Chapter 3 Emphasizing Informal Institutions Cultures Ethics and Norms
TRUEFALSE
1. According to the institution-based view, informal institutions must be sought when formal
institutions fail.
(A) True
(B) False Answer : (A)
2. The cultural norms of a country is an example of an informal insti...
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
Answer : (A)
2. The term "emerging markets" refers to all markets other than the developed markets.
(A) True
(B) False
Answer : (A)
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
Answer : (A)
4. Majority of the global GDP is contributed by the emerging markets.
(A) True
(B) False
Answer : (B)
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
Answer : (A)
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
Answer : (B)
7. Emerging markets contribute about 30% of global GDP without adjusting for purchasing power
parity (PPP).
(A) True
(B) False
Answer : (A)
8. More than half the GDP produced by emerging markets comes from outside the BRIC countries.
(A) True
(B) False
Answer : (B)
9. On the global economic pyramid, the Triad refers to developed economies consisting of North
America, Western Europe, and Japan.
(A) True
(B) False
Answer : (A)
10. All the countries of the BRIC belong to the top tier of the global economic pyramid.
(A) True
(B) False
Answer : (B)
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
, Answer : (B)
12. The emerging markets of the world are placed at the top of the global economic pyramid.
(A) True
(B) False
Answer : (B)
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
Answer : (B)
14. The term "base of the pyramid" represents economies where individuals make less than $2,000 a
year.
(A) True
(B) False
Answer : (A)
15. Reverse innovations are innovations that are adopted first in the Triad-based multinationals and
then diffused around the world.
(A) True
(B) False
Answer : (B)
16. Reverse innovation is an example of bottom up innovation.
(A) True
(B) False
Answer : (A)
17. The Group of 20 includes the European Union (EU)-a regional bloc.
(A) True
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