a. They grow only their absolute gross domestic product (GDP).
b. Collectively, they command 48 percent of world trade.
c. They have uniform high-speed growth.
d. Collectively, they contribute approximately 90 percent of the global gross domestic product.
ANSWER: b
18. _____ is the sum of value added by residents, households, and government operating in an economy.
a. Foreign direct investment
b. Purchasing power parity
c. Gross domestic product
d. Intermediate consumption
ANSWER: c
19. Which of the following statements is true of purchasing power parity (PPP)?
a. It is the sum of value added by residents and households operating in an economy.
b. It is the management of value-added activities in other countries.
c. It is an investment made by firms within an industry in other countries.
d. It is an adjustment to reflect the differences in cost of living among different countries.
ANSWER: d
20. BRIC is an acronym for the emerging economies of _____.
a. Britain, Russia, India, and China
b. Brazil, Romania, India, and Chile
c. Belgium, Romania, Indonesia, and Chile
d. Brazil, Russia, India, and China
ANSWER: d
21. Which of the following is true of the Great Transformation?
a. It does not take purchasing power parity (PPP) into account.
b. It is the linear story of the high speed economic growth of the developed world.
c. It refers to emerging economies struggling to compete with developed nations.
d. It refers to the shift in economic weight and engines of growth toward emerging economies.
ANSWER: d
22. Which of the following is an economic example of the emergence of BRIC(S) during the Great Transformation?
a. China doubled its per capita income in about ten years.
b. From 2007-2017 Brazil accomplished an annual economic growth rate of 6%.
c. Managers in emerging economies command higher international premiums than managers in developed economies.
d. Japan has experienced uniform, high speed growth for the past 10 years.
ANSWER: a
23. Most emerging economies have experienced:
a. some significant slow down recently.
b. uniform high-speed growth.
c. a doubling of their per capita incomes within five years.
d. an increase in the number of employees.
ANSWER: a
24. More than 25 percent of global gross domestic product (on a PPP basis) in recent years comes from _____.
a. African economies
b. Latin America
c. Central and Eastern Europe
d. emerging economies, such as BRICS (Brazil, Russia, India, China, and South Africa)
ANSWER: d
25. The _____ consists of North America, Western Europe, and Japan.
a. base of the pyramid
b. Triad
c. top tier of the pyramid
d. triplex
ANSWER: b
26. Which of the following statements is true of the second tier of the global economy pyramid?
a. It consists of a billion people making $2,000 to $20,000 a year.
b. It mostly consists of people who live in the developed economies.
c. It mostly consists of people who live in North America, Western Europe, and Japan.
d. It consists of the vast majority of the people who make less than $2,000 a year.
ANSWER: a
27. Which of the following statements is true of the base of the pyramid?
a. It consists of a billion people making $2,000 to $20,000 a year.
b. It comprises people who live in the developed economies.
c. It refers to the people who live in North America and Western Europe.
d. It is ignored by most of the multinational enterprises.
ANSWER: d
28. Which of the following statements is true of expatriate managers?
a. They are managers who work abroad.
b. They are managers who work in domestic firms.
c. They are managers who work for the emerging economies they are a part of.
d. They are managers who work for local businesses in developed countries.