Test Bank For Global Business 3rd Edition Mike Peng

Chapter 1—Globalizing Business

TRUE/FALSE

1. A multinational enterprise is a firm that engages in foreign direct investment by directly managing value-added activities in other countries.

ANS: T PTS: 1 DIF: Difficulty: Easy
REF: p. 4 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

2. The term “emerging markets” refers to all markets other than the developed markets.

ANS: T PTS: 1 DIF: Difficulty: Easy
REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

3. Gross domestic product (GDP) is the sum of value added by resident firms, households, and governments operating in an economy.

ANS: T PTS: 1 DIF: Difficulty: Moderate
REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

4. Majority of the global GDP is contributed by the emerging markets.

ANS: F PTS: 1 DIF: Difficulty: Easy
REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

5. Purchasing power parity (PPP) is a conversion that determines the equivalent amount of goods and services different currencies can purchase.

ANS: T PTS: 1 DIF: Difficulty: Easy
REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

6. Purchasing power parity (PPP) is calculated as the sum of value added by resident firms, households, and governments operating in an economy.

ANS: F PTS: 1 DIF: Difficulty: Easy
REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

7. Emerging markets contribute about 26% of global GDP without adjusting for purchasing power parity (PPP).

ANS: T PTS: 1 DIF: Difficulty: Easy
REF: p. 7 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

8. More than half the GDP produced by emerging markets comes from outside the BRIC countries.

ANS: F PTS: 1 DIF: Difficulty: Easy
REF: p. 7 OBJ: LO: 1-1 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge