ANSWER: a
29. Which of the following statements is true of international premium?
a. It is a pay raise for domestic employees.
b. It is the money paid to domestic firms by foreign firms.
c. It is the amount of money paid by international firms to government.
d. It is a significant pay raise a manager gets when working overseas.
ANSWER: d
30. Which of the following statements is true of the study of global business?
a. It is very interdisciplinary.
b. It has no unified framework.
c. It has five core perspectives.
d. It draws on only two business disciplines, finance and strategy.
ANSWER: a
31. Which of the following statements is true of institutions?
a. They generate 40 percent foreign direct investment (FDI) outflows.
b. They mean the formal and informal rules of the game.
c. They are also called emerging economies.
d. They are firms engaging in foreign direct investment.
ANSWER: b
32. A(n) _____ is a leading perspective in global business that suggests that firm performance is, at least in part, determined by its internal capital and capabilities.
a. product-based view
b. institution-based view
c. resource-based view
d. profit-based view
ANSWER: c
33. _____ is the inherent disadvantage that firms from other countries experience in host countries because of their nonnative status.
a. Foreign premium
b. Liability of foreignness
c. Liability of localization
d. International premium
ANSWER: b
34. MaltHanks Inc., a leading American firm, starts its operations in China. It incurs a lot of additional costs in comparison to the local firms. These costs originate in limited local knowledge and local stakeholders’ discriminatory attitudes. Which of the following best describes the problem faced by MaltHanks?
a. Foreign premium
b. Liability of foreignness
c. Liability of localization
d. International premium
ANSWER: b
35. Which of the following statements is true of foreign firms?
a. They easily adjust to laws, regulations, and rules of host nations.
b. They focus only on a firm’s internal environment.
c. They do not dominate nonnative markets.
d. They are a close integration of countries and peoples of the world.
ANSWER: c
36. According to the pendulum view on globalization, _____ existed for more than two millennia, with earliest traces discovered in Phoenician, Assyrian, and Roman times.
a. multinational enterprises
b. liability of foreignness
c. international premium
d. scenario planning
ANSWER: a
37. According to the pendulum view on globalization, which of the following statements is true of globalization?
a. It is not one-directional.
b. It is a fairly new concept.
c. It refers to multinational enterprises.
d. It refers to the identification and assessment of risks.
ANSWER: a
38. The Four Tigers refers to ____.
a. The Triad of developed economies (North America, Western Europe, and Japan) plus China
b. The noncommunist countries (Argentina, Brazil, India, and Mexico) that focused on fostering and protecting domestic industries in the aftermath of WWII
c. The economies of Hong-Kong, Singapore, South Korea, and Taiwan that achieved developed (high income) status and inspired more countries to join the world economy.
d. The emerging economies of Brazil, Russia, India and China
ANSWER: c
39. Ashestate Inc. recently set up a risk management department. What is a task the risk management department is likely taking on?
a. addressing interdepartmental conflict
b. setting expatriate manager pay scales
c. planning protests of globalization
d. engaging in extensive scenario planning
ANSWER: d
40. Which of the following is true of The Great Recession of 2008-2009?
a. The crisis showed, for better or worse, how isolated the global economy had become.