Test Bank For Global 2nd Edition by Mike Peng

Chapter 1—Globalizing Business

TRUE/FALSE

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.

ANS: T PTS: 1 DIF: Moderate REF: pp. 4-5
OBJ: 1.1 NAT: AACSB: Tier 1 Analytic | Tier 2 Creation of Value

2. The terms international business (IB) and global business are synonymous.

ANS: F PTS: 1 DIF: Easy REF: p. 5
OBJ: 1.1 NAT: AACSB: Tier 1 Reflective Thinking | Tier 2 Strategy

3. The term international business always refers to business activities conducted abroad.

ANS: F PTS: 1 DIF: Difficult REF: p. 5
OBJ: 1.1 NAT: AACSB: Tier 1 Communication | Tier 2 Environmental Influences

4. Global business includes both international (cross-border) activities as well as domestic business activities.

ANS: T PTS: 1 DIF: Moderate REF: p. 5
OBJ: 1.1 NAT: AACSB: Tier 1 Reflective Thinking | Tier 2 Environmental Influences

5. Emerging markets contribute about 25% of global GDP when adjusted for purchasing power parity, PPP.

ANS: F PTS: 1 DIF: Moderate REF: pp. 5-6
OBJ: 1.1 NAT: AACSB: Tier 1 Analytic | Tier 2 Environmental Influences

6. The term “base of the pyramid” represents economies in which individuals make less than $2,000 a year.

ANS: T PTS: 1 DIF: Easy REF: p. 6
OBJ: 1.1 NAT: AACSB: Tier 1 Reflective Thinking | Tier 2 Environmental Influences

7. The greatest number of opportunities for global businesses is opened at the “top of the pyramid,” where individuals have the greatest purchasing power.

ANS: F PTS: 1 DIF: Moderate REF: p. 6
OBJ: 1.1 NAT: AACSB: Tier 1 Analytic | Tier 2 Creation of Value

8. Most top managers of large firms lack significant global competence.

ANS: F PTS: 1 DIF: Easy REF: p. 7
OBJ: 1.2 NAT: AACSB: Tier 1 Reflective Thinking | Tier 2 Strategy