Test Bank for Global Business 5th Edition by Mike W. Peng – Complete Exam Questions & Verified Answers 2025/2026

Test Bank For Global Business 5th Edition By Mike Peng (All Chapters, 100% Original Verified, A+ Grade)
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Chapter 01 - Introduction

Indicate whether the statement is true or false.

1. A multinational enterprise is a firm that engages in foreign direct investment by directly investing in, controlling, and
managing value-added activities in other countries.
a. True
b. False

2. The term “emerging markets” refers to the fastest-growing developing economies.
a. True
b. False

3. Gross domestic product (GDP) is the sum of value added by resident firms, households, and governments operating in
an economy.
a. True
b. False

4. The majority of the global GDP is contributed by the emerging markets.
a. True
b. False

5. Purchasing power parity (PPP) is a conversion that determines the equivalent amount of goods and services different
currencies can purchase.
a. True
b. False

6. Purchasing power parity (PPP) is calculated as the sum of value added by resident firms, households, and governments
operating in an economy.
a. True
b. False

7. Global business includes both international and domestic business activities.
a. True
b. False

8. International business can be defined as the investment in, controlling, and managing value-added activities in other
countries.
a. True
b. False

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

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

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Chapter 01 - Introduction

b. False

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.
a. True
b. False

12. The emerging markets of the world are placed at the top of the global economic pyramid.
a. True
b. False

13. The global economic pyramid does not represent countries that have a per capita annual income of less than $2,000.
a. True
b. False

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

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

16. Reverse innovation is an example of bottom up innovation.
a. True
b. False

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

18. Globalization has driven up the salaries of low-level jobs.
a. True
b. False

19. An international premium is a significant pay raise awarded to expatriate employees working abroad.
a. True
b. False

20. New York has more Fortune Global 500 company headquarters than any other city.
a. True
b. False

21. Overall, the focus on firm performance around the globe defines the field of global business more than anything else.
a. True
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Chapter 01 - Introduction

b. False

22. An institution-based view suggests that the success and failure of firms are enabled and constrained by business rules
and norms of the host nation.
a. True
b. False

23. Formal institutions include laws, regulations, and rules.
a. True
b. False

24. The institution-based view places emphasis on the external factors that could affect a firm.
a. True
b. False

25. Focusing on a firm’s internal resources and capabilities is the main emphasis of the resource-based view.
a. True
b. False

26. Liability of foreignness is the inherent disadvantage experienced by foreign firms in host countries because of their
non-native status.
a. True
b. False

27. Most opponents of globalization view it as a long-run historical evolution since trade began.
a. True
b. False

28. According to the pendulum view of globalization, globalization is a relatively new phenomenon triggered by the
information revolution of the early 1990s.
a. True
b. False

29. Scenario planning is a technique to prepare and plan exclusively for high-risk scenarios.
a. True
b. False

30. Standardization of markets would lead to a state of semiglobalization.
a. True
b. False

31. Semiglobalization is primarily caused by the practice of total isolation.
a. True
b. False

32. The current state of globalization around the world is that of semiglobalization.
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Chapter 01 - Introduction

a. True
b. False

33. Semiglobalization calls for adopting one way of doing business for all conditions.
a. True
b. False

34. The strategy of treating the entire world as one market is known as localization.
a. True
b. False

35. Many opponents of globalization are nongovernmental organizations.
a. True
b. False

Indicate the answer choice that best completes the statement or answers the question.

36. The term "emerging economies" has replaced the term _____.
a. developed countries
b. developing countries
c. Triad markets
d. first-world markets

37. Which of the following is measured as the sum of value added by resident firms, households, and governments
operating in an economy?
a. Gross national product
b. Gross national income
c. Gross domestic product
d. National reserve

38. A conversion that determines the equivalent amount of goods and services that different currencies can buy is known
as _____.
a. purchasing power parity
b. foreign exchange rate
c. country's deficit
d. gross domestic product

39. The gross domestic product plus the income from non-resident sources abroad gives the ____.
a. gross national product
b. per capita income
c. purchasing power parity
d. net national income

40. A firm that directly invests in, controls, and manages value-added activities in other countries is engaging in _____.
a. foreign direct investment
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