Lesson 3.9.3
3.9.3 Assessing globalisation and internationalisation Quiz: AQA Business, Unit 9
20 questions
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Lesson 3.9.3, Assessing globalisation and internationalisation: 20 multiple choice questions for the AQA Business (7132), Unit 9: Strategic methods: how to pursue strategies, written with Revision Ninja.
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The 20 questions
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What is globalisation?
- A system in which a single government controls all of the production in every country in the world
- A policy under which each country restricts all trade with other nations to protect its own industries
- The increasing integration of national economies and markets through trade, investment and communication
- The movement of workers from rural areas to cities within a single country during the course of its growth
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What are emerging economies?
- Economies that are fully developed and have had no growth in output or income for many decades
- Economies that are growing rapidly, often industrialising, and becoming more important to global business
- Economies that only trade with one other country and have no contact with the wider world market
- Economies that have stopped growing and are now in a long period of decline with no new investment
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Which is a reason for the greater globalisation of business?
- Rising trade barriers across all major economies, which have restricted cross-border sales for many years
- A reduction in the number of countries trading with each other as a result of political isolation
- A decision by every government to close its borders to foreign investment and foreign trade
- Falling trade barriers and improvements in transport and communication technology
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Which method of entering an international market involves selling goods made at home to customers abroad?
- Licensing
- Exporting
- Strategic alliance
- Direct investment
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Which method involves allowing a foreign firm to use a business's intellectual property in return for royalties?
- Direct investment
- Licensing
- Exporting
- Off-shoring
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What is a strategic alliance as a method of entering international markets?
- A full takeover of a foreign firm, after which the acquirer becomes the sole owner of its operations
- A government agreement that limits the number of imported goods allowed into the home market
- A partnership with a foreign firm that shares resources and risks while keeping the partners legally separate
- A decision to sell products only through a single foreign distributor with no shared resources or investment
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What is direct investment as a method of entering a foreign market?
- Setting up or buying production or sales facilities in the foreign country, such as a subsidiary
- Selling goods through an agent who has no shares in the business and no permanent presence in the country
- Allowing a foreign firm to make the product in return for a royalty payment on each unit it sells
- Sending goods overseas through a freight company that handles the transport on behalf of the firm
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What is off-shoring?
- Importing raw materials from a foreign country and using them to make goods sold at home
- Moving production or services to another country, usually to reduce costs
- Bringing production back to the home country from overseas to shorten supply chains
- Selling goods to customers in a foreign country without any production taking place in that country
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What is re-shoring?
- Selling products only in the home market and stopping all exports to foreign customers each year
- Bringing production back to the home country after it had been moved overseas
- Setting up a new subsidiary in a foreign country that will supply goods to the home market
- Moving production to a different overseas country that has lower wages than the firm's current location
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What is a multinational business?
- A business that trades only through the internet and has no physical presence in any country
- A business that operates in several countries and manages production or sales across national borders
- A business that operates only in its home country but has customers in many foreign countries
- A business that is owned by a government and operates only in the public sector in one country
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A UK firm exports 10,000 units at 20 US dollars each, and 1 pound equals 1.25 dollars. What is the revenue in pounds?
- 160,000 pounds
- 125,000 pounds
- 250,000 pounds
- 200,000 pounds
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A firm can produce a product using labour costing 15 pounds an hour at home or 5 pounds an hour abroad. It uses 10,000 labour hours. What is the saving from off-shoring?
- 100,000 pounds
- 150,000 pounds
- 10,000 pounds
- 50,000 pounds
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Which factor is most likely to affect the attractiveness of an international market?
- The total number of countries that are members of the same football league in the region
- The colour of the national flag that appears on the packaging of goods sold in the market
- The average height of the population in the region where the business is considering setting up
- Market size and growth, together with political stability and trade barriers such as tariffs
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Which evaluation is most accurate of licensing compared with direct investment?
- Direct investment is always cheaper than licensing because it avoids any need for capital spending abroad
- Licensing and direct investment carry exactly the same level of risk and control in every foreign market
- Licensing is lower risk and capital-light, but the firm gives up control and a share of the revenue
- Licensing gives the firm full control of every foreign operation with no shared revenue or risk at all
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Which factors influence buying, selling and producing abroad?
- The weather in the home country, which has a direct effect on the costs of overseas production
- The number of employees in the firm's head office, which determines the cost of foreign sales
- The colour of the packaging used by the firm for its products in the home market only
- Exchange rates, cultural differences and local laws and regulations
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What is the pressure for local responsiveness in managing an international business?
- The need to adapt products, marketing and operations to the tastes and rules of each local market
- The need to avoid any contact with local customers, so that the firm can concentrate on its own operations
- The need to standardise every product across all countries so that a single global design is sold everywhere
- The need to reduce total costs by producing the same product in one location for all markets worldwide
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What is the pressure for cost reduction in managing an international business?
- The need to lower costs by standardising products and producing at scale in the most efficient locations
- The need to increase advertising in every market so that local customers become more aware of the brand
- The need to increase the number of local managers in each country so that decisions are made locally
- The need to adapt each product to local tastes so that each market receives a different product design
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Evaluate the trade-off between local responsiveness and cost reduction for a multinational.
- There is no trade-off because the same product is always the best choice for every country in the world
- Adapting to each market raises costs, but ignoring local needs may lose customers, so the firm must balance the two pressures
- Cost reduction always harms customers because global standardisation makes products worse for every market
- Local responsiveness always reduces costs because adapting products to each market is cheaper than standard designs
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Why are emerging economies important for a business's growth strategy?
- They offer rapidly growing demand and a rising middle class of consumers, alongside lower production costs in some cases
- They only buy from domestic suppliers and never import goods, which makes them impossible to enter
- They offer falling demand as populations decline and governments restrict all new foreign investment in each sector
- They have no consumers with any spending power, so businesses cannot sell goods to them in any quantity
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Evaluate the case for re-shoring production to the home country.
- It can improve quality control, shorten lead times and reduce some risks, but labour and other costs may be higher
- Re-shoring is illegal in most countries, so firms cannot bring any production back from overseas locations
- Re-shoring always lowers costs, because domestic labour is always cheaper than labour in any overseas location
- Re-shoring removes all risk, because a home-based firm faces no political or currency risks at all
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