TEST BANK FOR GLOBAL BUSINESS TODAY 7TH EDITION BY CHARLES W. L. HILL | VERIFIED 2023/2024

Chapter 01 Globalization True / False Questions 1. Globalization refers to the shift toward a more integrated and interdependent world economy. True False 2. Tastes and preferences of consumers in different nations are beginning to converge on some global norm. True False 3. A company has to be a major multinational corporation to facilitate, and benefit from, the globalization of markets. True False 4. Because of globalization, companies rarely need to customize marketing strategies, product features, and operating practices in different countries. True False 5. The most global markets currently are markets for consumer products. True False 6. As firms follow each other around the world, they bring with them many of the assets that served them well in other national markets. Thus, greater diversity replaces uniformity. True False 1-2 7. Substantial impediments, such as barriers to foreign direct investment, make it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe. True False 8. The GATT succeeded the World Trade Organization (WTO). True False 9. Over its entire history, the WTO has promoted the lowering of barriers to cross-border trade and investment. True False 10. The IMF is less controversial than its sister concern, the World Bank. True False 11. The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil. True False 12. After World War I, the advanced nations of the West committed themselves to removing barriers to the free flow of goods, services, and capital between nations. True False 13. World merchandise trade includes trade in manufactured goods, agricultural goods, and services. True False 1-3 14. Trade in services now accounts for more than half of the value of all international trade. True False 15. The volume of world output has grown faster than the volume of world merchandise trade since the 1950s, according to data from the World Trade Organization. True False 16. Moore's Law predicts that the power of microprocessor technology doubles and its cost of production declines in half every 18 months. True False 17. As transportation costs associated with the globalization of production decline, dispersal of production to geographically separate locations becomes more economical. True False 18. The Internet has acted as a regulatory brake on unfettered international trade in business. True False 19. In any society, the media are the primary conveyors of culture. True False 20. The dominance of large multinational British firms on the international business scene is one of the changing trends of globalization. True False 21. As the world's largest industrial power, the United States accounted for a significantly larger share of the world economy in 2008 than it did in the 1960's. True False 1-4 22. Most forecasts now predict a rapid rise in world output accounted for by developing nations such as China, India, and South Korea, and a relative decline in the share enjoyed by rich industrialized countries such as Britain and the United States. True False 23. In the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations from their home markets to developing nations where labor costs were lower. True False 24. The stock of foreign direct investment refers to the total cumulative value of foreign investments in a country. True False 25. A slump in foreign direct investment into developed nations from 1998 to 2000 was followed by a surge in 2001 to 2003. True False 26. In the 1960s, global business activity was dominated by large Japanese multinational corporations. True False 27. Many of the former Communist nations of Europe and Asia seem to share a commitment to democratic policies and free market economies. True False 28. Throughout most of Latin America, governments have sold state-owned enterprises to private investors and foreign investment is welcomed. True False 1-5 29. The arguments of those who support globalization are limited by the absence of a compelling body of theory and evidence. True False 30. Support for the antiglobalization effort goes beyond a core group of anarchists. True False 31. One concern of globalization opponents is that it undermines the influence of international organizations and promotes the sovereignty of individual nation-states. True False 32. Due to benefits associated with free trade and investment, the gap between the rich and poor nations of the world has reduced. True False 33. Highly indebted poor countries (HIPCs) are those economies that will be better served by pursuing protectionist policies than by free trade. True False 34. A firm that imports products from other countries can be termed an international business. True False 35. Despite all the talk about the emerging global village, differences between countries such as cultures and political systems are profound and enduring. True False 1-6 36. The range of problems confronted by a manager in an international business is wider and the problems themselves are more complex than those confronted by a manager in a domestic business. True False Multiple Choice Questions 37. refers to the shift toward a more integrated and interdependent world economy. A. Universalization B. Mass customization C. Globalization D. Internationalization 38. The merging of historically distinct and separate national markets into one huge global marketplace is referred to as the: A. globalization of production. B. localization of markets. C. offshore outsourcing. D. globalization of markets. 39. What percentage of exporting firms in the United States are small businesses that employ less than 100 people? A. 22 B. 47 C. 67 D. 90 1-7 40. Automobile companies promote different car models in different countries depending on a range of factors such as demographics, local taste, local fuel costs, income levels, traffic congestion, and cultural values. This demonstrates that: A. significant differences still exist among national markets. B. cultural diversity has been replaced by global uniformity. C. the global market is less complex than national markets. D. national markets are giving way to global markets. 41. The most global markets currently are markets for: A. intellectual capital. B. consumer goods. C. industrial goods. D. healthcare services. 42. Which of the following statements best supports the claim that "greater uniformity replaces diversity" in the context of global markets? A. Because of differences in business systems and legal regulations, companies have to customize their marketing strategies, product features, and operating practices to best match conditions in a particular country. B. As rival global firms follow each other across countries, they bring with them their brand names, products, and marketing strategies from other national markets, thus creating homogeneity across markets. C. Truly innovative companies succeed by developing products that serve specific needs of the local markets. D. The volume of goods, services, and investment crossing national borders has expanded at a slower rate than world output for more than half a century. 43. Globalization results in a greater degree of across markets than would be present otherwise. A. regulatory control B. diversity C. homogeneity D. heterogeneity 1-8 44. refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production. A. Globalization of markets B. Production orientation C. Commoditization D. Globalization of production 45. Boeing outsources nearly 30% of the production of its aircraft to foreign suppliers. What could be the rationale behind such a move? A. It is difficult for firms like Boeing to achieve the optimal dispersion of their productive activities to locations around the globe. B. Outsourcing to foreign suppliers is in accordance with diplomatic treaties signed with other countries. C. Foreign suppliers are not governed by strict regulations followed by companies in the U.S. and Boeing also saves on tax payments. D. A global web of suppliers yields a better final product, which enhances the chances of Boeing winning a greater share of total orders for aircraft. 46. Sony Corporation sources goods and services for its electronics products from different locations around the globe in an attempt to take advantage of differences in the cost and quality of factors of production. This practice is made possible by the: A. globalization of production. B. localization of markets. C. focus on regulation. D. homogeneity of markets. 47. Although Boeing is incorporated in the United States, a supplier in Singapore makes the doors for the nose landing gear, and suppliers in Italy manufacture wing flaps. Boeing is taking part in: A. exporting. B. licensing. C. outsourcing. D. franchising. 1-9 48. A software company that uses Indian engineers to perform maintenance functions on software designed in the United States is benefiting from: A. outsourcing. B. exporting. C. licensing. D. franchising. 49. Although early outsourcing efforts were primarily confined to , increasingly, companies are taking advantage of outsourcing for . A. healthcare; manufacturing B. manufacturing; services C. consulting; manufacturing D. manufacturing; agriculture 50. Why do many U.S. companies employ Indian software engineers to perform maintenance functions on software designed in the U.S.? A. It compresses the time and lowers the costs required to develop new software programs. B. It is in accordance with the treaty signed between the governments of the U.S. and India. C. It helps companies overcome the shortfall of qualified personnel in the U.S. D. It creates more low-skilled jobs in the U.S., resulting in better economic growth. 51. Identify the international treaty that committed signatories to lowering barriers to the free flow of goods across national borders and is the predecessor to the WTO. A. The North American Free Trade Agreement B. The G-20 C. The Warsaw Pact D. The General Agreement on Tariffs and Trade 1-10 52. How has the WTO helped globalization of markets and production? A. It has made low-interest loans available to cash-strapped governments in poor nations. B. It required the borrowing nation-states to adopt specific economic policies aimed at economic growth. C. It sought to create a more open global business system unencumbered by barriers to trade and investment between countries. D. It has helped major nations to launch a coordinated policy response to the global financial crisis. 53. Why was the World Bank created? A. To maintain order in the international monetary system B. To promote economic development C. To regulate what economic policies nations adopt D. To maintain peace and security 54. Why was the International Monetary Fund established? A. To maintain order in the international monetary system B. To usurp sovereignty of borrowing nations C. To promote respect for human rights D. To regulate policies of poor nations and create infrastructure development 55. Which of the following is an argument put forth by critics of the IMF? A. It lowers barriers to the free flow of goods across national borders. B. It has rarely given loans to countries in dire need of assistance. C. It usurps the sovereignty of nation-states by telling governments what economic policies they must adopt. D. Its lending policies have been skewed in favor of developed western countries. 56. The was established in 1945 by 51 countries committed to preserving peace through international cooperation and collective security. A. Greenpeace organization B. Amnesty International C. League of Nations D. The United Nations 1-11 57. When states become members of the United Nations, they agree to accept the obligations of the: A. Vienna Convention. B. UN Charter. C. London Protocol. D. Warsaw Pact. 58. According to the UN Charter, which of the following is a purpose of the UN? A. To be a center for harmonizing the actions of nations B. To commit member nations to lower trade barriers C. To provide interest-free loans to poor countries to implement infrastructure projects D. To push for the creation of regional free trade agreements 59. The G20 is comprised of representatives of the European Union, the European Central Bank, and representatives of the 19 largest economies of the world. Who are the representatives of these economies? A. Finance ministers and central bank governors B. Prime ministers and defense ministers C. Presidents and finance ministers D. Heads of government and army chiefs 60. The G-20 was originally established to serve which of the following objectives? A. To launch a coordinated policy response to the global financial crisis that started in America and then rapidly spread around the world B. To formulate a coordinated policy response to financial crises in developing nations C. To promote policies aimed at improving standards of living and employment in developing nations D. To shore up the economies of troubled nations by providing interest-free loans 1-12 61. As of 2008-09, the G20 works to: A. address the concerns of underdeveloped nations regarding the effects of globalization. B. formulate policies to counter hunger and poverty in underdeveloped nations of the world. C. provide a forum through which major nations attempted to launch a coordinated policy response to the global financial crisis. D. help create a unified action plan to counter the threat of global terrorism and poverty in developing nations of the world. 62. Identify a macro factor that seems to underlie the trend toward greater globalization. A. The increase in global economic stability B. Reversal of deregulation trends C. Implementation of protectionist policies D. The decline in barriers to trade 63. Which of the following is a key macro factor that underlies the trend toward greater globalization? A. Technological change, particularly in communication, information processing, and transportation B. Uniformity achieved in the level of education and standards of living across the world C. Establishment of global institutions like the WTO and IMF to promote spread of globalization D. Increase in subsidies to ailing sectors like agriculture 64. Which of the following factors was a contributor to the Great Depression? A. World War II that began in Europe and quickly spread to other parts of the world B. The spread of Communist ideologies across Europe and parts of Asia C. The influx of cheap foreign labor into the United States D. Countries progressively raising trade barriers against each other 1-13 65. Which of the following refers to the exporting of goods or services to consumers in another country? A. Situational commerce B. World exchange C. International trade D. Cross-national barter 66. Cisco Systems exports a number of products to consumers in other countries. This practice is referred to as: A. world exchange. B. international trade. C. cross-national barter. D. situational commerce. 67. Although Gillette is an American company, it has invested substantial business resources in activities outside the United States. This practice is referred to as: A. transnational commerce. B. foreign direct investment. C. third party outsourcing. D. organizational divestment. 68. The investing of resources in business activities outside a firm's home country is referred to as: A. third party outsourcing. B. divestment. C. speculative investment. D. foreign direct investment. 69. The motive behind the high tariffs imposed by nations on imports of manufactured goods prior to World War II was to: A. deter any possible attempts to undermine national sovereignty. B. protect domestic industries from foreign competition. C. boost national revenues affected by the Great Depression. D. prevent multinational companies from taking away jobs based in those countries. 1-14 70. The advanced industrial nations of the West committed themselves after World War II to removing barriers to the free flow of goods, services, and capital between nations. This goal was enshrined 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. 71. Barriers to international trade are said to have contributed to: A. the Cold War. B. World War II. C. the Great Depression. D. the dot-com boom of the 1990s. 72. Which of the following was NOT an outcome of the Uruguay Round of the GATT? A. Enforced high tariffs on imports of manufactured goods B. Extended GATT to cover services as well as manufactured goods C. Established the World Trade Organization D. Provided enhanced protection for patents, trademarks, and copyrights 73. Which of the following agencies was established at the 1993 Uruguay Round? A. Global Trade Enforcement Administration B. World Tariff and Trade Bureau C. International Trade Enforcement Agency D. World Trade Organization 74. In 2001, the WTO launched a new round of talks aimed at further liberalizing the global trade and investment framework. This was held at: A. Uruguay. B. Doha. C. Kyoto. D. Seattle. 1-15 75. Which of the following is part of the agenda of the Doha Round of talks launched by the WTO? A. Limit the use of antidumping laws B. Protect domestic industries from foreign competition C. Increase subsidies to make domestic products cheaper D. Persuade member governments to cut defense spending 76. Which of the following would be the biggest gain for poor countries from the 2001 Doha WTO talks? A. Protection from international competition B. Reduction in tariff on agricultural products C. Better antidumping laws D. Regulating economic policies of HIPCs 77. Approximately 90 percent of the changes that countries have made pertaining to foreign direct investment regulations have: A. made firms consider their own country as their main market. B. created a more favorable environment for FDI. C. insulated nations from the impact of changes in economies of other countries. D. strengthened laws restricting and regulating the flow of FDI. 78. The lowering of trade and investment barriers: A. protects domestic firms from competition with foreign firms. B. weakens the national sovereignty of the countries. C. allows firms to base production at the optimal location for that activity. D. helps governments fund infrastructure projects. 79. How does the lowering of barriers to international trade help firms? A. It protects them from domestic competition. B. It allows them to view the world as their market. C. It drives up costs because they assemble their products in different countries. D. It puts a brake on globalization of both markets and production. 1-16 80. Which of the following statements is consistent with data from the World Trade Organization with regard to the volume of world merchandise trade? A. The volume of world trade has grown faster than the world economy since the 1950. B. Since the mid-1980s, the value of international trade in services has reduced considerably. C. More and more firms are assembling their products in one single nation to save costs and time. D. Firms are finding their home markets protected from foreign competitors. 81. Which of the following is NOT true regarding the volume of world trade today? A. More firms are engaging in outsourcing than before. B. Economies of the world's nation-states are becoming more intertwined. C. The world has become significantly wealthier since 1950. D. The value of international trade in services is dropping. 82. From 1970 to 2008, the volume of world merchandise trade expanded: A. 5-fold. B. 10-fold. C. 2-fold. D. 30-fold. 83. World merchandise trade includes all of the following EXCEPT: A. manufactured goods. B. services. C. agricultural goods. D. mining products. 84. The growing integration of the world economy into a single, huge marketplace is: A. increasing the intensity of competition in a range of manufacturing and service industries. B. now showing signs of retreat, following the recent global financial crisis. C. causing most economies to strengthen their protectionist policies. D. causing a general decline in the level of competition among domestic companies. 1-17 85. According to the authors, international firms expanding their presence in foreign markets has resulted in: A. homogenizing of the marketing strategies and production techniques. B. firms finding their home markets under attack from foreign competitors. C. reduced levels of labor productivity in these markets. D. high levels of immigration into those countries and thus, greater levels of unemployment. 86. Evidence suggests that FDI: A. is increasing unemployment in the poor nations. B. is increasing conflicts in the global economy. C. has mirrored the trend in the growth of world trade, but is still lagging behind world output. D. has accelerated faster than the growth in world trade and world output. 87. While the lowering of trade barriers made globalization of markets and production a theoretical possibility, has made it a tangible reality. A. technological change B. the rise of nuclear powers C. elasticity of demand D. corporate supremacy 88. According to the text, the single most important innovation in technology has been the development of the: A. telegraph. B. microprocessor. C. airplane. D. telephone. 89. Why is development of the microprocessor considered the single most important innovation in technology? A. It has helped to create stronger intellectual property laws. B. It has enabled the explosive growth of low-cost computing. C. It has increased the cost of telecommunication. D. It helped in better regulating international trade. 1-18 90. predicts that the power of microprocessor technology doubles and the cost of production falls every 18 months. A. Bell's law B. Grosch's law C. Moore's law D. Wirth's law 91. What is the contribution of the World Wide Web to global economy? A. It allows businesses to charge higher prices for their products, thereby improving their margins. B. It has resulted in a decrease of trade tariffs. C. It makes it easier for buyers and sellers to find each other, wherever they may be located. D. It facilitates the regulation of international trade. 92. Due to containerization: A. low cost air travel has grown exponentially over the past decade. B. moving goods from one mode of transport to another has become labor-intensive. C. the costs of shipping goods over long distances have significantly decreased. D. the globalization of markets and production has slowed down. 93. Which of the following is true about how containerization has revolutionized the transportation business? A. The process of moving goods from one mode of transport to another has become very labor-intensive, lengthy, and costly. B. The whole process of moving goods can now be executed by a handful of longshoremen in a couple of days. C. The average ocean freight and port charges per ton of U.S. export and import cargo doubled in 1990. D. Since 1980, the world's containership fleet has halved, reflecting in part the volume of international trade. 1-19 94. Since 1980, the world's containership fleet has more than quadrupled, reflecting in part: A. the growing volume of international trade. B. the growing share of world output for the United States. C. the rising costs of containerization. D. the lowering of transportation costs. 95. How has technological innovation affected the globalization of production? A. The real costs of information processing and communication have increased in the past two decades. B. The effective and efficient execution of a digitized work process remains limited to developed countries. C. It makes it possible for a firm to create and then manage a globally dispersed production system. D. It helps domestic businesses gain a sustainable competitive advantage over multinational firms. 96. How have low-cost jet travel and global communication networks impacted the world culturally? A. They have made it possible for managers to oversee a globally dispersed production system. B. They have resulted in a polarization of the differences between cultures and radicalization of most ethnic cultures. C. They have prompted traditional cultures to step up efforts to differentiate the uniqueness of their cultures from what they perceive as the western culture. D. They have reduced the cultural distance between countries and are bringing about some convergence of consumer tastes and preferences. 97. Which of the following demographic characteristic was in evidence as late as the 1960s? A. European nations accounted for three-fourth of the world economic output. B. Small U.S. entrepreneurial firms dominated the international business scene. C. The U.S. was the third most dominant industrial power behind Germany and the U.K. D. Roughly half the world was governed by centrally planned economies. 1-20 98. Which country was the world's most dominant industrial power in the early 1960s? A. Japan B. The United Kingdom C. Germany D. The United States 99. In recent years, which of the following countries has seen its share of world output fall? A. The United States B. Thailand C. Taiwan D. China 100. Which of the following countries had the greatest share of the world exports in 2009? A. United States B. Japan C. China D. Germany 101. Purchasing power parity figures adjust the value of GDP to reflect: A. the cost of living in various economies. B. the per-capita income across various economies. C. the share of world trade of various economies. D. the foreign direct investment levels in various economies. 102. If current trends in the changing demographics of world GDP and trade continue, the economy could ultimately be larger than that of the United States on a purchasing power parity basis. A. Russian B. Chinese C. Japanese D. Indian 1-21 103. Due to the changing economic geography, most of tomorrow's economic opportunities may be found in: A. the rich industrialized nations like Great Britain and Germany. B. African countries like Somalia and Sudan. C. Australia and the Scandinavian countries. D. the developing nations of the world. 104. The motivation for much of the foreign direct investment by non-U.S. firms was the desire to: A. disperse production activities to optimal locations and to build a direct presence in major foreign markets. B. dilute the influence of the U.S. firms in global markets. C. accelerate the spread of globalization to the poorer countries of Africa. D. protect their domestic markets from competition from U.S. companies. 105. Identify the term used to refer to the total cumulative value of foreign investments. A. Accumulation of foreign direct investment B. Portfolio of foreign direct investment C. Stock of foreign direct investment D. Set of foreign direct investment 106. The sustained flow of foreign investment into developing nations is: A. essential to recapture the lost share of total stock of FDI for developed nations. B. essential to ensuring a steady/reciprocal flow of FDI back into developed nations. C. aimed at Western powers building political influence in those regions. D. an important stimulus for economic growth in those countries. 107. For which of the following countries did the share of the total stock decline between 1980 and 2008? A. Japan B. The United States C. France D. China 1-22 108. General Electric has productive activities in a number of countries. As a result, it would be appropriate to refer to General Electric as a enterprise. A. regional B. pan-American C. universal D. multinational 109. Since the 1960s, there have been two notable trends in the demographics of the multinational enterprise. These two trends have been: A. the rise of medium-sized enterprises and the decline of small multinationals. B. the decline of non-U.S. multinationals and the rise of unionized organizations. C. the decline of non-U.S. multinationals and the growth of nationalized institutions. D. the rise of non-U.S. multinationals and the growth of mini-multinationals. 110. What are mini-multinationals? A. Multinational firms from relatively small countries B. Multinational firms that span the globe C. Multinational firms that operate in less than three foreign countries D. Medium-sized and small multinationals 111. Which of the following is true of the trend in the changing nature of multinational enterprises? A. Global business activity is increasingly being dominated by large Indian and Russian multinational corporations. B. The growth of mini-multinational companies has been restricted only to the U.S. and Europe. C. The ranks of the world's largest 100 multinationals are still dominated by firms from developed economies. D. The Internet is the main barrier that small firms face in building international sales.