International Business: The New Realities 5th edition by S Tamer Cavusgil test bank
AACSB: Analytical Thinking
38) Which of the following is NOT an example of a cross-cultural risk factor?
A) negotiation patterns
B) decision-making styles
C) costs of production
D) ethical practices
Answer: C
Diff: 2: Moderate
Skill: Application
Objective: 1-2: Understand how international business differs from domestic business
AACSB: Analytical Thinking
39) Fluctuating exchange rates are an example of which of the following?
A) country risk
B) political risk
C) currency risk
D) cross-cultural risk
Answer: C
Diff: 1: Easy
Skill: Application
Objective: 1-2: Understand how international business differs from domestic business
AACSB: Analytical Thinking
Overseas Expansion (Scenario)
Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International Business, assigned a team of investigators to analyze the risks faced by the company in making this move. Of particular interest were the risks that might affect the success of a new production plant to be located in one of three potential countries.
40) Philip Baxter reported on the risks associated with establishing the plant in Country A. The most significant risk, in his view, was posed by the government's complex bureaucratic structure. Philip reported the likelihood of significant administrative delays in opening the plant. The risk identified by Philip is an example of which of the following?
A) country risk
B) commercial risk
C) currency risk
D) cross-cultural risk
Answer: A
Diff: 2: Moderate
Skill: Application
Objective: 1-2: Understand how international business differs from domestic business
AACSB: Analytical Thinking
41) LeShaun Golding researched the risks linked to establishing the plant in Country B. He cited government intervention, lack of local managerial talent, and unethical business practices as the most prominent risks for this location. LeShaun noted all of the following types of risks EXCEPT ________.
A) currency risk
B) political risk
C) country risk
D) cross-cultural risk
Answer: A
Diff: 2: Moderate
Skill: Application
Objective: 1-2: Understand how international business differs from domestic business
AACSB: Analytical Thinking
42) Rosa Suarez reported on her analysis of cross-cultural risks involved with establishing the plant in Country C. Each of the following was most likely discussed in her report EXCEPT ________.
A) language barriers
B) lifestyle differences
C) religious beliefs
D) the level of national debt
Answer: D
Diff: 2: Moderate
Skill: Application
Objective: 1-2: Understand how international business differs from domestic business
AACSB: Analytical Thinking
43) The level of government intervention in commercial activities is similar across most countries.
Answer: FALSE
Diff: 1: Easy
Skill: Concept
Objective: 1-2: Understand how international business differs from domestic business
AACSB: Analytical Thinking
44) Currency risk refers to the risk posed by adverse fluctuations in exchange rates.
Answer: TRUE
Diff: 1: Easy
Skill: Concept
Objective: 1-2: Understand how international business differs from domestic business