TEST BANK For Global Business Today,
12th Edition By Charles Hill
Chapters 1 - 17
,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
GlobalizationTrue /
False Questions
1. As a result of globalization, we have been moving toward a world in which national
economiesare 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,
theglobalization of markets.
True False
4. As a result of globalization, companies rarely need to customize marketing strategies,
productfeatures, 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
thatserved 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
firmsto 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 theWorld 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
nationsthat 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
turmoiland 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 atreturning their troubled economies to stability and growth.
True False
13. Foreign direct investment (FDI) occurs when a firm invests resources in business
activitiesoutside its home country.
True False
14. After World War II, the advanced nations of the West committed themselves to
increasingbarriers 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
wellas manufactured goods.
True False
16. The lowering of trade and investment barriers allows firms to base production at the
optimallocation for that activity.
True False
17. As a result of international trade, the economies of the world’s nation-states are becoming
lessintertwined.
True False
18. The globalization of markets and production and the resulting growth of world trade,
foreigndirect 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
costsof shipping goods over long distances.
True False
20. While advances in telecommunications are creating a global audience,
advances intransportation are creating a global village.
True False
21. The real costs of information processing and communication have fallen dramatically in the
pasttwo 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
includedGermany, France, and the United Kingdom.
True False
24. The United States accounted for a significantly larger share of the world economy in 2011
than itdid 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
werelower.
True False
26. The stock of foreign direct investment refers to the total cumulative value of
foreigninvestments in a country.
True False
27. Throughout the 1990s, the amount of investment directed at both developed and
developingnations 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 andinvestment.
True False
30. The rise of the Internet is increasing the barriers that small firms face in building
internationalsales.
True False
31. Many of the former Communist nations of Europe and Asia seem to share a
commitment todemocratic policies and free market economies.
True False
32. In the past quarter century, the volume of cross-border trade and investment has been
growingless rapidly than global output.
True False
33. One concern frequently voiced by globalization opponents is that falling barriers to
internationaltrade 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 ofnational income enjoyed by unskilled workers, raising their living standards.
True False
35. One concern of globalization opponents is that it undermines the influence of
supranationalorganizations 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
pursuingretaliatory trade policies rather than free trade policies.
True False
38. A firm has to become a multinational enterprise, investing directly in operations in
othercountries, to engage in international business.
True False
39. Despite all the talk about the emerging global village, differences between countries
such ascultures and political systems are very profound and enduring.
True False
40. Differences among countries require that an international business vary its practices
country bycountry.
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
differentnations 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, butmarkets for consumer products.
E. A company has to be the size of a multinational giant, such as Citigroup or Coca-
Cola, tofacilitate, and benefit from, the globalization of markets.
1-8
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,
andcultural 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
replacesdiversity 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
particularcountry.
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 thelocal markets.
D. The volume of goods, services, and investment crossing national borders has expanded
at aslower rate than world output for more than half a century.
E. The most global of markets are not typically markets for consumer products as
significantdifferences in consumer tastes and preferences still exist among national markets.
47. Globalization results in a greater degree of across markets than would be
presentotherwise.
, A. regulatory control
B. diversity
C. homogeneity
D. administrative barrier
E. communism
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