Global Business International Edition 2nd Edition by Mike Peng – Test Bank

Global Business International Edition 2nd Edition by Mike Peng – Test Bank

Chapter 1—Globalizing Business

 

TRUE/FALSE

 

1. Terms International Business (IB) and the term global business are synonymous.

 

ANS:  F                    PTS:   1                    DIF:    Easy               OBJ:   1.1

NAT:  AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

 

2. Multinational enterprise is a firm that engages in foreign direct investment by directly investing in, controlling, and managing value-added activities in other countries.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        OBJ:   1.1

NAT:  AACSB: Tier 1 Analytic; Tier 2 Creation of Value

 

3. The term International Business should always refer to business activities conducted abroad.

 

ANS:  F                    PTS:   1                    DIF:    Difficult         OBJ:   1.1

NAT:  AACSB: Tier 1 Communication; Tier 2 Environmental Influence

 

4. Global business includes both international (cross-border) activities as well as domestic business activities.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        OBJ:   1.1

NAT:  AACSB: Tier 1 Reflective Thinking; Tier 2 Environmental Influence

 

5. Gross domestic product (GDP) is the sum of value added by resident firms, households, and government operating in an economy.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        OBJ:   1.1

NAT:  AACSB: Tier 1 Reflective Thinking; Tier 2 Environmental Influence

 

6. Emerging markets contribute about 25% of global GDP when adjusted for purchasing power parity, PPP.

 

ANS:  F                    PTS:   1                    DIF:    Moderate        OBJ:   1.1

NAT:  AACSB: Tier 1 Analytic; Tier 2 Environmental Influence

 

7. 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:    Moderate        OBJ:   1.1

NAT:  AACSB: Tier 1 Analytic; Tier 2 Environmental Influence

 

8. Purchasing power parity (PPP) is an adjustment that reflects the differences in cost of living in countries.

 

ANS:  T                    PTS:   1                    DIF:    Moderate        OBJ:   1.1

NAT:   AACSB: Tier 1 Analytic; Tier 2 Environmental Influence