Test Bank For Global Business 3rd Edition by Mike W. Peng

,Chapter 1—Globalizing Business
x x




TRUE/FALSE

1. Axmultinationalxenterprisexisxaxfirmxthatxengagesxinxforeignxdirectxinvestmentxbyxdirectlyxmanagingx
value-addedxactivitiesxinxotherxcountries.

ANS:x T PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x4 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

2. Thextermx“emergingxmarkets”xrefersxtoxallxmarketsxotherxthanxthexdevelopedxmarkets.

ANS:x T PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x5 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

3. Grossxdomesticxproductx(GDP)xisxthexsumxofxvaluexaddedxbyxresidentxfirms,xhouseholds,xandx
governmentsxoperatingxinxanxeconomy.

ANS:x T PTS:x 1 DIF:
Difficulty:xModeratexREF:x p.x5 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

4. MajorityxofxthexglobalxGDPxisxcontributedxbyxthexemergingxmarkets.

ANS:x F PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x5 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

5. Purchasingxpowerxparityx(PPP)xisxaxconversionxthatxdeterminesxthexequivalentxamountxofxgoodsxandx
servicesxdifferentxcurrenciesxcanxpurchase.

ANS:x T PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x5 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

6. Purchasingxpowerxparityx(PPP)xisxcalculatedxasxthexsumxofxvaluexaddedxbyxresidentxfirms,xhouseholds,x
andxgovernmentsxoperatingxinxanxeconomy.

ANS:x F PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x5 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

7. Emergingxmarketsxcontributexaboutx26%xofxglobalxGDPxwithoutxadjustingxforxpurchasingxpowerxparityx
(PPP).

ANS:x T PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x7 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

,8. MorexthanxhalfxthexGDPxproducedxbyxemergingxmarketsxcomesxfromxoutsidexthexBRICxcountries.

, ANS:x F PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x7 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

9. Onxthexglobalxeconomicxpyramid,xthexTriadxrefersxtoxdevelopedxeconomiesxconsistingxofxNorthx
America,xWesternxEurope,xandxJapan.

ANS:x T PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x9 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

10. AllxthexcountriesxofxthexBRICxbelongxtoxthextopxtierxofxthexglobalxeconomicxpyramid.

ANS:x F PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x9 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

11. Thexsecondxtierxofxthexglobalxeconomicxpyramidxisxmadexupxofxcountriesxwithxaxperxcapitaxannualxi
ncomexofxmorexthanx$20,000.

ANS: F PTS:x x 1 DIF: Difficulty:xEasy
REF: p.x9 OBJ:x x LO:x1-1 NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

12. Thexemergingxmarketsxofxthexworldxarexplacedxatxthextopxofxthexglobalxeconomicxpyramid.

ANS: F PTS:x x 1 DIF: Difficulty:xEasy
REF: p.x9 OBJ:x x LO:x1-1 NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

13. Thexglobalxeconomicxpyramidxdoesxnotxrepresentxcountriesxthatxhavexaxperxcapitaxannualxincomexofxlessxt
hanx$2,000.

ANS:x F PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x9 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

14. Thextermx"basexofxthexpyramid"xrepresentsxeconomiesxwherexindividualsxmakexlessxthanx$2,000xaxyear.

ANS:x T PTS:x 1 DIF:
Difficulty:xEasyxREF:x p.x9 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

15. ReversexinnovationsxarexinnovationsxthatxarexadoptedxfirstxinxthexTriad-
basedxmultinationalsxandxthenxdiffusedxaroundxthexworld.

ANS:x F PTS:x 1 DIF:
Difficulty:xModeratexREF:x p.x9 OBJ:x LO:x1-1
NAT:x BUSPROG:xAnalytic
KEY:x Bloom's:xKnowledge

16. Reversexinnovationxisxanxexamplexofxbottomxupxinnovation.