Test Bank For Global Business Today, 8th Edition

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1-1Chapter 01GlobalizationTrue / False Questions1.As a result of globalization, we have been moving toward a world in which national economiesare relatively self-contained entities.TrueFalse2.By offering the same basic productworldwide, firms help to create a global market.TrueFalse3.A company has to be the size of a multinational giant to facilitate, and benefit from, theglobalization of markets.TrueFalse4.As a result ofglobalization, companies rarely need to customize marketing strategies, productfeatures, and operating practices in different countries.TrueFalse5.Globalization has resulted ingreater uniformity replacing diversity across nationalmarkets.TrueFalse6.Asfirms follow each other around the world, they bring with them many of the assets that servedthem well in other national markets. Thus, greater diversity replaces uniformity.TrueFalse7.Substantial impediments, such as barriers to foreign direct investment, make it difficult for firms toachieve the optimal dispersion of their productive activities to locations around the globe.TrueFalse

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1-28.The World Trade Organization, the International Monetary Fund and its sister institution the WorldBank, and the United Nations were allcreated by voluntary agreement between individual nation-states.TrueFalse9.The International Monetary Fund and the World Bank were both created in 1944 by 44 nationsthat met at Bretton Woods, New Hampshire.TrueFalse10.The WTO is seen as the lender of last resort to nation-states whose economies are in turmoil andwhose currencies are losing value against those of other nations.TrueFalse11.The IMF is lesscontroversial than its sister institution, the World Bank.TrueFalse12.In return for loans, the IMF requires nation-states to adopt specific economic policies aimed atreturning their troubled economies to stability and growth.TrueFalse13.Foreign direct investment (FDI) occurs when a firm invests resources in business activitiesoutside its home country.TrueFalse14.After World War II, the advanced nations of the West committed themselves to increasingbarriersto the free flow of goods, services, and capital between nations.TrueFalse15.The Uruguay Round, held under the umbrella of GATT, extended GATT to cover services as wellas manufactured goods.TrueFalse16.The lowering of trade and investment barriers allows firms to base production at the optimallocation for that activity.TrueFalse17.As a result of international trade, the economies of the world’s nation-states are becominglessintertwined.TrueFalse

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1-318.Theglobalization of markets and production and the resulting growth of world trade, foreign directinvestment, and imports all imply that firms are finding it easier to protect themselves fromtheattack of foreign competitors.TrueFalse19.Containerization has revolutionized the transportation business, significantly lowering the costs ofshipping goods over long distances.TrueFalse20.While advances in telecommunications are creating a global audience, advances in transportationare creating a global village.TrueFalse21.The real costs of information processing and communication have fallen dramatically in the pasttwo decades.TrueFalse22.The Internet has been a major force facilitatinginternational trade in services.TrueFalse23.Countries that markedly increased their share of world output from 1960 to 2010 includedGermany, France, and the United Kingdom.TrueFalse24.The United States accounted for a significantly larger share of the world economy in 2011 than itdid in the 1960's.TrueFalse25.Beginning in the 1970s, European and Japanese firms began to shift labor-intensivemanufacturing operations from developing nations to their home countrieswhere labor costs werelower.TrueFalse26.The stock of foreign direct investment refers to the total cumulative value of foreign investmentsin a country.TrueFalse

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1-427.Throughout the 1990s, the amount of investment directed at both developed and developingnations increased dramaticallyTrueFalse28.Among developing nations, the largest recipient of foreign direct investment has been China.TrueFalse29.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.TrueFalse30.The rise of the Internet is increasing the barriers that small firms face in building internationalsales.TrueFalse31.Many of the former Communist nations of Europe and Asia seem to share a commitment todemocratic policies and free market economies.TrueFalse32.In the past quarter century, the volume of cross-border trade and investment has been growingless rapidly than global output.TrueFalse33.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 andwestern Europe.TrueFalse34.It is possible that economic growth in developed nations has offset the fall in the share of nationalincome enjoyed byunskilled workers, raising their living standards.TrueFalse35.One concern of globalization opponents is that it undermines the influence of supranationalorganizations and promotes the sovereignty of individual nation-states.TrueFalse36.In general, as countries get richer, they enact tougher environmental and labor regulations.TrueFalse

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1-537.Highly indebted poor countries (HIPCs) can bootstrap themselves out of poverty by pursuingretaliatory trade policies ratherthan free trade policies.TrueFalse38.A firm has to become a multinational enterprise, investing directly in operations in other countries,to engage in international business.TrueFalse39.Despite all the talk about the emerging global village, differences between countries such ascultures and political systems are very profound and enduring.TrueFalse40.Differences among countries require that an international business vary its practices country bycountry.TrueFalseMultiple Choice Questions41.Which of the following has reduced as a result of globalization?A.Volume of goods and services crossing national bordersB.Foreign exchange transactionC.Procuring product inputs from all over the worldD.Differences in material culture between national economiesE.Deregulation of markets42._____ refers to the shift toward a more integrated and interdependent world economy.A.Forward integrationB.Mass customizationC.GlobalizationD.CommercializationE.Vertical integration

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1-643.Which of the following statements is true regardingthe 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, firmsfail to create a global market.C.There still existsignificant differences among national markets along many relevantdimensions, including distribution channels, culturally embedded value systems, and legalregulations.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 Citigroupor Coca-Cola, tofacilitate, and benefit from, the globalization of markets.44.Automobile companies promote different car models in different countries depending on a rangeof factors such as demographics, local taste, local fuel costs, income levels, traffic congestion,and cultural values. This most likelydemonstrates that:A.significant differences still exist among national markets.B.cultural diversity has been replaced by global uniformity.C.theglobal 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.thesocial 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.MicroprocessorsB.Fast food like hamburgersC.Clothes and accessoriesD.Bank and other personal servicesE.Household furnishings

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1-746.Which of the following statements best supports the claim that greater uniformity replacesdiversity in thecontext of global markets?A.Differences in business systems and legal regulations, lead companies to customize theirmarketing strategies, product features, and operating practices to best match conditions in aparticular country.B.As rival global firms follow each other across countries, they bring with them their brandnames, products, and marketing strategies from other national markets, thus creatinghomogeneity 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 controlB.diversityC.homogeneityD.administrative barrierE.communism48.The _____ refers to the sourcing of goods and services from locations around the globe to takeadvantage of nationaldifferences in the cost and quality of factors such as labor, energy, land,and capital.A.globalization of marketsB.augmentation of productsC.amplification of productionD.globalization of productionE.capitalization of markets

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1-849.Which of the following best illustrates theglobalization of production?A.Daily Diamonds Inc. buys diamonds from South Africa and exports them to India for the cuttingprocess.B.Evan Swan, a U.S. based fashion designer, is planning to open a flagship store in China toserve the Asian market.C.Uncle Crab, a UKfast food chain, has been serving customers worldwide through itsfranchises.D.Silver Unicorn Inc. uses sales personnel from the respectivehost country to sell its productsand services.E.Pizza Gallery, an Italian pizza chain, customizes itspizzas and pastas to suit the tastes of itsAmerican and Australian customers.50.WestElectronicCorporation sources goods and services for its electronics products from differentlocations around the globe in an attempt to take advantage of differences in the cost and qualityof labor and land. This practice demonstratesthe:A.globalization of production.B.localization of markets.C.increasing differences in tastes and preferences of consumers across the world.D.nationalization ofprivate enterprises.E.riseof communism throughout the globe.51.Which of the following statements is most likely to be true of outsourcing?A.Dispersing value-creation activities through outsourcingtends to increase the costs requires todevelopa product offering.B.In today's world, outsourcing efforts are primarily confined to manufacturing activities, and donot include service activities.C.Outsourcing production to foreign countries increases the chance for companies to gainsignificant orders for their products from those countries.D.Outsourcing always increases the time required to develop a product, and allowsnomanufacturing flexibility.E.A multinational company cannot customize its products for local markets of different countriesif it outsources its production activities.

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1-952.A software company uses engineers in India to perform maintenance functions on softwaredesigned in the United States, and italso uses Indian accountants to compile tax returns.According to this information, the U.S. based company is most likely using:A.outsourcing.B.job sharing.C.job rotation.D.franchising.E.apprenticeship.53.Early outsourcing efforts were primarily confined to _____.A.accounting activitiesB.manufacturing activitiesC.healthcare servicesD.educational activitiesE.consulting services54.Which ofthe following reasons has made outsourcing of service activities to low-cost producers inother nations possible?A.Increasing diversity in material culture among national marketsB.Government regulations limiting certain service activities in the home countryC.Increasing foreign competition in manufacturing industriesD.Rise in communism globallyE.Use of modern communications technology55._____ isan international treaty that committed signatories to lowering barriers tothe free flow ofgoods across national borders and is the predecessor to the World Trade Organization.A.North American Free Trade AgreementB.Commonwealth of Independent States Free Trade AgreementC.Kyoto protocolD.General Agreement on Tariffs and TradeE.Agreement on Trade-Related Aspects of Intellectual Property Rights

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1-1056.The globalization of production mainly occurs due to the:A.growing cultural homogeneity across markets.B.increasingdifferences in the tastes and preferences of consumers in different nations.C.national differences in the cost and quality of factors such as labor, energy, land, and capital.D.rise in communism the world over.E.increasingworldwide demand for unskilled workers.57.The World Bank was primarily created in 1944 to:A.preserve peace through international cooperation and collective security.B.promote economic development.C.renderjudgments on disputes submitted to it by member states.D.furnish advisory opinions on questions referred to it by authorized bodies.E.promote respect for human rights.58.In 1944, the IMF was established to:A.maintainorder in the international monetary system.B.preserve peace through international cooperation and collective security.C.promote respect for human rights.D.controlthe fossil-fuel emissions of the member states by imposing monetary fines.E.formulate a coordinated policy response to financial crises in developing nations.59.Which of the following is an argument put forth by critics of the IMF?A.It increases barriers to the free flow of goods and investmentacross national borders.B.It only provides assistance to developing nations and completely ignores the developednations.C.It is not powerful enough to ensure that the nation-states adhere to the rules laid down in tradetreaties.D.It promotes the rise of communism across the globe.E.It usurps the sovereignty of nation-states by telling governments what economic policies theymust adopt.

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1-1160.The _____ was established in 1945 by 51 countries committed to preserving peace throughinternational cooperation and collective security.A.Greenpeace organizationB.Amnesty InternationalC.League of NationsD.United NationsE.G-2061.The _____is the less controversial sister institution of the IMF which was created along with theIMF in 1944.A.G-20B.International Court of JusticeC.League of NationsD.World Trade OrganizationE.World Bank62.According to the UN Charter, one of the four purposesof the UN is to:A.bea center for harmonizing the actions of nations.B.encourage member-nations to increase trade barriers.C.provideinterest-free loans to poor countries to implement infrastructure projects.D.promote the creation of regional free trade agreements.E.spread communism worldwide.63.The G20 comprises the _____ of the 19 largest economies in theworld, plus representatives fromthe European Union and the European Central Bank.A.finance ministers and central bank governorsB.presidents and defense ministersC.prime ministers and army chiefsD.international trade ministersE.ministers of foreign affairs

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1-1264.The _____ was originally establishedin 1999 to formulate a coordinated policy response tofinancial crises in developing nations.A.United NationsB.G-20C.World Trade OrganizationD.International Court of JusticeE.World Bank65.In 2008-09, the G20 primarily worked to:A.address the concerns for human rights in sweatshops.B.formulatepolicies to counter hunger and poverty in underdeveloped nations of the world.C.provide a forum to launch a coordinated policy response to the global financial crisis.D.helpcreate a unified action plan to counter the threat of global terrorism.E.render judgments on patent disputes submitted to it by member-states.66.Which of the following is a macro factor underlyingthe trend toward greaterglobalization?A.Rise of communism across the globeB.Increasing nationalization of private organizationC.Increasing diversity in the tastes and preferences of consumers in different nationsD.Increasing traderegulations across the globeE.Dramatic developments in recent years in information processing and other technologies67.Which of the following best exemplifies foreign direct investment (FDI)?A.Pure Pearls, a jewelry store in the U.S., imports harvestedpearls from Indonesia, Philippines,and Australia.B.Chivalry, a U.S. based phone manufacturing company, has set up its ownassembly plant inJapan to cater to the needs of the Asian market.C.Delicate Love, a reputed florist company in Holland, exports tulips and roses throughout theglobe.D.Samantha started an Italian restaurant in her home country, the United States, after she tookcooking lessons from a reputed chef in Italy.E.Yin and Yang Inc., a Chinese firm, supplies buttons and zips to major denim brands in the UK.

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1-1368.Michelle, an Italianfashion designer, sells her merchandise by exporting them to the U.S., UK,and Brazil. According to thisinformation, Michelle is most likelyinvolved in:A.foreign direct investment.B.foreign institutional investment.C.international trade.D.cross-border bartering.E.outsourcing.69.If in the present time, anInternationalcompany decides to do business with the formerCommunist nations of Europe and Asia it would most likely benefit fromthe:A.host of export and investment opportunities presentedby these countries.B.low business risks involved in doing business with these countries.C.authoritarian governments of these nations.D.highly developed economies of these countries.E.highlystable political and economic conditions in these countries.70.For foreign direct investment (FDI) to occur, a firm should primarily:A.conductcross-border bartering with neighboring countries.B.invest resources in business activities outside its home country.C.export goods or services to consumers in another country.D.importgoods or services from producers in another country.E.erect formidable barriers to international trade.71.Gem Globe, an American company, has invested substantial capital in precious stonesminingactivities outside the United States.This practice is referred to as:A.unrelated diversification.B.foreign direct investment.C.cross-border bartering.D.organizational divestment.E.international cartel.

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1-1472.When a firm invests resources in businessactivities outside its home country, itis referred to as:A.foreign exchange.B.foreign divestiture.C.speculative investment.D.foreign direct investment.E.cross-border cartel.73.The motive behind the hightariffs imposed by nations on imports of manufactured goods, prior toWorld War II, was to:A.deter any possible attempts to promote communism.B.protectdomestic industries from foreign competition.C.prevent the occurrence of the Great Depression.D.safeguard patents, copyrights, and trademarks.E.promotethe trade of services over the trade of manufactured goods.74.The advanced industrial nations of the West committed themselves after World War II toremoving barriers to the free flow of goods, services, and capital between nations. This goalwasenshrined in the:A.Inter-American Treaty of Reciprocal Assistance.B.Comprehensive Economic Partnership Agreement.C.General Agreement on Tariffs and Trade.D.North American Free Trade Agreement.E.United Nations charter.75.Which of the following reasons contributed to the Great Depression of the 1930s?A.Inability to meet the increasing world demand for productsB.Several countries accepting General Agreement on Tariffs and TradeC.Increasing attack from foreign competitors on domestic industriesD.Privatization of state-owned organizationsE.Countries progressively raising trade barriers against each other

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1-1576.Which of the following organizations wasestablished at the 1993 Uruguay Round?A.World Trade OrganizationB.International Court of JusticeC.International Trade Enforcement AgencyD.United NationsE.World Bank77.The 1993 Uruguay Round:A.increased thetrade and investmentbarriers.B.excluded the trade of services from international trade.C.transformed the World Trade Organization into theGATT.D.providedenhanced protection for patents, trademarks, and copyrights.E.promoted the worldwide rise of communism.78.Which of the following is a part of the agenda of the Doha Round of talks launched by the WTO?A.Limiting the use of antidumping lawsB.Abolishing the International Monetary FundC.Increasing tariffs on industrial goods, services, and agricultural productsD.Persuading member governments to cut defense spendingE.Establishing GATT as a replacement for the WTO79.Which of the following would be the biggest gain for the world's poor nations from the 2001 DohaWTO talks?A.Gain from increasing barriers to cross-border investmentB.Gain from reduced agricultural tariffs and subsidiesC.Gain from expanding the use of antidumping lawsD.Gain from the promotion of communism across the globeE.Gain from increased protectionism in the markets of the developed world80.The lowering of trade and investment barriers:A.protects domestic industries from foreign competition.B.was not an agenda of the Uruguay Round.C.allowsfirms to base production at optimal locations outside their home country.D.creates an unfavorable environment for FDI.E.caused the Great depression of the 1930s.

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