SW 1 7.

Commercial jets, and containerization have all

“shrunk the globe.” (True)
1. Globalization of production can help companies
lower their overall cost structure or improve the quality 8. FDI Stands for what? Foreign Direct Investment
or functionality of their product offering. (True) 9-10 Give me at least two advantages of
2. The World Bank has focused on policing the world containerization. (Flexibility, Ease of Management,
trading system and making sure nation-states adhere to Speed of Transportation, Economies of Scale, Durability,
the rules laid down in trade treaties. (False) Safety and Security, and Standardization.)

3. When Cyprus had a financial crisis, it went to the QUIZ 1

World Bank, known as the lender of last resort, to bail it
1. Because Russia has shown signs of shifting back
out. (False)
toward greater state involvement in economic activity
4. One of the UN's central mandates is the promotion of and authoritarian government, doing business in Russia
higher standards of living, full employment, and is considered risky. (True)
conditions of economic and social progress and
2. According to globalization critics, the decline in
development. ( True)
unskilled wage rates is due to the migration of low-
5. Rivers Inc., a U.S.-based sports apparel manufacturer, wage manufacturing jobs offshore and a corresponding
sets up a production unit in China to take advantage of reduction in demand for unskilled workers. (True)
the lower labor costs there. This is an example of
3. Evidence suggests that technological change has had
foreign direct investment. (True)
a bigger impact than globalization on the declining
6-10 Give me at least 5 countries under G20. (Argentina, share of national income enjoyed by unskilled labor.
Germany, Republic Korea, USA, Australia, India, Russia, (True)
European Union, Brazil, Indonesia, Saudi Arabia,
4. According to supporters of free trade, as countries
Canada, Italy, South Africa, China, Japan, Turkey,
get richer they commit greater violation of
France, Mexico, United Kingdom)
environmental and labor regulations. (False)
SW 2 5. A firm needs to become a multinational enterprise to
1. World Bank gives aid of $100 million to Kenya for engage in international business. (False)
creating rural health care facilities. This is an example of
foreign direct investment. (False)
Because Russia has
2. The lowering of barriers to international trade
enables firms to view the world, rather than a single
country, as their market. (True)
shown signs of
3. The cost of microprocessors continues to fall, while
their power increases. This statement supports the
shifting back toward
predictions made by Moore's Law. (True)

4. Foreign direct investment by non-U.S. firms increased

greater state
because they wanted to disperse production activities
to optimal locations and to build a direct presence in
involvement in
major foreign markets. (True)

5. Outsourcing is a process that is limited to

economic
manufacturing enterprises. (False)

6. More than half of the world’s population uses the

activity and
internet (True)
authoritarian
 A) the lowering of barriers to cross-border trade and
government, doing investment.

business in Russia is 15. Which of the following is true of the IMF?

D) It has emerged as a significant player in the global

considered risky. economy.

SW 3
TRUE 1.A ________ is a less rigid form of social stratification
6. According to supporters of debt relief, new in which social mobility is possible.
democratic governments in poor nations should not be
Class System
forced to honor debts incurred by corrupt and
dictatorial predecessors. (True) 2. Sex before marriage
7. A firm needs to become a multinational enterprise to
Mores
engage in international business. (False)
3. India's caste system is among the world's oldest
8. ________ refers to the shift toward a more
forms of surviving social stratification.
integrated and interdependent world economy
True
D) Globalization
4.Culture is group of people sharing a common set of
9. In 2008 and 2009, the ________ became the forum
values and norms.
through which major nations attempted to launch a
coordinated policy response to the global financial False
crisis, which started in America
5.This are the routine conventions of everyday life.
C) Group of Twenty (G20)
Folkways

10.) Which of the following factors hinders globalization

6.RA 11313 or Safe Spaces Act
of consumer goods market?
Laws
A) national differences in tastes and preferences
7.Which of the following refers to the extent to which
11.) What impedes firms from achieving the optimal
individuals can move out of the strata into which they
dispersion of their productive activities to locations
are born?
around the globe?
Social Mobility
A) transportation costs
8.Education plays an important role, from an
12. ) The General Agreement on Tariffs and Trade
international business perspective, as a determinant of
(GATT) was responsible for
national competitive advantage.
B) policing the global marketplace.
True
13.) The ________ is primarily responsible for policing
9.Upon meeting a foreign business executive, a
the world trading system and making sure nation-states
Japanese executive will hold his business card in both
adhere to the rules laid down in trade treaties signed by
hands and bow while presenting the card to the
member states.
foreigner.
D) World Trade Organization
True
14.) The World Trade Organization promotes
10.Folkways include rituals and symbolic behavior.
True False

11.Which of the following is a closed system of

stratification in which social position is determined by
the family into which a person is born, and change in QUIZ 2
that position is usually not possible during an
individual's lifetime? 1.Hindus believe

Caste System in reincarnation, or rebirth into a different body, after

death.
12.Social structure indicates how a society is organized
in terms of the values, norms, and relationships that are 2.Because of its individualistic mind-set, Japanese
part of its fabric culture is more supportive of entrepreneurial activities
than American culture.
True
False
13.Mores are actions of little moral significance. Rather,
they are social conventions that deal with things like 3.The ________ refers to the extent to which a culture
appropriate dress code, good social manners, eating programs its citizens to accept delayed gratification of
with the correct utensils, neighborly behavior, and so their material, social, and emotional needs.
on long-term versus short-term orientation dimension
14.Nudity and Rape 4.What is ethnocentrism?
Taboos a belief in the superiority of one's own ethnic group or
culture
15.A caste system is a closed system of stratification in
which social position is determined by the family into 5.A major difference between Buddhism and Hinduism
which the person is born. is that unlike Hinduism, Buddhism
True does not support the caste system.

16.When Jana visits her mother, she takes great pains 6.Max Weber theorized that there was a relationship
to watch her language and use good manners because between Protestantism and the emergence of modern
that is what her mother expects of her. This capitalism because
demonstrates the concept of
Protestant ethics emphasize the importance of hard
Folkways work and wealth creation and frugality.
17.A class system is a rigid form of social stratification in 7.Hofstede's results, as might be expected, showed that
which the position a person has by birth cannot be nations such as ________ scored low on long-term
changed through his or her own achievements or luck. orientation.
False the United States and Canada
18.Values form the bedrock of a culture 8.Both Hindus and Buddhists stress the afterlife and
spiritual achievement rather than involvement in this
True
world.
19.Wearing of proper uniform
True
Folkways
9.Guanxi are relationship networks supported by
20.In today's world of global communications, rapid reciprocal obligations.
transportation, and global markets, cultural differences
True
have ceased to exist.
10.Hofstede's research has been criticized because it 18.Max Weber believed that Protestantism encouraged
was culturally bound. capitalism's development by emphasizing the
importance of wealth creation and frugality.
True
True
11.Hofstede's masculinity versus femininity dimension
looked at the relationship between gender and work 19.Which of the following is an example of
roles and found that in ethnocentrism?

masculine cultures, sex roles were sharply An American manager criticizes the cultural practices of
differentiated, and traditional "masculine values" Saudi Arabia, when he is sent there on business,
determined cultural ideals. because it differs from his own cultural norms.

12.Religion may be defined as 20.________ refers to a society that allows relatively

free gratification of basic and natural human drives
shared beliefs and rituals that are concerned with the
related to enjoying life and having fun.
realm of the sacred.
Indulgence
13.The most widely spoken language in the world is
Mandarin 21.Hofstede's uncertainty avoidance dimension
considered
False
the extent to which different cultures socialized their
14.The social organization of Western society tends to
members into accepting ambiguous situations and
emphasize on
tolerating uncertainty
individual achievement.
22.Ethical systems are

a set of moral principles, or values, that are used to

guide and shape behavior.

15.Martin worried a lot about his job, which he chose

specifically because it was very structured with clear
23.The ________ is a research project spanning more
rules and regulations. He carefully planned his career to
than 100 countries that explores people's values and
maximize job security and retirement benefits. Martin
norms, how they change over time, and what impact
would rate high on which of Hofstede's four
they have in society and business.
dimensions?
World Values Survey
uncertainty avoidance
24.Hinduism and Buddhism both stress the importance
16.According to Geert Hofstede's study, which of the
of
following cultural dimensions would be characterized by
a greater readiness to take risks and less emotional 25.For international businesses, the connection
resistance to change? between culture and competitive advantage is
important because
low uncertainty avoidance
a strong connection is likely to produce the most viable
17. ________ are social conventions concerning things
competitors.
such as the appropriate dress code in a particular
situation, good social manners, eating with the correct 26.According to ________, suffering originates in
people's desires for pleasure.
Folkways
Buddhism
27.Several studies have shown that economic 37.The ________ dimension of Hofstede's study
advancement and ________ are important factors in explores how a society deals with the fact that people
societal change. are unequal in physical and intellectual capabilities.

globalization power distance

28.The individualism versus collectivism dimension of 38.Hofstede's ________ dimension measured the
Hofstede's study explored extent to which different cultures socialized their
members into accepting and tolerating ambiguity.
the relationship between the individual and his or her
fellows. uncertainty avoidance

29.Unspoken language refers to nonverbal 39.Which of the following statements about the use of
communication spoken language is true?

True Most people prefer to converse in their own language

rather than English.
30.Which of the following observations is correct?
40.Hinduism is the second largest religion.
The economic principles of Islam prohibit the payment
or receipt of interest. False

31.Social rules and guidelines that prescribe appropriate

behavior in particular situations are best described as
Online Short Quiz #1
norms.
1.Which feature of a common market differentiates it
32.A Japanese executive's ritual of presenting a business
from a customs union?
card to a foreign business executive is an example of
allows factors of production to move freely among
a folkways.
members

2.Roy is a Filipino citizen working in Russia. His Income

33.The system of values and norms that are shared earned will form part of the GNP of the Philippines.
among a group of people and that when taken together
True
constitute a design for living best defines
3.________ eliminates trade barriers between member
culture.
nations, adopts a common external policy, and permits
34.The emphasis on individualism in the United States factors of production to move freely between member
results in which of the following advantages? countries but it also requires a common currency,
harmonization of members' tax rates, and a common
Executives are exposed to different ways of doing
monetary and fiscal policy.
business.
An economic union
35.Which of the following sociologists made a
connection between Protestant ethics and "the spirit of 4.Three countries agree to remove barriers to trade
capitalism"? between member countries and adopt a common
external trade policy toward nonmembers. They also
Max Weber
agree to allow people and other factors of production
36.A caste system differs from a class system because to move freely across their borders. Which level of
economic integration is this an example of?
it is not possible for an individual to change his or her
caste, while a class system allows people to change common market
their class through individual achievement.
5.There are 9 member countries of ASEAN
False 1.What was the main objection raised by those in the
United States and Canada who opposed the ratification
6.NAFTA consists of Venezuela, Russia, and China
of the NAFTA?
False
job losses
7.Which feature of a customs union differentiates it
2. Why doesn't Great Britain use the euro as its national
from a free trade area?
currency?
a common external trade policy toward nonmembers
It would have to relinquish control of its monetary
policy to the EU.

8.Ana, a widow is foreign National working in the 3.Which of the following is directly elected by the
Philippines. Her income will form part of the GNP of the populations of the member states and is primarily a
Philippines. consultative rather than legislative body?

False the European Parliament

9.An import tariff is occasionally practice in developed 4.Regional economic integration has created significant
countries to generate revenues. opportunities for businesses to grow the market for
their goods and services and lower their factor costs
False
True
10.Which feature of an economic union differentiates it
from a common market? 5.Because of the fact that everyone benefits from
economic integration, it is easy to achieve and sustain.
a common monetary and fiscal policy
False
11.________ has no barriers to trade between member
countries, includes a common external trade policy, and 6.Linking neighboring countries economically and
allows factors of production to move freely between making them interdependent
members.
creates incentives to increase political cooperation as
A common market well.

12.The largest export and Importer in BRICS is Russia. 7.Which level of economic integration eliminates trade
barriers between member countries and adopts a
False common external trade policy?
13.The main goals of ASEAN are to increase economic customs union
growth, social progress and promote regional space and
stability. 8.Which of the following explains why economic
integration has never been easy to achieve or sustain,
True despite the strong economic and political arguments in
14.BRICS is the most integrated trade block in the world support?
and formed in the year 1951 While a nation as a whole may benefit significantly,
False certain groups may lose.

15.India's Major import from russia are Gems and 9.Which of the following is seen as a benefit of the
Jewelry euro?

True lower foreign exchange and hedging costs

10.There are 8 member countries of ASEAN

False
QUIZ 3
11.Concerns about national sovereignty in the EU have trade diversion
been a major impediment to economic integration.
21.Charlyce lives in a country where there are no
True barriers to the trade of goods and services. This is called
a free trade area.
12.Since its establishment, the euro has had a stable
trading history. True

False 22.India is the biggest trading country in both imports

and exports among SAARC members.
13.COMESA consists of 19 member countries
True
True
23.Three long-term EU members, Great Britain,
14.A key benefit resulting from the adoption of the euro
________, and Sweden, have not adopted the euro.
is the ability to compare prices across member markets.
Denmark
True
24. Which of the following observations is true of the
15.Which of the following is a reason Turkey is not yet a
euro?
member of the EU?
It required participating countries to give up control
There are concerns over human rights issues in the
over monetary policy.
country.
25.A central reason for the establishment of the EU was
16.Which of the following is seen to be a consequence
the devastation of Western Europe during two world
of the expansion of the EU from 15 nations to 28
wars and the desire for a lasting peace.
nations?
True
delays in decision-making processes
26.South Korea is part of BRICS

False

27.China's top import from brazil are Oil seeds.

17.________ involves the free flow of products and
factors of production between member countries, the True
adoption of a common external trade policy, a common
28.Establishment of the euro created the largest
currency, harmonization of members' tax rates, and a
currency zone in the world, replacing the position the
common monetary and fiscal policy.
U.S. dollar had held for decades.
An economic union
False
18.In a customs union, trade barriers are eliminated
29.NAFTA consists of 5 participating countries
among member countries, and each country maintains
its own external trade policies. False
False 30.Which of the following is true of ASEAN?
19.Why is the European Council said to be the ultimate It is slowly progressing toward establishing a free trade
controlling authority within the EU? zone.
Draft legislation from the commission can become EU 31.The ultimate controlling unit within the EU is the
law only if the council agrees.
Council of the European Union.
20.Which of the following occurs when lower-cost
external suppliers are replaced by higher-cost suppliers 32.The United States, Canada, and Mexico are member
within the free trade area? nations of
NAFTA. a free trade area

33.________ occurs when high-cost domestic producers QUIZ 4

are replaced by low-cost producers within the free
trade area. 1.Currency speculation typically involves the short-term
movement of funds from one currency to another in the
Trade creation hopes of profiting from shifts in exchange rates.
34.From least integrated to most integrated, the levels True
of economic integration are a:
2.It occurs when inflation rises to 10% or more.
free trade area, a customs union, a common market, an
economic union, and a political union. Galloping Inflation

35.Which of the following is a reason the European 3.A currency is said to be freely convertible when
Union is considered an imperfect economic union? both residents and nonresidents are allowed to
Not all members of the union have adopted the euro. purchase unlimited amounts of a foreign currency with
it.
36.Country A and Country B entered into a free trade
agreement recently. After this, Country A starts 4.Which of the following occurs when traders start
importing heavy machinery from Country B. Country A moving as a herd in the same direction at the same
previously imported such machinery at lower rates from time?
another country. Which of the following has occurred in bandwagon effect
this scenario?
5.Assume that the current exchange rate is €1 = $1.50.
trade diversion If you exchange 1,000 euros for dollars, you will receive

$1,500.

6.Which of the following is the most important foreign

37.The move toward economic union raises the issue of exchange trading center?
how to make a coordinating bureaucracy accountable London
to the citizens of member nations. Which of the
following offers a solution to this problem? 7.Currency ________ typically involves the short-term
movement of funds from one currency to another in the
a political union hopes of profiting from shifts in exchange rates.
38.The Council of the European Union is responsible for speculation
proposing EU legislation, implementing it, and
monitoring compliance with EU laws by member states. 8.Galloping inflation occurs when prices skyrocket by
more than 50% per month
False
False
39.Which treaty, signed in February 1992, committed EC
members to adopting a common currency by January 1, 9.It is a person or firm who arranges transactions
1999? between a buyer and a seller

the Maastricht Treaty Broker

40.Country X and Country Y reach an agreement to 10.Assuming the 30-day forward exchange rate was $1
boost bilateral trade. They agree to remove all barriers = 130 and the spot exchange rate was $1 = ×120, the
to the trade of goods and services. They, however, are dollar is selling at a ________ on the 30-day forward
free to determine their own trade policies with regard market.
to nonmembers. Which level of economic integration is
premium
this an example of?
11.Bandwagon is about assuming a claim that is true 22.Assuming that your country have this falling pressure
because many or most others believe on it. the remedy that you need to do is to sell your domestic
currency and buy foreign exchange currency.
True
False
12.________ draws on economic theory to construct
sophisticated econometric models for predicting 23.Carry trade is a kind of speculation that involves
exchange rate movements. borrowing in one currency where interest rates are low
and then using the proceeds to invest in another
Fundamental analysis
country where interests are high.
13.It occurs when prices rise slowly.
True
Creeping Inflation
24.Purchasing power parity theory states that given
14.The purchasing power parity (PPP) theory argues relatively efficient markets, the price of a "basket of
that the exchange rate will goods" should be

change if relative prices change. roughly equivalent in each country.

15.Floating Exchange rate is a system in which the 25.A pair of shoes costs £40 in Britain. An identical pair
interplay of the market forces of demand and supply costs $50 in the United States when the exchange rate
determine a currency's value. is £1 = $1.50. Which of the following is correct?

True The United States offers a better deal.

16.If the spot exchange rate is £1 = $1.50 when the 26.To reduce the value of the currency the government
market opens, and £1 = $1.48 at the end of the day, the needs to make the interest higher
pound has appreciated, and the dollar has depreciated.
False
False
27.This is the risk that a company faces when it's buying
17.The foreign exchange market converts the currency a product from a company located in another country
of one country into that of another country.
Transaction exposure
True
28.When a tourist goes to a bank in a foreign country to
18.Which of the following involves borrowing in one convert money into the local currency, the exchange
currency where interest rates are low, and then using rate used is the
the proceeds to invest in another currency where
spot rate.
interest rates are high?
29.Fixed exchange rate is a system in which the
carry trade
interplay of the market forces of demand and supply
19.A firm or individual that buys foreign exchange from determine a currency's value.
one party and then sells it to another party.
False
Foreign Exchange Dealer
30.A fixed exchange rate is one in which the value of a
20.It is the trading of one currency for another currency fluctuates in response to supply and demand

Choice not Given False

21.________ uses price and volume data to determine 31.To minimize the risk of an unanticipated change in
past trends, which are expected to continue into the exchange rates, a company can protect itself by
future. entering into a forward exchange contract.

Technical analysis True

32.The purchasing power parity (PPP) theory tells us
that a country with a high inflation rate will

see depreciation in its currency exchange rate.

33.The value of a currency is determined by the

interaction between the demand and supply of that
currency relative to the demand and supply of other
currencies.

True

34.Assume that the interest rate on borrowing in Japan

is 1 percent, while the interest rate on deposits in
Australian banks is 5 percent. A trader borrows in yen
and then converts the money into Australian dollars and
deposits it in an Australian bank to make a 4 percent
margin. Which type of trade is this an example of?

carry trade

35.The forex market is open 24 hours a day, seven days

a week

False

36.When prices increases by 2% or less every year, it

results to economic growth.

True

37.The ________ suggests that given relatively efficient

markets, the price of a "basket of goods" should be
roughly equivalent in each country.

purchasing power parity theory

38.An exchange rate of €1 = $1.30 indicates that

one euro buys 1.30 dollars.

39.Inflation occurs when

the quantity of money in circulation rises faster than the

stock of goods and services.

40.Parla liked to gamble, so she sometimes moved her

funds from dollars to euros in the hope that she would
make money based on the exchange rates. This
demonstrates a carry trade.

True