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Global Business 4th Edition By Mike Peng (Test Bank)
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(Global Business 4e Mike Peng)(Test Bank, Correct Answer are marked with*)
Chapter 1
1. A multinational enterprise is a firm that engages in foreign direct
investment by directly investing in, controlling, and managing value-added
activities in other countries.
*a. True
b. False
2. The term “emerging markets” refers to all markets other than the developed
markets.
*a. True
b. False
3. Gross domestic product (GDP) is the sum of value added by resident firms,
households, and governments operating in an economy.
*a. True
b. False
4. Majority of the global GDP is contributed by the emerging markets.
a. True
*b. False
5. Purchasing power parity (PPP) is a conversion that determines the
equivalent amount of goods and services different currencies can purchase.
*a. True
b. False
6. Purchasing power parity (PPP) is calculated as the sum of value added
by resident firms, households, and governments operating in an economy.
a. True
*b. False
7. Emerging markets contribute about 30% of global GDP without adjusting
for purchasing power parity (PPP).
*a. True
b. False
8. More than half the GDP produced by emerging markets comes from outside
the BRIC countries.
, a. True
*b. False
9. On the global economic pyramid, the Triad refers to developed economies
consisting of North America, Western Europe, and Japan.
*a. True
b. False
10. All the countries of the BRIC belong to the top tier of the global economic
pyramid.
a. True
*b. False
11. The second tier of the global economic pyramid is made up of countries
with a per capita annual income of more than $20,000.
a. True
*b. False
12. The emerging markets of the world are placed at the top of the global
economic pyramid.
a. True
*b. False
13. The global economic pyramid does not represent countries that have a
per capita annual income of less than $2,000.
a. True
*b. False
14. The term "base of the pyramid" represents economies where individuals
make less than $2,000 a year.
*a. True
b. False
15. Reverse innovations are innovations that are adopted first in the
Triad-based multinationals and then diffused around the world.
a. True
*b. False
16. Reverse innovation is an example of bottom up innovation.
, *a. True
b. False
17. The Group of 20 includes the European Union (EU)—a regional bloc.
*a. True
b. False
18. Globalization has driven up the salaries of low-level jobs.
a. True
*b. False
19. An international premium is a significant pay raise awarded to expatriate
employees working abroad.
*a. True
b. False
20. New York has more Fortune Global 500 company headquarters than any other
city.
a. True
*b. False
21. Overall, the focus on firm performance around the globe defines the field
of global business more than anything else.
*a. True
b. False
22. An institution-based view suggests that the success and failure of firms
are enabled and constrained by business norms of the host nation.
*a. True
b. False
23. Formal institutions include laws, regulations, and rules.
*a. True
b. False
24. The institution-based view places emphasis on the external factors that
could affect a firm.
, *a. True
b. False
25. Focusing on a firm’s internal resources and capabilities is the main
emphasis of the resource-based view.
*a. True
b. False
26. Liability of foreignness is the inherent disadvantage experienced by
foreign firms in host countries because of their non-native status.
*a. True
b. False
27. Most opponents of globalization view globalization as a long-run
historical evolution since trade began.
a. True
*b. False
28. According to the pendulum view of globalization, globalization is a
relatively new phenomenon triggered by the information revolution of early
1990s.
a. True
*b. False
29. Scenario planning is a technique to prepare and plan exclusively for
high risk scenarios.
a. True
*b. False
30. Standardization of markets would lead to a state of semiglobalization.
a. True
*b. False
31. Semiglobalization is primarily caused by the practice of total
isolation.
a. True
*b. False
32. The current state of globalization around the world is that of
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