Test Bank Business & Society 8th Edition O.C. Ferrell, Linda Ferrell, Debbie Thorne, 9781948426510|ISBN 9781948426510

Global Business Today Global 8th Edition Hill Test Bank
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Answers are at the end of each chapter
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Chapter 01 Globalization Tru
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e / False Questions
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1. As a result of globalization, we have been moving toward a world in which national economies a
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re relatively self-contained entities.
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True False

2. By offering the same basic product worldwide, firms help to create a global market. T
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rue False

3. A company has to be the size of a multinational giant to facilitate, and benefit from, the gl
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obalization of markets. Q Q




True False

4. As a result of globalization, companies rarely need to customize marketing strategies, product f
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eatures, and operating practices in different countries.
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True False

5. Globalization has resulted in greater uniformity replacing diversity across national markets.
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True False

6. As firms follow each other around the world, they bring with them many of the assets that s
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erved them well in other national markets. Thus, greater diversity replaces uniformity.
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True False

7. Substantial impediments, such as barriers to foreign direct investment, make it difficult for firms t
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o achieve the optimal dispersion of their productive activities to locations around the globe.
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True False

8. The World Trade Organization, the International Monetary Fund and its sister institution the
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World Bank, and the United Nations were all created by voluntary agreement between individual nati
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on- states. Q




True False

,9. The International Monetary Fund and the World Bank were both created in 1944 by 44 nations t
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hat met at Bretton Woods, New Hampshire.
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True False

10. The WTO is seen as the lender of last resort to nation-
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states whose economies are in turmoil and whose currencies are losing value against those of other n
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ations.

True False

11. The IMF is less controversial than its sister institution, the World Bank. T
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rue False

12. In return for loans, the IMF requires nation-
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states to adopt specific economic policies aimed at returning their troubled economies to stability and g
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rowth.

True False

13. Foreign direct investment (FDI) occurs when a firm invests resources in business activities o
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utside its home country.
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True False

14. After World War II, the advanced nations of the West committed themselves to increasing b
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arriers to the free flow of goods, services, and capital between nations.
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True False

15. The Uruguay Round, held under the umbrella of GATT, extended GATT to cover services as well a
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s manufactured goods.
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True False

16. The lowering of trade and investment barriers allows firms to base production at the optimal l
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ocation for that activity.
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True False

17. As a result of international trade, the economies of the world’s nation-
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states are becoming less intertwined.
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True False

18. The globalization of markets and production and the resulting growth of world trade, foreign d
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irect investment, and imports all imply that firms are finding it easier to protect themselves from
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the attack of foreign competitors.
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,True False

19. Containerization has revolutionized the transportation business, significantly lowering the costs
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of shipping goods over long distances.
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True False

20. While advances in telecommunications are creating a global audience, advances in t
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ransportation are creating a global village.
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True False

21. The real costs of information processing and communication have fallen dramatically in the past t
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wo decades.
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True False

22. The Internet has been a major force facilitating international trade in services. T
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rue False

23. Countries that markedly increased their share of world output from 1960 to 2010 included
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Germany, France, and the United Kingdom.
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True False

24. The United States accounted for a significantly larger share of the world economy in 2011 than it d
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id in the 1960's.
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True False

25. Beginning in the 1970s, European and Japanese firms began to shift labor-
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intensive manufacturing operations from developing nations to their home countries where labor co
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sts were lower.
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True False

26. The stock of foreign direct investment refers to the total cumulative value of foreign i
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nvestments in a country. Q Q Q




True False

27. Throughout the 1990s, the amount of investment directed at both developed and developing
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nations increased dramatically
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True False

, 28. Among developing nations, the largest recipient of foreign direct investment has been China. T
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rue Q Q False

29. Although most international trade and investment is still conducted by large firms, many
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medium-
Qsize and small businesses are becoming increasingly involved in international trade and investmen
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t.

True False

30. The rise of the Internet is increasing the barriers that small firms face in building international s
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ales.

True False

31. Many of the former Communist nations of Europe and Asia seem to share a commitment to d
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emocratic policies and free market economies.
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True False

32. In the past quarter century, the volume of cross-
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border trade and investment has been growing less rapidly than global output.
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True False

33. One concern frequently voiced by globalization opponents is that falling barriers to international t
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rade destroy manufacturing jobs in wealthy advanced economies such as the United States and western
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Europe.

True False

34. It is possible that economic growth in developed nations has offset the fall in the share of n
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ational income enjoyed by unskilled workers, raising their living standards.
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True False




35. One concern of globalization opponents is that it undermines the influence of supranational
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organizations and promotes the sovereignty of individual nation-states.
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True False

36. In general, as countries get richer, they enact tougher environmental and labor regulations.
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