TEST BANK
Global Business Today, 12th Edition
by Charles Hill, Chapters 1 - 17
,Table of Contents
Chapter One Globalization
PART TWO National Differences
Chapter Two National Differences in Political, Economic, and Legal Systems
Chapter Three National Differences in Economic Development
Chapter Four Differences in Culture
Chapter Five Ethics, Corporate Social Responsibility, and Sustainability
PART THREE The Global Trade and Investment Environment
Chapter Six International Trade Theory
Chapter Seven Government Policy and International Trade
Chapter Eight Foreign Direct Investment
Chapter Nine Regional Economic Integration
PART FOUR The Global Monetary System
Chapter Ten The Foreign Exchange Market
Chapter Eleven The International Monetary System
PART FIVE The Strategy of International Business
Chapter Twelve The Strategy of International Business
Chapter Thirteen Entering Developed and Emerging Markets
PART SIX International Business Functions
Chapter Fourteen Exporting, Importing, and Countertrade
Chapter Fifteen Global Production and Supply Chain Management
Chapter Sixteen Global Marketing and Business Analytics
Chapter Seventeen Global Human Resource Management
,Answers are at the end of each chapter
Chapter 01 Globalization
True / False Questions
1. As a result of globalization, we have been moving toward a world in which national economies are
relatively self-contained entities.
True False
2. By offering the same basic product worldwide, firms help to create a global market.
True False
3. A company has to be the size of a multinational giant to facilitate, and benefit from, the
globalization of markets.
True False
4. As a result of globalization, companies rarely need to customize marketing strategies, product
features, and operating practices in different countries.
True False
5. Globalization has resulted in greater uniformity replacing diversity across national markets. True
False
6. As firms follow each other around the world, they bring with them many of the assets that
served them well in other national markets. Thus, greater diversity replaces uniformity.
True False
7. Substantial impediments, such as barriers to foreign direct investment, make it difficult for firms to
achieve the optimal dispersion of their productive activities to locations around the globe.
True False
8. The World Trade Organization, the International Monetary Fund and its sister institution the
World Bank, and the United Nations were all created by voluntary agreement between individual nation-
states.
True False
,9. The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that
met at Bretton Woods, New Hampshire.
True False
10. The WTO is seen as the lender of last resort to nation-states whose economies are in turmoil and
whose currencies are losing value against those of other nations.
True False
11. The IMF is less controversial than its sister institution, the World Bank.
True False
12. In return for loans, the IMF requires nation-states to adopt specific economic policies aimed at
returning their troubled economies to stability and growth.
True False
13. Foreign direct investment (FDI) occurs when a firm invests resources in business activities
outside its home country.
True False
14. After World War II, the advanced nations of the West committed themselves to increasing
barriers to the free flow of goods, services, and capital between nations.
True False
15. The Uruguay Round, held under the umbrella of GATT, extended GATT to cover services as well
as manufactured goods.
True False
16. The lowering of trade and investment barriers allows firms to base production at the optimal
location for that activity.
True False
17. As a result of international trade, the economies of the world’s nation-states are becoming less
intertwined.
True False
18. The globalization of markets and production and the resulting growth of world trade, foreign
direct investment, and imports all imply that firms are finding it easier to protect themselves from
the attack of foreign competitors.
,True False
19. Containerization has revolutionized the transportation business, significantly lowering the costs of
shipping goods over long distances.
True False
20. While advances in telecommunications are creating a global audience, advances in
transportation are creating a global village.
True False
21. The real costs of information processing and communication have fallen dramatically in the past two
decades.
True False
22. The Internet has been a major force facilitating international trade in services.
True False
23. Countries that markedly increased their share of world output from 1960 to 2010 included
Germany, France, and the United Kingdom.
True False
24. The United States accounted for a significantly larger share of the world economy in 2011 than it did
in the 1960's.
True False
25. Beginning in the 1970s, European and Japanese firms began to shift labor-intensive
manufacturing operations from developing nations to their home countries where labor costs were
lower.
True False
26. The stock of foreign direct investment refers to the total cumulative value of foreign
investments in a country.
True False
27. Throughout the 1990s, the amount of investment directed at both developed and developing
nations increased dramatically
True False
,28. Among developing nations, the largest recipient of foreign direct investment has been China.
True False
29. Although most international trade and investment is still conducted by large firms, many
medium- size and small businesses are becoming increasingly involved in international trade and
investment.
True False
30. The rise of the Internet is increasing the barriers that small firms face in building international
sales.
True False
31. Many of the former Communist nations of Europe and Asia seem to share a commitment to
democratic policies and free market economies.
True False
32. In the past quarter century, the volume of cross-border trade and investment has been growing less
rapidly than global output.
True False
33. One concern frequently voiced by globalization opponents is that falling barriers to international
trade destroy manufacturing jobs in wealthy advanced economies such as the United States and western
Europe.
True False
34. It is possible that economic growth in developed nations has offset the fall in the share of
national income enjoyed by unskilled workers, raising their living standards.
True False
35. One concern of globalization opponents is that it undermines the influence of supranational
organizations and promotes the sovereignty of individual nation-states.
True False
36. In general, as countries get richer, they enact tougher environmental and labor regulations.
,True False
37. Highly indebted poor countries (HIPCs) can bootstrap themselves out of poverty by pursuing
retaliatory trade policies rather than free trade policies.
True False
38. A firm has to become a multinational enterprise, investing directly in operations in other
countries, to engage in international business.
True False
39. Despite all the talk about the emerging global village, differences between countries such as
cultures and political systems are very profound and enduring.
True False
40. Differences among countries require that an international business vary its practices country by
country.
True False
Multiple Choice Questions
41. Which of the following has reduced as a result of globalization?
A. Volume of goods and services crossing national borders
B. Foreign exchange transaction
C. Procuring product inputs from all over the world
D. Differences in material culture between national economies
E. Deregulation of markets
42. refers to the shift toward a more integrated and interdependent world economy.
A. Forward integration
B. Mass customization
C. Globalization
D. Commercialization
E. Vertical integration
43. Which of the following statements is true regarding the globalization of markets?
,A. As a result of the globalization of markets, tastes and preferences of consumers in different
nations are beginning to differ more.
B. By offering the same basic product worldwide, firms fail to create a global market.
C. There still exist significant differences among national markets along many relevant dimensions,
including distribution channels, culturally embedded value systems, and legal regulations.
D. The most global of markets are not typically markets for industrial goods and materials, but
markets for consumer products.
E. A company has to be the size of a multinational giant, such as Citigroup or Coca-Cola, to
facilitate, and benefit from, the globalization of markets.
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44. Automobile companies promote different car models in different countries depending on a range of
factors such as demographics, local taste, local fuel costs, income levels, traffic congestion, and cultural
values. This most likely demonstrates that:
,A. significant differences still exist among national markets.
B. cultural diversity has been replaced by global uniformity.
C. the global market is less complex than national markets.
D. a company does not have to be the size of a multinational giant to facilitate, and benefit from, the
globalization of markets.
E. the social norms in a country do not affect purchase decisions of consumers.
45. Which of the following is most likely to be the best suited product for a global market?
A. Microprocessors
B. Fast food like hamburgers
C. Clothes and accessories
D. Bank and other personal services
E. Household furnishings
46. Which of the following statements best supports the claim that greater uniformity replaces
diversity in the context of global markets?
A. Differences in business systems and legal regulations, lead companies to customize their marketing
strategies, product features, and operating practices to best match conditions in a particular country.
B. As rival global firms follow each other across countries, they bring with them their brand names,
products, and marketing strategies from other national markets, thus creating homogeneity across markets.
C. Truly innovative companies succeed by developing products that serve specific needs of the
local markets.
D. The volume of goods, services, and investment crossing national borders has expanded at a
slower rate than world output for more than half a century.
E. The most global of markets are not typically markets for consumer products as significant
differences in consumer tastes and preferences still exist among national markets.
47. Globalization results in a greater degree of across markets than would be present
otherwise.
, A. regulatory control
B. diversity
C. homogeneity
D. administrative barrier
E. communism
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