(Test Bank) Global Business Today

Hill, 11

Nursing

Test Bank

11th Edition

• $15.00 $50.00

---

Description

Test Bank for Global Business Today, The downloadable file consists of 974 pages, and the total size of the file is 6.34 MB. Purchase now only for highly discounted price.

Author(s): Hill

---

---

Study Note Preview

Global Business Today 11th Edition Hill Test Bank Global Business Today, 11e (Hill) Chapter 1 Globalization 1) As a result of globalization, we have been moving toward a world in which national economies are relatively self -contained entities. Answer: FALSE Explanation: Over the past five decades, a fundamental shift has been occurring in the world economy. We have been moving away from a world in which national economies were relatively self-contained entities, isolated from each other by barriers to cross -border trade and investment; by distance, time zones, and language; and by national differences in government regulation, culture, and business systems. Difficulty: 1 Easy Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) To truly benefit from globalization, a firm needs to be a multinational conglomerate rather than a small or mid -size company. Answer: FALSE Explanation: A company does not have to be the size of a multinational giant to benefit from globalization. Currently, small and medium -size companies account for 33 percent of the value of U.S. exports of manufactured goods. Difficulty: 1 Easy Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) In today's marketplace, outsourcing efforts are confined to manufacturing activities. Answer: FALSE Explanation: Early outsourcing efforts were primarily confined to manufacturing activities. Increasingly, however, companies are taking advantage of modern communications technology, particularly the Internet, to outsource service activities to low-cost producers in other nations. Difficulty: 1 Easy Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4) The World Trade Organization, the International Monetary Fund and its sister institution the World Bank, and the United Nations were all created by voluntary agreement between individual nation -states. Answer: TRUE Explanation: Over the past half century, a number of important global institutions have been created to help manage, regulate, and police the global marketplace and to promote the establishment of multinational treat ies to govern the global business system. These include the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO); the International Monetary Fund (IMF) and its sister institution, the World Bank; and the United Nations (UN). All these institutions were created by voluntary agreement between individual nation -states, and their functions are enshrined in international treaties. Difficulty: 1 Easy Topic: Various Types of Institutions in Global Business Learni ng Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) The WTO polices the world trading system, and without this organization, the globalization of markets might not be where it is today. Answer: TRUE Explanation: The WTO is primarily responsible for policing the world trading system and making sure nation -states adhere to the rules laid down in trade treaties signed by WTO member states. Without an institution such as the WTO, the globalization of markets and production is unlikely to have proceeded as far as it has. Difficulty: 1 Easy Topic: Various Types of Institutions in Global Business Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 6) Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country. Answer: TRUE Explanation: Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country. Difficulty: 1 Easy Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 7) The retaliatory trade policies of the 1920s and 1930s contributed to the Great Depression. Answer: TRUE Explanation: Many of the barriers to international trade in the 1920s and 1930s took the form of high tariffs on imports of manufactured goods. The typical aim of such tariffs was to protect domestic industries from foreign competition. One consequence, however, was "beggar thy neighbor" retaliatory trade policies, with countries progressively raising trade barriers against each other. Ultimately, this depressed world demand and contributed to the Great Depression of the 1930s. Difficulty: 2 Medium Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Understand AACSB: Anal ytical Thinking Accessibility: Keyboard Navigation 8) The Uruguay Round extended GATT to cover services as well as manufactured goods. Answer: TRUE Explanation: The Uruguay Round further reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the World Trade Organization to police the international trading system. Difficulty: 2 Medium Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) Enhanced protection for patents and trademarks was one focus of the Uruguay Round. Answer: TRUE Explanation: The Uruguay Round further reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the World Trade Organization to police the international trading system. Difficulty: 1 Easy Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 10) The lowering of trade and investment barriers creates more opportunities for companies to have the world as their market. Answer: TRUE Explanation: The lowering of trade and investment barriers allows firms to view the world, rather than a single country, as their market. Difficulty: 1 Easy Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Understand AACSB: Reflecti ve Thinking Accessibility: Keyboard Navigation 11) In recent years, the economies of the world's nation -states have become less intertwined as a result of international trade. Answer: FALSE Explanation: The economies of the world's nation -states are becoming more intertwined. As trade expands, nations are becoming increasingly dependent on each other for important goods and services. Difficulty: 1 Easy Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) The United Nations created the Millennium Development Goals to increase the number of entrepreneurial activities around the world. Answer: FALSE Explanation: In 2000, the United Nations established the Millennium Development Goals to reduce the number of people who live in extreme poverty by 2015. Difficulty: 2 Medium Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 13) Containerization has revolutionized the transportation business, signifi cantly lowering the costs of shipping goods over long distances. Answer: TRUE Explanation: In economic terms, the most important major innovations in transportation technology are probably the development of commercial jet aircraft and superfreighters and the introduction of containerization, which simplifies transshipment from one mode of transport to another. Containerization has revolutionized the transportation business, significantly lowering the costs of shipping goods over long di stances. Difficulty: 1 Easy Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 14) Moore's law helps determine the most appropriate transportation method for a produced good. Answer: FALSE Explanation: The cost of microprocessors continues to fall, while their power increases (a phenomenon known as Moore's law, which predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18 months). Difficulty: 2 Medium Topic: Drivers of Globalization Learning Objective: 01-02 Recognize the main drivers of globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) During the 1960s, centrally planned economies associated with the communist world became open to Western international businesses. Answer: FALSE Explanation: Half a century ago, four facts described the demographics of the global economy. The first was U.S. dominance in the world economy and world trade picture. The second was U.S. dominance in world foreign direct investment. Related to this, the third fact was the dominance of large, multinational U.S. firms on the international business scene. The fourth was that roughly half the globe —the centrally planned economies of the communist world —was off -limits to Western international businesses. All four of these facts have changed rapidly. Difficulty: 2 Medium Topic: The Changing Nature of the Global Economy Learning Objective: 01-03 Describe the changing nature of the global economy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 16) The stock of foreign direct investment refers to the total cumulative value of foreign investments. Answer: TRUE Explanation: The stock of foreign direct investment refers to the total cumulative value of foreign investments. Difficulty: 1 Easy Topic: The Changing Nature of the Global Economy Learning Objective: 01-03 Describe the changing nature of the global economy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Throughout the 1990s, the amount of investment directed at both developed and developing nations increased dramatically. Answer: TRUE Explanation: Throughout the 1990s, the amount of investment directed at both developed and developing nations increased dramatically, a trend that reflects the increasing internationalization of business corporations. Difficulty: 2 Medium Topic: The Changing Nature of the Global Economy Learning Objective: 01-03 Describe the changing nature of the global economy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) A domestic enterprise is any business that has productive activities in at least two countries. Answer: FALSE Explanation: A multinational enterprise (MNE) is any business that has productive activities in two or more countries. Difficulty: 2 Medium Topic: The Changing Nature of the Global Economy Learning Objective: 01-03 Describe the changing nature of the global economy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 19) Today, many of the former communist nations of Europe and Asia seem to share a commitment to democratic policies and free market economies. Answer: TRUE Explanation: Many of the former communist nations of Europe and Asia seem to share a commitment to democratic policies and free market economies. For half a century, these countries were essentially closed to Western international businesses. Now, they present a host of export and investment opportunities. Difficulty: 2 Medium Topic: The Changing Nature of the Global Economy Learning Objective: 01-03 Describe the changing nature of the global economy. Bloom's: Remember AACSB: Analytical Thinking Accessib ility: Keyboard Navigation 20) The amount of foreign direct investment in China has been decreasing since the 1980s. Answer: FALSE Explanation: Between 1983 and today, annual foreign direct investment in China increased from less than $2 billion to $250 billion annually. Difficulty: 2 Medium Topic: The Changing Nature of the Global Economy Learning Objective: 01-03 Describe the changing nature of the global economy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) According to many influential economists, the increase in international trade and cross -border investment will result in an increase in the prices of goods and services. Answer: FALSE Explanation: Many influential economists, politicians, and business leaders seem to think that the shift toward a more integrated and interdependent global economy is a good thing. They say increased international trade and cross -border investment will result in lower price s for goods and services. Difficulty: 1 Easy Topic: The Globalization Debate Learning Objective: 01-04 Explain the main arguments in the debate over the impact of globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 22) One criticism of globalization is that falling trade barriers encourage companies to locate manufacturing activities in another country to take advantage of lower wage rates. Answer: TRUE Explanation: One concern frequently voiced by globalization opponents is that falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies such as the United States and Western Europe. Critics argue that falling trade barriers allow firms to mov e manufacturing activities to countries where wage rates are much lower. Difficulty: 1 Easy Topic: The Globalization Debate Learning Objective: 01-04 Explain the main arguments in the debate over the impact of globalization. Bloom's: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 23) A firm has to become a multinational enterprise to engage in international business. Answer: FALSE Explanation: An international business is any firm that engages in inter national trade or investment. A firm does not have to become a multinational enterprise, investing directly in operations in other countries, to engage in international business, although multinational enterprises are international businesses. Difficulty: 1 Easy Topic: Challenges and Opportunities Created by Globalization Learning Objective: 01-05 Understand how the process of globalization is creating opportunities and challenges for business managers. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) The range of problems that a manager in an international business faces is typically more complex than those faced by a manager in a domestic business. Answer: TRUE Explanation: In sum, managing an international business is different from managing a purely domestic business for at least four reasons: (1) countries are different, (2) the range of problems confronted by a manager in an international business is wider and the problem s themselves more complex than those confronted by a manager in a domestic business, (3) an international business must find ways to work within the limits imposed by government intervention in the international trade and investment system, and (4) interna tional transactions involve converting money into different currencies. Difficulty: 2 Medium Topic: Challenges and Opportunities Created by Globalization Learning Objective: 01-05 Understand how the process of globalization is creating opportunities and challenges for business managers. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 25) As a result of globalization, international businesses can avoid the haggle of currency exchanges during cross -border transactions. Answer: FALSE Explanation: Cross -border transactions require that money be converted from the firm's home currency into a foreign currency and vice versa. Because currency exchange rates vary in response to changing econo mic conditions, managers in an international business must develop policies for dealing with exchange rate movements. Difficulty: 2 Medium Topic: Challenges and Opportunities Created by Globalization Learning Objective: 01-05 Understand how the process of globalization is creating opportunities and challenges for business managers. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 26) Many believe that globalization has created a convergence in A) the volume of goods and services produced. B) foreign exchange transaction law. C) environmental and labor laws. D) consumer taste preferences. E) the regulation of markets. Answer: D Explanation: The globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace. Falling barriers to cross -border trade and investment have made it easier to sell internationally. It has been argued for some time that the tastes and preferences of consumers in different nations are beginning to converge on some global norm, thereby helping create a global market. Difficulty: 2 Medium Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) What is the shift toward a more integrated and interdependent world economy called? A) international trade B) foreign direct investment C) globalization D) Moore's Law E) containerization Answer: C Explanation: Globalization refers to the shift toward a more integrated and interdependent world economy. Globalization has several facets, including the globalization of markets and the globalization of production. Difficulty: 1 Easy Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 28) Fast food chain restaurants promote different menu choices in different countries depending on a range of factors such as demographics, local taste, income levels, and cultural values. This demonstrates that A) significant differences still exist among national markets. B) cultural diversity has b een replaced by global uniformity. C) the global market is less complex than national markets. D) only multinational giants can benefit from the globalization of markets. E) the social norms in a country do not affect purchase decisions of consumers. Answer: A Explanation: Significant differences still exist among national markets along many relevant dimensions, including consumer tastes and preferences, distribution channels, culturally embedded value systems, business systems, and legal regulations. These differences frequently require companies to customize marketing strategies, product features, and operating practices to best match conditions in a particular country. Difficulty: 3 Hard Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 29) What statement best supports the claim that greater uniformity replaces diversity in the context of global markets? A) Differences in business systems and legal regulations lead companies 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 countri es, they bring with them their brand names, products, and marketing strategies from other national markets, thus creating some homogeneity across markets. C) Truly innovative companies succeed by developing products that serve specific needs of the local mark ets. 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. E) The most global of markets are not typically markets for consumer products, as significant differences in consumer tastes and preferences still exist among national markets. Answer: B Explanation: As firms follow each other around the world, they bring with them many of the assets that served them well in other national markets —including their products, operating strategies, marketing strategies, and brand names —creating some homogeneity across markets. Thus, greater uniformity replaces diversity. Difficulty: 2 Medium Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 30) Agri-Corp manufactures large farm implements and currently sources compo nent parts for these large machines from fifteen different companies around globe. They use these sources to take advantage of lower costs. This demonstrates the idea of A) globalization of markets. B) containerization of production. C) dispersal of production. D) globalization of production. E) industrialization of markets. Answer: D Explanation: The globalization of production 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. Difficulty: 3 Hard Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 31) Which of these companies is taking advantage of the globalization of production? A) Daily Diamonds, an American jewelry manufacturer, buys diamonds from South Africa and exports them to India for the cutting process. B) Evan Swan, a U.S.-based fashion designer, is planning to open a flagship store in China to serve the Asian market. C) Uncle Crab, a U.K. fast food chain, serves customers worldwide through its local franchises. D) Silver Unicorn Inc. uses sales personnel from the respective host country to sell its products and services. E) Pizza Gallery, an Italian pizza chain, customizes its pizzas and pastas to suit the tastes of its American and Australian customers. Answer: A Explanation: The globalization of production 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 (such as labor, energy, land, and capital). Difficulty: 3 Hard Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 32) West Electronic 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 labor and land. This practice is an example of the A) globa lization of production. B) globalization of markets. C) dislocation of a developing nation's economy. D) restriction on foreign direct investment. E) regulation of the environment Answer: A Explanation: The globalization of production 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 (such as labor, energy, land, and capital). Difficulty: 2 Medium Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 33) The labor, energy, land, and capital a country relies on to source goods and services are known as A) trade tariffs. B) the globalization of markets. C) the marketing mix. D) the globalization of production. E) factors of production. Answer: E Explanation: The globalization of production 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 (such as labor, energy, land, and capital). Difficulty: 1 Easy Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 34) During early globalization efforts, outsourcing was typically confined to activities. A) marketing B) financial C) legal D) manufacturing E) service Answer: D Explanation: Early outsourcing efforts were primarily confined to manufacturing activities, such as those undertaken by Boeing and Apple. Increasingly, however, companies are taking advantage of modern communications technology, particularly the Internet, to outsource service activities to low-cost producers in other nations. Difficulty: 2 Medium Topic: What is Globalization? Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 35) Which global institution has focused on making low -interest loans to governments in poor nations that want to make significant infrastructure investments such as building a road or a bridge? A) World Trade Organization B) World Bank C) Peace Corps D) International Monetary Fund E) United Nations Answer: B Explanation: The World Bank was created in 1944 to promote economic development. It has focused on making low -interest loans to cash -strapped governments in poor nations that wish to undertake significant infrastructure investments (such as building dams or roads). Difficulty: 2 Medium Topic: Various Types of Institutions in Global Business Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 36) Countries that receive loans from the IMF are required to A) become a member of the United Nations. B) allow developed nations to create businesses in their country. C) enforce a democratic government. D) use the funds to help individual citizens. E) adopt specific economic policies to attain stabilization. Answer: E Explanation: IMF loans come with strings attached. In return for loans, the IMF requires nation -states to adopt specific economic policies aimed at returning their troubled economies to stability and growth. These requireme nts have sparked controversy. Some critics maintain that by telling national governments what economic policies they must adopt, the IMF is usurping the sovereignty of nation -states. Difficulty: 2 Medium Topic: Various Types of Institutions in Global Business Learning Objective: 01-01 Understand what is meant by the term globalization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation