Global Business International Edition 3rd Edition by Mike Peng - Test Bank

,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
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Creation of Value 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
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Strategy 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
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Bloom's: Knowledge

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

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence 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
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence 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
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

,OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Bloom's: Knowledge




© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

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

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence 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
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Bloom's: Knowledge

9. On the global economic pyramid, the Triad refers to developed economies consisting of North
America, Western Europe, and Japan.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Creation of Value KEY: Bloom's: Knowledge

10. All the countries of the BRIC belong to the top tier of the global economic pyramid.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Bloom's: Knowledge

11. The second tier of the global economic pyramid is made up of countries with a per capita annual
income of more than $20,000.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Bloom's: Knowledge

12. The emerging markets of the world are placed at the top of the global economic pyramid.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 1-1 NAT: BUSPROG: Analytic
STA: DISC: Creation of Value KEY: Bloom's: Knowledge

13. The global economic pyramid does not represent countries that have a per capita annual income of less
than $2,000.
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.