2024 Exam Success with the [Global Business,Peng,3e] 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

REF: p. 4 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

KEY: Bloom's: Knowledge



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


ANS: F PTS: 1 DIF: Difficulty: Easy

REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

, 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

REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 5 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

KEY: Bloom's: Knowledge



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


ANS: T PTS: 1 DIF: Difficulty: Easy

REF: p. 7 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 7 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 9 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 9 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 9 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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

REF: p. 9 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

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.


ANS: F PTS: 1 DIF: Difficulty: Easy

, REF: p. 9 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

KEY: Bloom's: Knowledge



14. The term "base of the pyramid" represents economies where individuals make less than $2,000 a
year.


ANS: T PTS: 1 DIF: Difficulty: Easy

REF: p. 9 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

KEY: Bloom's: Knowledge



15. Reverse innovations are innovations that are adopted first in the Triad-based multinationals and
then diffused around the world.


ANS: F PTS: 1 DIF: Difficulty: Moderate

REF: p. 9 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

KEY: Bloom's: Knowledge



16. Reverse innovation is an example of bottom up innovation.


ANS: T PTS: 1 DIF: Difficulty: Moderate

REF: p. 10 OBJ: LO: 1-1 NAT: BUSPROG: Analytic

KEY: Bloom's: Knowledge



17. The Group of 20 includes the European Union (EU)—a regional bloc.


ANS: T PTS: 1 DIF: Difficulty: Easy

REF: p. 11 OBJ: LO: 1-2 NAT: BUSPROG: Analytic

KEY: Bloom's: Knowledge