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FVC1 - Global Business UNIT QUIZZES Graded A(2022 questions and answers)
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FVC1 - Global Business UNIT QUIZZESGraded A(2022 questions and answers)
What effect does a command economy have on the process of globalization? Answer-
The government is less flexible, so the globalization process is stopped.
Which core principle of the World Trade Organization supports equality among member
nations and helps fight discrimination among them? Answer- Most-favored-nation
(MFN) status
Countries A and B participate in trade agreements that allow free trade among
participant countries. However, Country A imposed quotas on several imported products
to protect its domestic products.
What is the effect, if any, on the domestic prices of these products? Answer- Increases
How do governments help companies offset the cost of manufacturing domestically?
Answer- Subsidies
A firm in Country A exports products to Country B. The currency in Country B is strong
relative to the currency in Country A. What does this mean for the firm? Answer- More
valuable export sales
How is global business positively affected by intercultural exchange? Answer- It
increases worldwide connections that support commodity trading.
How does globalization support tolerance for different people and ideas? Answer- By
increasing the access to information
A business has recently started selling in a new global marketplace. Shortly after the
company made this global expansion, the new country opted to implement ad valorem
tariffs. How will this change affect the company? Answer- It will levy a variable tax
based on the value of goods imported.
Which business component does the TRIPS agreement help protect for member
nations? Answer- Intellectual property protection for all member nations
Countries A, B, and C have a trade agreement. Country C imposes high tariffs on all
raw materials imported from Country A, and Country B imposes a lower tax on the same
raw materials. These raw materials are unique to Countries B and C and essential to
Country A. What is the effect of this set of actions on these countries? Answer- Country
A will do more business with Country B.
, A company is conducting a legal risk analysis for a country that has a civil law system.
Which statement accurately characterizes this legal system? Answer- It is based on a
detailed set of laws that form a code.
Which fact should a company opening its operations in the U.S. state of Louisiana note?
Answer- The state has a mixed law system.
A car manufacturer purchases raw materials from Country A, manufactures the product
in Country B, and has a sales force in Country C. Which term reflects this production
process that international agreements now enable? Answer- Value chain
A business invests in an assembly plant located near a port in a foreign country. The
business will import parts and raw materials for final assembly as a finished product,
then export these products for international sales. The business receives tax incentives.
What is the name for the geographic area where these products are assembled?
Answer- Export processing zones (EPZs)
A multinational corporation has manufacturing facilities in many Asian countries due to
cheaper labor. Which strategy is the corporation using? Answer- Acquisition of
resources
What is the directional nature of contracts between international businesses? Answer-
Horizontal contracts with vertical legal structure
A company is reviewing intangible assets that are covered by intellectual property laws.
Which asset is being reviewed? Answer- Copyright
Which organization aims to create support and cooperation among participating nations
as well as respecting the unique laws and regulations of each sovereign country?
Answer- WTO
An individual works in a global office where it is typical to pay small, unofficial fees to
top administrators in the city to gain an advantage. The individual agrees to pay the fee
needed to expedite placement of a business phone line at home so work can be
completed after normal work hours. What is this inducement called? Answer- Grease
payment
A large U.S. corporation is entering a foreign market but is having significant delays in
acquiring the necessary permits to begin operations. A local official tells the project
manager that a financial incentive should be paid to speed up the permit process. The
official stresses that other companies engage in this practice and that it is acceptable in
the local culture, so the project manager pays the incentive. How is this action
characterized? Answer- It is a violation of the U.S. Foreign Corrupt Practices Act.
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