International Business: The New Realities 5th edition by S Tamer Cavusgil test bank
AACSB: Application of Knowledge
22) International business today is predominantly the domain of large, multinational companies.
Answer: FALSE
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
23) Exporting is an entry strategy involving the sale of products or services to customers located abroad.
Answer: TRUE
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
24) A country's economic assets are also known as factors of production.
Answer: TRUE
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
25) The two primary types of international investment are portfolio investment and foreign direct investment.
Answer: TRUE
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
26) Over the last few decades, export activity by nations has grown more quickly than has domestic production.
Answer: TRUE
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
27) In the past, international trade and investment activities were mainly conducted by companies that sold services.
Answer: FALSE
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
28) Although services trade is growing rapidly, the value of merchandise trade is still much larger.
Answer: TRUE
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
29) In a short essay, explain the four trends that provide evidence for the globalization of markets. Provide an example to illustrate one of the trends.
Answer: In practical terms, the globalization of markets is evident in several related trends. First is the unprecedented growth of international trade. For example, in 1960, cross-border trade was modest—about $300 billion per year. Today, it accounts for a substantial proportion of the world economy, with world exports alone amounting to some $16 trillion annually—that is, $16,000,000,000,000! Second, trade between nations is accompanied by substantial flows of capital, technology, and knowledge. In 2004, total cross-border bandwidth in digital data transfer and communications was practically zero. Today, total cross-border bandwidth flows now exceed 400,000 gigabits per second. Virtually every type of international transaction now includes a digital component. The third trend is the development of highly sophisticated global financial systems and mechanisms that facilitate the cross-border flow of products, money, technology, and knowledge. Fourth, globalization has brought about a greater degree of collaboration among nations through such organizations as the World Trade Organization and the International Monetary Fund.
Diff: 2: Moderate
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Analytical Thinking
30) In a short essay, explain the main differences between international portfolio investment and foreign direct investment.