(Solution Manual) Instructor’s Manual Supply Chain Management: A Logistics Perspective | Complete with Answer Keys

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Chapter 01 Globalization Multiple Choice Questions 41. Since the collapse of communism at the end of the 1980s, the erstwhile communist nations have transformed their economies by globalizing their markets. This involves _____. A. regulating markets B. privatizing state -owned enterprises C. decreasing competition D. reducing foreign investment 42. Which of the following is a consequence of globalization? A. Decreasing interdependence between national economies B. Increasing outsourcing of services C. Differentiation of material culture D. Increase in barriers to cross -border trade 43. Which of the following has enabled globalization of markets? A. Differentiation amongst national markets B. Falling barriers to cross border trade C. Reduced homogeneity of material culture across the world D. Increased government ownership of factors of production 44. Which of the following factors hinders globalization of consumer goods market? A. National differences in tastes and preferences B. Higher production costs in developed nations C. Homogenization of material culture D. Increasing outsourcing of goods and services 45. Globalization of markets results in markets becoming _____. A. less interdependent B. less diverse C. more protected D. less competitive 46. A U.S. Investment firm, Fin -Smart, set up a customer service call center in India to take advantage of the lower labor costs. This is called _____. A. homogenizing markets B. vertical integration C. outsourcing D. horizontal integration 47. Early outsourcing efforts were primarily confined to _____. A. health care B. service activities C. technological research D. manufacturing activities 48. Which of the following is NOT an impediment that makes it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe? A. Reduced tariffs on imports of manufactur ed goods B. Government regulations C. Issues associated with economic and political risk D. Barriers to foreign direct investment 49. The General Agreement on Tariffs and Trade (GATT) was responsible for _____. A. protecting government owned enterprises B. policing the global marketplace C. limiting nuclear testing D. promoting environment friendly technology 50. The ______ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states. A. International Development Association B. World Bank C. International Court of justice D. World Trade Organization 51. The World Trade Organization promotes _____. A. lowering of barriers to cross -border trade and investment B. infrastructural development in poor nations through low -interest loans C. state ownership of major enterprises D. regulation of national economies 52. Which of the following is true about the International Monetary Fund? A. It is primarily responsible for policing the world trading system. B. It is seen as the lender of last resort to nation -states whose economies are in turmoil. C. It is responsible for establishing multinational treaties to govern the global business system. D. It was established to formulate a coordinated policy response to financial crises in developing nations. 53. The _____ was established on October 24, 1945, by 51 countries committed to preserving peace through international cooperation and collective security. A. World Trade Organization B. United Nations C. G20tx D. World Bank 54. The G20tx was originally established to _____. A. preserve peace through international cooperation and collective security B. maintain order in the international monetary system C. formulate a coordinated policy response to financial crises in developing nations D. manage, regulate, and police the global marketplace 55. _____ occurs when a firm exports goods or services to consumers in another country. A. International trade B. Foreign direct investment C. Inward investment D. Outsourcing 56. In late 2001, the WTO launched a new round of talks in Doha aimed at: A. helping member states to cope with financial crisis. B. further liberalization of the global trade and investment framework. C. protecting national economies from global competition. D. promoting higher standards of living in all member states. 57. Which of the following is NOT included in world merchandise trade? A. Manufactured goods B. Agricultural goods C. Services D. Mining products 58. _____ have/has the most to gain from reductions in agricultural tariffs and subsidies that are a part of the Doha agenda. A. The world's developed nations B. The world's poorer nations C. European nations D. The United States 59. Which of the following is NOT a consequence of the reduction in trade barriers and restrictions on FDI since 1950? A. Firms are dispersing parts of their production process to global locations to drive down production costs and increase product quality. B. The economies of the world's nation states are becoming more intertwined. C. Nations are becoming more independent of each other for important goods and services. D. The world has become significantly wealthier since 1950. 60. The financial crisis in the U.S. in 2009 was triggered by _____. A. the global hike in the price of crude oil B. the slowdown in U.S. imports C. the problems in the U.S. subprime mortgage lending market D. the artificial fixing of currency rate by China 61. _____ predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18 months. A. Keynes's Law B. Say's Law C. Moore's Law D. Sullivan Principles 62. Containerization allows: A. reduction of the time needed to get from one location to another. B. simplification of transshipment from one mode of transport to another. C. buyers and sellers to find each other easily. D. enterprises to coordinate and control a globally dispersed production system. 63. The relative decline of the United States in the share of world output and world exports reflects _____. A. an increase in the barriers to foreign trade in the U.S. B. the deepening of the global financial crisis C. the reduced industrialization in developing nations D. the growth in the economic development of the world economy 64. In the 1970s, many Japanese firms invested in North America and Europe: A. to avoid a highly competitive domestic market. B. to exploit high domestic tariff barriers. C. as a hedge against unfavorable currency movements. D. to take advantage of low labor costs. 65. What is the total cumulative value of foreign investments best referred to as? A. Accumulation of foreign shares B. Portfolio investments C. Stock of foreign direct investments D. Stock market investments 66. Throughout the 1990s, the amount of foreign direct investment directed at both developed and developing nations increased dramatically. This trend reflects: A. a slowdown in global economic activity. B. the increasing share of the U.S. in the total FDI stock. C. the decline in cross -border flows of foreign direct investment. D. the increasing internationalization of business corporations. 67. Which of the following countries has been the largest recipient of foreign direct investment and received about $60 billion to $100 billion a year in inflows in 2004 -2009? A. Brazil B. Russia C. India D. China 68. A multinational enterprise (MNE) is a firm that _____. A. exports its products to multiple countries B. has production units in more than two countries C. does most of its business on the Internet D. lists its securities on a public exchange 69. Which of these statements pertaining to cross -border FDI flows is true? A. There was a growth of FDI between 2004 and 2007. B. A slump in FDI from 1998 to 2000 was followed by a surge from 2001 to 2003. C. Among developing nations, the largest recipient of FDI has been Russia. D. The dramatic increase in FDI reflects the decreasing internationalization of business corporations. 70. Since the 1960s, which of the following has been a notable trend in the demographics of the multinational enterprise? A. The decline of multinational companies in the manufacturing sector B. The growth of government -owned multinational enterprises C. The decline of non -U.S. multinationals D. The growth of mini -multinationals 71. In the last two decades, Latin American countries like Brazil, Mexico, and Chile have _____. A. embraced communist principles B. promoted government ownership of enterprises C. experienced increasing debt and inflation D. welcomed foreign investment 72. Which of the following is a risk associated with globalization? A. Restrictions on competition B. Global financial contagion C. Excessive market regulation D. Differentiation of markets 73. Supporters of globalization maintain that the apparent decline in real wage rates of unskilled workers: A. is due to technological changes that create greater demand for skilled workers. B. is due to the migration of low -wage manufacturing jobs offshore. C. can be checked by increasing government ownership of enterprises. D. can be checked by limiting free trade and foreign investment. 74. A study published in 2011 by the OECD noted that: A. the real household income of the unskilled workers in the U.S. increased more in comparison to that of the skilled workers. B. in almost all countries real income levels declined over the 20 -year period studied. C. falling unemployment rates brought gains to low -wage workers and fairly broad -based wage growth. D. the gap between the poorest and richest segments of society in some OECD countries had widened. 75. A number of econometric studies have found consistent evidence of a hump -shaped relationship between income levels and pollution levels. According to this, as an economy grows and income levels rise: A. initially the pollution levels remain low B. after a while the pollution levels decrease C. the pollution levels also rise in proportion to the economic growth D. there is increasing industrialization which leads to greater pollution 76. NAFTA was passed only after: A. China agreed to establish a higher minimum wage. B. the U.S. agreed to limit the number of jobs that could be outsourced. C. Mexico committed to tougher enforcement of environmental protection regulations. D. Canada committed to establish new limits on FDI. 77. Globalization is criticized because it increases the power of _____. A. governments to own enterprises B. unskilled labor to form labor unions C. supranational organizations over nation -states D. nation-states to regulate markets and reduce competition 78. The World Trade Organization has estimated that the developed nations of the world can raise global economic welfare by $128 billion by: A. removing subsidies given to their agricultural producers. B. increasing tariff barriers to trade in agriculture. C. increasing outsourcing of manufacturing processes. D. reducing defence expenditure. 79. An international business, unlike a multinational enterprise, _____. A. needs to have manufacturing units in at least two foreign nations B. needs to manufacture products or provide services that target a global market C. need not customize its products to the requirements of national markets D. need not invest directly in operations in other countries 80. Which of the following statements is true about an international business? A. An international business needs to invest directly in operations in other countries. B. An international business needs to have homogenous practices across countries. C. An international business can be managed in the same way that a domestic business is managed. D. An international business must find ways to work within the limits imposed by government intervention. ch02 Student: ___________________________________________________________________________ 1.The two dimensions, according to which the political systems can be assessed, collectivism-individualism and democratic-totalitarian are independent of each other.    True    False   2.It is possible to have a democratic political system that emphasizes a mix of collectivism and individualism.    True    False   3.When collectivism is emphasized, an individual's right to do something may be restricted on the grounds that it runs counter to "the good of society."    True    False   4.Plato, to whom the advocacy of collectivism is traced back, did not equate collectivism with equality.    True    False   5.The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based.    True    False   6.The communists believed that socialism could be achieved by democratic means, and turned their backs on violent revolution and dictatorship.    True    False   7.The social democrats believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.    True    False   8.Modern socialists trace their intellectual roots to Karl Marx (1818-83), although socialist thought clearly predates Marx.    True    False   9.In an individualist society, the welfare of society is best served by letting people pursue their own economic self-interest.    True    False   10.Aristotle argued that individual diversity and private ownership are undesirable.    True    False   11.In practical terms, individualism translates into an advocacy for democratic political systems and market economics.    True    False   12.Most modern democratic states practice representative democracy.    True    False   13.In a totalitarian country, there are safeguards to protect an individual's right to freedom of expression, opinion, and organization.    True    False   14.It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged.    True    False  15.In a market economy, if demand for a product exceeds supply, prices will rise, signaling to producers to produce more.    True    False   16.The number of command economies has fallen dramatically since the demise of communism in the late 1980s.    True    False   17.The objective of the government in a command economy is to encourage free and fair competition between private producers.    True    False   18.In a command economy, enterprises have little incentive to control costs and be efficient, because they cannot go out of business.    True    False   19.In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.    True    False   20.A nation's legal system is usually of very little interest to international business managers, because international businesses are headquartered in different countries.    True    False   21.When law courts interpret common law, they do so with regard to tradition, precedent, and custom.    True    False   22.Judges under a civil law system have more flexibility than those under a common law system.    True    False   23.Judges in a common law system have the power to interpret the law so that it applies to the unique circumstances of an individual case.    True    False   24.Common law is primarily a moral rather than a commercial law and is intended to govern all aspects of life.    True    False   25.A theocratic law system is one in which the law is based on religious teachings.    True    False   26.The parties to an agreement normally resort to contract law when one party feels the other has violated either the letter or the spirit of an agreement.    True    False   27.Contracts under a civil law system tend to be very detailed with all contingencies spelled out.    True    False   28.Many of the world's larger trading nations, including Japan and the United Kingdom, have not ratified the United Nations Convention on Contracts for the International Sale of Goods (CIGS).    True    False   29.Property rights refer to the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.    True    False   30.To facilitate international business, property rights are defined in a consistent way across countries.    True    False   31.Property rights can be violated in two ways—through private action and through public action.    True    False  32.The Foreign Corrupt Practices Act does not allow for grease payments.    True    False   33.In the 1970s, the United States passed the Foreign Corrupt Practices Act which requires all publicly traded companies, whether or not they are involved in international trade, to keep detailed records that would reveal whether a violation of the act has occurred.    True    False   34.Patents, copyrights, and trademarks establish ownership rights over intellectual property.    True    False   35.Patents discourage companies from committing themselves to extensive basic research.    True    False   36.The Trade Related Aspects of Intellectual Property Rights, attempts to reduce intellectual property protections to enhance trade.    True    False   37.Product liability sets certain safety standards to which a product must adhere.    True    False   38.Product liability can be much lower if a product does not conform to required safety standards.    True    False   39.The political systems of a country raise ethical issues that have implications for the practice of international business.    True    False   40.The political, economic, and legal environments of a country influence the attractiveness of that country as a market or investment site.    True    False   41.Interdependent political, economic, and legal systems of a country make up its:    A. administrative agenda. B. socioeconomic fabric. C. cultural environment. D. political economy.   42.A political system that prioritizes the needs of the society over individual freedoms is called _____.    A. totalitarianism B. collectivism C. capitalism D. egalitarianism   43.Modern socialism has been popularized largely through the work of _____.    A. Adam Smith B. Karl Marx C. David Hume D. Thomas Hobbes   44.The ________ believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.    A. existentialists B. social democrats C. communists D. anarchists  45.In several Western democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to ________.    A. privatization B. nationalization C. liberalization D. socialization of production   46.Which of the following philosophies can be traced back to the ancient Greek philosopher Aristotle?    A. Socialism B. Individualism C. Collectivism D. Anarchism   47.The tenet of _____ is that the welfare of society is best served by letting people pursue their own economic self-interest.    A. socialism B. communism C. anarchism D. individualism   48.Which of the following statements about individualism is NOT true?    A. Individualism promotes private entrepreneurship. B. Individualism promotes free market economics. C. Individualism creates an anti-business environment. D. Individualism advocates for a democratic political system.   49.Which of the following is a feature of a democracy?    A. Exercise of absolute control by one person or political party. B. Governance by people or elected representatives. C. Prohibition of entry to opposing political parties. D. Complete restriction of individual political freedom.   50.Totalitarianism:    A.  refers to a political system in which government is by the people, exercised either directly or through elected representatives. B. is based on a belief that citizens should be directly involved in decision making. C.  is a form of government in which one person or political party exercises absolute control over all spheres of human life. D.  is based on the idea that the welfare of society is best served by letting people pursue their own economic self-interests.   51.Peoples' right to protest on issues of accountability in public expenditure would be possible in a _____ political set-up.    A. dictatorial B. democratic C. totalitarian D. fascist   52._____ refers to a state where political power is monopolized by a party, group, or individual that governs according to religious principles.    A. Representative democracy B. Theocratic totalitarianism C. Tribal anarchism D. Monotheistic communism  53.Which system of government generally permits some individual economic freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of communism?    A. Tribal totalitarianism B. Right-wing totalitarianism C. Democratic totalitarianism D. Theocratic totalitarianism   54.In a pure market economy:    A. all productive activities are owned by the state. B. production is determined by the interaction of supply and demand. C. collectivist goals are given priority over individual goals. D. the prices at which goods are sold is determined by the government.   55.An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a _____.    A. planned economy B. command economy C. closed economy D. market economy   56.Antitrust laws in the United States are designed to:    A. restrict agricultural subsidies. B. increase trade barriers. C. outlaw monopolies. D. restrict privatization.   57.In a(n) _____ economy the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold.    A. market B. command C. open economy D. laissez-faire   58.In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning.    A. market B. private C. command D. mixed   59.In which of the following economies would the government be most likely to take into state ownership troubled firms whose continued operation is thought to be vital to national interests?    A. Market economies B. Laissez-faire economies C. Liberal economies D. Mixed economies   60.Which of the following statements about the legal systems of countries is NOT true?    A. They can affect the attractiveness of a country as an investment site or market. B. They are influenced by the prevailing political system of the country. C. They are almost the same for all countries. D. They are of immense importance to international business.   61.Under the _____, cases are judged with reference to three characteristics: tradition, precedent, and custom.    A. theocratic law system B. civil law system C. contract law system D. common law system  62.A civil law system tends to be less adversarial than a common law system, since _____.    A. the judges' decisions are based on detailed legal codes B. the judges have the freedom to interpret laws based on the situation C. the judges' decisions are based on religious teachings D. the judges are guided by interpretations made in prior legal cases   63.A common law system is different from a civil law system because:    A.  a common law system is based on religious teachings, while a civil law system is based on cultural traditions. B. a common law system is very rigid, while a civil law system tends to be more flexible. C . in a common law system a judge relies on legal codes to make rulings, while in a civil law system a judge relies on his intuition and moral reasoning to make judgments. D . in a common law system a judge has the power to interpret the law, while in a civil law system a judge has the power only to apply the law.   64.A _____ system is based on a very detailed set of laws organized into codes.    A. traditional law B. theocratic law C. civil law D. common law   65.A theocratic law system is one in which the law is based on:    A. religious teachings. B. tradition, precedent, and custom. C. a detailed set of laws organized into codes. D. cultural and social norms.   66._____ is the collective term for the legal rights relating to the use to which a resource is put and over the use made of any income that may be derived from that resource.    A. Trade rights B. Property rights C. Positive rights D. Common rights   67.In Russia in the chaotic period following the collapse of communism, an outdated legal system, coupled with a weak police force and judicial system, allowed the Russian Mafia to demand "protection money" from business owners. Any business owner who rebelled had to face violent retribution. This violation of property rights exemplifies _____.    A. private action B. copyright violation C. infrastructural failure D. public liability   68.Violation of property rights done through legal mechanisms such as levying excessive taxation and requiring expensive licenses or permits from property holders is called ________.    A. private action B. collective action C. public action D. copyright violation   69.Which of the following areas of international trade is regulated by the Foreign Corrupt Practices Act?    A. Making and performance of commercial contracts in international trade. B. Preventing bribery and unethical acts in the conduct of international business. C. Establishing a set of safety standards to which a new product must adhere. D. Controlling the mafia activity that hinders trade in Russia, Japan, and the U.S.  70.Which of the following is NOT an example of intellectual property?    A. A music score B. A video game C. A software business D. A screenplay   71.A _____ grants the inventor of a new product or process exclusive rights for a defined period of time to the manufacture, use, or sale of that invention.    A. copyright B. trademark C. contract D. patent   72.Design and names by which merchants or manufacturers designate and differentiate their products are known as _____.    A. trademarks B. copyrights C. patents D. licenses   73.The Research and Development division of a company has recently designed a new coffee vending machine that is likely to sell very well in the market. It is compact, user-friendly, and provides unprecedented efficiency in terms of cost per cup. Consequently, the company fears that its competitors would soon mimic the design of their product and to protect its product, it is now seeking a _____ for the same.    A. copyright B. patent C. trademark D. certification   74.Which of the following provides exclusive legal rights to authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit?    A. Patents B. Copyrights C. Trademarks D. Licenses   75.The TRIPS agreement was designed to:    A. exclude China from all intellectual property agreements. B. oversee a much stricter enforcement of intellectual property regulations. C. hold a firm and its officers responsible when a product causes injury, death, or damage. D. support traded software and recorded property among developed markets.   76.Which of the following statements about the Trade Related Aspects of Intellectual Property Rights (or TRIPS) agreement is NOT true?    A.  It was designed to oversee enforcement of much stricter intellectual property regulations, beginning in 1995. B.  It obliged WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years. C. It directed rich countries to comply with its rules of intellectual property protection within five years. D.  It provided the very poorest countries 10 years to comply with its rules of intellectual property protection.   77.Safety standards to which a product must adhere are set by:    A. safety certifications. B. contract laws. C. product safety laws. D. product liability laws.  78.Why did Karl Marx criticize capitalism? Describe how he planned to correct those shortcomings.            79.Discuss collectivism. What ideals does the philosophy support? Where did the philosophy start? How does collectivism exist in the modern world?            80.What are state-owned companies? Why do they usually perform poorly?            81.Discuss individualism. Explain the key positions of the philosophy, it roots, and its role in the modern economy.            82.Compare and contrast a pure democracy and a representative democracy. Which type of democracy is more common today? Why?            83.How do countries with representative democracies ensure that their elected officials are held responsible for their actions?           84.Compare and contrast the four forms of totalitarianism.            85.Identify the three types of economic systems. How do these three types of economic systems differ from each other? How are they the same?            86.Discuss why there is inefficiency in a monopoly situation. What is the role of the government in such a situation?            87.Discuss the effects of private ownership of production in a market economy.            88.Why do command economies tend to stagnate?            89.What is a country's legal system? Why is it important to international businesses?           90.Explain the differences between common law and civil law systems by the approach of each to contract law.            91.What is the United Nations Convention on Contracts for the International Sale of Goods (CIGS)?            92.What is private action?            93.Discuss the ways in which public action to violate property rights can occur.            94.Discuss the Foreign Corrupt Practices Act.            95.Discuss the different ways to protect intellectual property.           96.What is product liability?            97.What are the factors that contribute to the attractiveness of a country as a market or investment site?