“the risk of loss resulting from inadequate or failed internal process, people,
and systems or from external events.”
o True
o False
24. Fons Trompenaar believed that cultures generally proved to be
indistinguishable from one to the other.
o True
o False
25. An ethnocentric multinational corporation (MNC) very carefully considers
the cultures of the countries that it operates in when making business
decisions.
o True
o False
26. Market demographics provide answers to questions pertaining to who, what,
why, and when and how for a specific group of people.
o True
o False
27. Social responsibility is the discipline of dealing with what is good and bad
as well as with moral duty and obligation.
o True
o False
28. Supporters of protectionism say that by increasing the cost of imported
goods through tariffs, the government instituting the barrier penalizes the
sending country as well as the citizens it is trying to protect.
o True
o False
29. A centrally planned economy most often refers to an economic system that
is under comprehensive control and regulation by a government in
accordance with the plan of economic development.
o True
o False
30. Labor and production costs are typically lower in less developed nations
which creates a continuous pull for international corporations
o True
o False
31. Muhammad’s disciples (i.s. Islamists) believe that sometime during the
seventh century AD, the Angel Gabriel dictated the contents to Muhammad
which is viewed as infallible and without error.
o True
o False
32. Hofstede’s fifth dimension of national culture, Long-term Orientation, was
derived from a values inventory suggested by Asian researchers and is
reminiscent of the teachings of Confucius.
o True
o False
33. Words have the same meaning across all languages.
o True
o False
34. If foreign ownership decreases faster than domestic ownership, then the
country is said to have capital account surplus.
o True
o False
35. The dissolution of the Council for Mutual Economic Assistance (CMEA)
disrupted many supply chains was one reason why Russia did not adequately
make the transition from a centrally planned to market economic system.
o True
o False
36. One positive aspect of collectivism is that the differences among individuals
are emphasized.
o True
o False
37. The Foreign Corrupt Practices Act makes it illegal to influence foreign
officials through personal payment.
o True
o False
38. In the “Great Revelation”, Confucius revealed the step by step process by
which one attains self-development.
o True
o False
39. Local content requirements restrict domestic business operations by
hindering imports from reaching a nation or being purchased on the
domestic market.
o True
o False
40. According to Trompenaar’s model of culture, people in Universalistic
cultures share the belief that general rules, odes, values, and standards take
precedence over particular needs and claims of friends and relations.
o True
o false
