1. SchulzRobb Inc., a company based in England, engages in foreign direct investment in other countries such as India, Japan, and Brazil. SchulzRobb is a multinational enterprise.
a. True
b. False
ANSWER: True
2. Business leaders should focus on the top two tiers of the global economic pyramid because the base of the pyramid (BoP) does not offer many economic opportunities.
a. True
b. False
ANSWER: False
3. Individuals who make less than $2000 a year comprise the base of the pyramid (BoP).
a. True
b. False
ANSWER: True
4. George and John are both managers at Routen Plan Inc. based in Washington, but only George receives a significant international premium compensation as he is an expatriate manager of Routen Plan, Germany.
a. True
b. False
ANSWER: True
5. Formal institutions include culture, ethics, and values.
a. True
b. False
ANSWER: False
6. An Ecuadorian firm doing business in a neighboring, Spanish speaking, Latin American country faces a lower liability of foreignness than a Dutch firm doing business in the same country.
a. True
b. False
ANSWER: True
7. Croulene Corp, an American company, starts its operations in China. Croulene has an inherent disadvantage in China because of its nonnative status. This is an example of a liability of foreignness.
a. True
b. False
ANSWER: True
8. According to the Pendulum view on globalization, globalization is very recent and one-directional.
a. True
b. False
ANSWER: False
9. LindaLoel Corp. extensively uses the technique of scenario planning. Scenario planning is the identification and assessment of risks and the preparation to minimize the impact of high-risk, unfortunate events.
a. True
b. False
ANSWER: False
10. Semiglobalization suggests that barriers to market integration at borders are high, but not high enough to insulate countries from each other completely.
a. True
b. False
ANSWER: True
11. After WWII, major Western nations committed to global trade and investment. Between the 1950s and 1970s most non-western countries followed suit by adopting the view of a globalized world economy.
a. True
b. False
ANSWER: False
12. Semiglobalization is the perfect balance of total isolation and total globalization, offering a single, right way of doing business around the globe.
a. True
b. False
ANSWER: False
13. If the largest MNE, Walmart, were an independent country, it would be the 27th largest economy in the world.
a. True
b. False
ANSWER: True
14. Which of the following describes international business?
a. Firms collaborating with domestic entrants
b. Firms selling their businesses completely to foreign companies
c. Firms engaging in business abroad
d. Firms belonging to and doing business in emerging economies
ANSWER: c
15. Which of the following statements is true of foreign direct investment?
a. It is the act of buying an ownership stake within a country that provides capital.
b. It is the process of investing in, controlling, and managing value-added activities in other countries.
c. It is the process of tracking an index or measuring of a foreign market.
d. It is the act of investing in a foreign-owned company within a country.
ANSWER: b
16. Which of the following statements is true of the emerging economies?
a. They grow only their absolute gross domestic product (GDP).
b. They attract 60 percent of foreign direct investment (FDI) inflows and generate 40 percent FDI outflows.
c. They always manage to repeat their extraordinary growth sprint.
d. They contribute approximately 90 percent of the global gross domestic product.
ANSWER: b
17. Which of the following is true of emerging economies?
a. True
b. False
ANSWER: True
2. Business leaders should focus on the top two tiers of the global economic pyramid because the base of the pyramid (BoP) does not offer many economic opportunities.
a. True
b. False
ANSWER: False
3. Individuals who make less than $2000 a year comprise the base of the pyramid (BoP).
a. True
b. False
ANSWER: True
4. George and John are both managers at Routen Plan Inc. based in Washington, but only George receives a significant international premium compensation as he is an expatriate manager of Routen Plan, Germany.
a. True
b. False
ANSWER: True
5. Formal institutions include culture, ethics, and values.
a. True
b. False
ANSWER: False
6. An Ecuadorian firm doing business in a neighboring, Spanish speaking, Latin American country faces a lower liability of foreignness than a Dutch firm doing business in the same country.
a. True
b. False
ANSWER: True
7. Croulene Corp, an American company, starts its operations in China. Croulene has an inherent disadvantage in China because of its nonnative status. This is an example of a liability of foreignness.
a. True
b. False
ANSWER: True
8. According to the Pendulum view on globalization, globalization is very recent and one-directional.
a. True
b. False
ANSWER: False
9. LindaLoel Corp. extensively uses the technique of scenario planning. Scenario planning is the identification and assessment of risks and the preparation to minimize the impact of high-risk, unfortunate events.
a. True
b. False
ANSWER: False
10. Semiglobalization suggests that barriers to market integration at borders are high, but not high enough to insulate countries from each other completely.
a. True
b. False
ANSWER: True
11. After WWII, major Western nations committed to global trade and investment. Between the 1950s and 1970s most non-western countries followed suit by adopting the view of a globalized world economy.
a. True
b. False
ANSWER: False
12. Semiglobalization is the perfect balance of total isolation and total globalization, offering a single, right way of doing business around the globe.
a. True
b. False
ANSWER: False
13. If the largest MNE, Walmart, were an independent country, it would be the 27th largest economy in the world.
a. True
b. False
ANSWER: True
14. Which of the following describes international business?
a. Firms collaborating with domestic entrants
b. Firms selling their businesses completely to foreign companies
c. Firms engaging in business abroad
d. Firms belonging to and doing business in emerging economies
ANSWER: c
15. Which of the following statements is true of foreign direct investment?
a. It is the act of buying an ownership stake within a country that provides capital.
b. It is the process of investing in, controlling, and managing value-added activities in other countries.
c. It is the process of tracking an index or measuring of a foreign market.
d. It is the act of investing in a foreign-owned company within a country.
ANSWER: b
16. Which of the following statements is true of the emerging economies?
a. They grow only their absolute gross domestic product (GDP).
b. They attract 60 percent of foreign direct investment (FDI) inflows and generate 40 percent FDI outflows.
c. They always manage to repeat their extraordinary growth sprint.
d. They contribute approximately 90 percent of the global gross domestic product.
ANSWER: b
17. Which of the following is true of emerging economies?