Test Bank for International Management:
Culture, Strategy, and Behavior, 11th
Edition, Fred Luthans, Jonathan Doh
1-1
, Chapter 01
Globalization and International Linkages
True/False Questions
1. Internationalization is the vision of creating one world unit, a single market entity.
Answer: False
Feedback: Internationalization is the process of a business crossing national and cultural
borders, while globalization is the vision of creating one world unit, a single market entity.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
2. In the context of the changing global demographics, elderly populations spend money on
housing and other capitally financed purchases.
Answer: False
Feedback: While elderly populations spend money on health care services, younger
populations spend income on housing and other capitally financed purchases.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
3. North American Free Trade Agreement (NAFTA) members are better integrated as a
single market than the European Union (EU) or the allied Asian countries.
Answer: False
Feedback: Even though long-standing cultural differences remain, and the European Union
has recently experienced some substantial challenges, the European Union is more integrated
as a single market than NAFTA, CAFTA, or the allied Asian countries.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
4. General Electric (GE) has strategically leveraged social media to improve its long-term
brand image.
Answer: True
Feedback: General Electric (GE) has strategically leveraged social media to improve its long-
term brand image. By interacting daily with customers across a variety of social networks, the
100-year-old company aims to transform the way that its brand is perceived while
simultaneously building a new generation of consumers.
1-2
,AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: An Interconnected World
5. An increase in the ease of travel between countries is an important development that has
occurred because of the North American Free Trade Agreement (NAFTA).
Answer: True
Feedback: An increase in the ease of travel between countries is an important development
that has occurred because of the North American Free Trade Agreement (NAFTA). Other
important developments include the elimination of tariffs as well as import and export quotas,
the opening of government procurement markets to companies in Canada and Mexico, an
increase in the opportunity to make investments in each other’s country, and the removal of
restrictions on agricultural products, auto parts, and energy goods.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
6. According to a Goldman Sachs global economics team report, it is estimated that the
economies of Brazil, Russia, India, and China, which it collectively coined as the "BRIC"
nations, will surpass the collective economies of the G7 nations by 2032.
Answer: True
Feedback: According to a Goldman Sachs global economics team report, it is estimated that
the economies of Brazil, Russia, India, and China, which it collectively coined as the "BRIC"
nations, will surpass the collective economies of the G7 nations by 2032.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
7. Foreign direct investment has been falling alarmingly since the global recession of 2009 in
most regions of the world.
Answer: False
Feedback: Foreign direct investment (FDI)—the term used to indicate the amount invested in
property, plant, and equipment in another country—has been growing at a slow but steady
rate in the years since the global recession of 2009.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
1-3
, 8. In a command economy, a general balance between supply and demand sustains prices,
while an imbalance creates a price fluctuation.
Answer: False
Feedback: In a command economy, the government has explicit control over the price and
supply of a good or service. The particular goods and services offered are not necessarily in
response to consumers' stated needs but are determined by the theoretical advancement of
society.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-02 REVIEW the major trends in global and regional integration.
Level of Difficulty: 1 Easy
Topic: Global Economic Systems
9. Monopolies are a danger to the market economy system because they tend to stifle
economic growth.
Answer: True
Feedback: Monopolies are a danger to the market economy system because they tend to stifle
economic growth and consumer choice with their power to determine supply. Factors such as
efficiency of production and quality and pricing of goods can be chosen arbitrarily by
monopolies, leaving consumers without a choice and at the mercy of big businesses.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-02 REVIEW the major trends in global and regional integration.
Level of Difficulty: 1 Easy
Topic: Global Economic Systems
10. In the context of the emerging markets of Asia, India is attractive to multinationals,
especially U.S. and British firms.
Answer: True
Feedback: India is attractive to multinationals, especially U.S. and British firms. Many Indian
people speak English, are very well educated, and are known for advanced information
technology expertise.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-03 EXAMINE the changing balance of global economic power and
trade and investment flows among countries.
Level of Difficulty: 1 Easy
Topic: Economic Performance and Issues of Major Regions
11. The United States has considerable foreign direct investment in Germany, more than in
any other country.
Answer: False
Feedback: The United States has considerable foreign direct investment in Canada, more than
in any other country. Canada is the United States' largest trading partner, a position it has
held for many years.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-03 EXAMINE the changing balance of global economic power and
trade and investment flows among countries.
Level of Difficulty: 1 Easy
1-4
Culture, Strategy, and Behavior, 11th
Edition, Fred Luthans, Jonathan Doh
1-1
, Chapter 01
Globalization and International Linkages
True/False Questions
1. Internationalization is the vision of creating one world unit, a single market entity.
Answer: False
Feedback: Internationalization is the process of a business crossing national and cultural
borders, while globalization is the vision of creating one world unit, a single market entity.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
2. In the context of the changing global demographics, elderly populations spend money on
housing and other capitally financed purchases.
Answer: False
Feedback: While elderly populations spend money on health care services, younger
populations spend income on housing and other capitally financed purchases.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
3. North American Free Trade Agreement (NAFTA) members are better integrated as a
single market than the European Union (EU) or the allied Asian countries.
Answer: False
Feedback: Even though long-standing cultural differences remain, and the European Union
has recently experienced some substantial challenges, the European Union is more integrated
as a single market than NAFTA, CAFTA, or the allied Asian countries.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
4. General Electric (GE) has strategically leveraged social media to improve its long-term
brand image.
Answer: True
Feedback: General Electric (GE) has strategically leveraged social media to improve its long-
term brand image. By interacting daily with customers across a variety of social networks, the
100-year-old company aims to transform the way that its brand is perceived while
simultaneously building a new generation of consumers.
1-2
,AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: An Interconnected World
5. An increase in the ease of travel between countries is an important development that has
occurred because of the North American Free Trade Agreement (NAFTA).
Answer: True
Feedback: An increase in the ease of travel between countries is an important development
that has occurred because of the North American Free Trade Agreement (NAFTA). Other
important developments include the elimination of tariffs as well as import and export quotas,
the opening of government procurement markets to companies in Canada and Mexico, an
increase in the opportunity to make investments in each other’s country, and the removal of
restrictions on agricultural products, auto parts, and energy goods.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
6. According to a Goldman Sachs global economics team report, it is estimated that the
economies of Brazil, Russia, India, and China, which it collectively coined as the "BRIC"
nations, will surpass the collective economies of the G7 nations by 2032.
Answer: True
Feedback: According to a Goldman Sachs global economics team report, it is estimated that
the economies of Brazil, Russia, India, and China, which it collectively coined as the "BRIC"
nations, will surpass the collective economies of the G7 nations by 2032.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
7. Foreign direct investment has been falling alarmingly since the global recession of 2009 in
most regions of the world.
Answer: False
Feedback: Foreign direct investment (FDI)—the term used to indicate the amount invested in
property, plant, and equipment in another country—has been growing at a slow but steady
rate in the years since the global recession of 2009.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-01 ASSESS the implications of globalization for countries, industries,
firms, and communities.
Level of Difficulty: 1 Easy
Topic: Globalization and Internationalization
1-3
, 8. In a command economy, a general balance between supply and demand sustains prices,
while an imbalance creates a price fluctuation.
Answer: False
Feedback: In a command economy, the government has explicit control over the price and
supply of a good or service. The particular goods and services offered are not necessarily in
response to consumers' stated needs but are determined by the theoretical advancement of
society.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-02 REVIEW the major trends in global and regional integration.
Level of Difficulty: 1 Easy
Topic: Global Economic Systems
9. Monopolies are a danger to the market economy system because they tend to stifle
economic growth.
Answer: True
Feedback: Monopolies are a danger to the market economy system because they tend to stifle
economic growth and consumer choice with their power to determine supply. Factors such as
efficiency of production and quality and pricing of goods can be chosen arbitrarily by
monopolies, leaving consumers without a choice and at the mercy of big businesses.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-02 REVIEW the major trends in global and regional integration.
Level of Difficulty: 1 Easy
Topic: Global Economic Systems
10. In the context of the emerging markets of Asia, India is attractive to multinationals,
especially U.S. and British firms.
Answer: True
Feedback: India is attractive to multinationals, especially U.S. and British firms. Many Indian
people speak English, are very well educated, and are known for advanced information
technology expertise.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-03 EXAMINE the changing balance of global economic power and
trade and investment flows among countries.
Level of Difficulty: 1 Easy
Topic: Economic Performance and Issues of Major Regions
11. The United States has considerable foreign direct investment in Germany, more than in
any other country.
Answer: False
Feedback: The United States has considerable foreign direct investment in Canada, more than
in any other country. Canada is the United States' largest trading partner, a position it has
held for many years.
AACSB: Analytic
Bloom's: Remember
Learning Objective: 01-03 EXAMINE the changing balance of global economic power and
trade and investment flows among countries.
Level of Difficulty: 1 Easy
1-4
