Test Bank – Global Business, 6th Edition by Mike W. Peng

Test Bank for Global Business, 6th Edition by Mike W. Peng (Complete Chapters) | Chap 1 to 17

Chapter 1
True / False

1. Global business is defined as business around the globe, including both international and domestic business activities.
a. True
b. False
ANSWER: True
RATIONALE: This statement accurately reflects the bydefinition of global business provided in the
textbook, which encompasses both cross-border international activities and
domestic business activities, rather than focusing solely on international aspects.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-1 International Business and Global Business
LEARNING OBJECTIVES: GLOB.PENG.27.01.01 - Outline the concepts of international business and global
business.
KEYWORDS: Bloom’s: Remember

2. The global economy in 2024 was approximately $114 trillion in size based on total global GDP calculated at official
exchange rates.
a. True
b. False
ANSWER: True
RATIONALE: This statement correctly cites the size of the global economy in 2024 as
approximately $114 trillion when measured by total global GDP at official,
nominal exchange rates, demonstrating the massive scale of the global economy.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-2 Why Study Global Business?
LEARNING OBJECTIVES: GLOB.PENG.27.01.02 - Identify the reason why it is important to study global
business.
KEYWORDS: Bloom’s: Remember

3. The resource-based view focuses primarily on external environmental factors that determine firm success.
a. True
b. False
ANSWER: False
RATIONALE: This statement is incorrect. The resource-based view focuses on internal firm-
specific resources and capabilities, while the institution-based view deals with
external environmental factors. The resource-based view examines what unique
internal assets enable firms to succeed.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-3 A Unified Framework
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Chapter 1
LEARNING OBJECTIVES: GLOB.PENG.27.01.03 - State one fundamental question and two core perspectives
in the study of global business.
KEYWORDS: Bloom’s: Remember

4. The pendulum view of globalization suggests that globalization always moves in one direction toward greater
integration.
a. True
b. False
ANSWER: False
RATIONALE: This statement is incorrect. The pendulum view specifically suggests that
globalization is bidirectional, swinging back and forth between periods of greater
integration and periods of fragmentation or deglobalization, rather than moving in
just one direction.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-4 Globalization and Semiglobalization
LEARNING OBJECTIVES: GLOB.PENG.27.01.04 - Describe globalization, semiglobalization, and risk
management.
KEYWORDS: Bloom’s: Understand

5. BRICS includes Brazil, Russia, India, China, and South Africa as major emerging economies.
a. True
b. False
ANSWER: True
RATIONALE: This statement correctly identifies the five countries that make up BRICS: Brazil,
Russia, India, China, and South Africa, which expanded from the original BRIC
grouping when South Africa was added.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-4 Globalization and Semiglobalization
LEARNING OBJECTIVES: GLOB.PENG.27.01.04 - Describe globalization, semiglobalization, and risk
management.
KEYWORDS: Bloom’s: Remember

6. Just-in-case management prioritizes building organizational slack to enhance resilience against disruptions.
a. True
b. False
ANSWER: True
RATIONALE: This statement accurately describes just-in-case management, which emphasizes
building organizational slack through resources like inventory, multiple suppliers,
and redundancy to create resilience against potential supply chain disruptions and
unexpected events.
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Chapter 1
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-5 Debates and Extensions
LEARNING OBJECTIVES: GLOB.PENG.27.01.05 - Participate in two leading debates concerning global
business.
KEYWORDS: Bloom’s: Understand

7. Economic integration makes war and conflict more costly and less likely to occur between countries.
a. True
b. False
ANSWER: True
RATIONALE: This statement correctly reflects the institution-based view that economic
integration creates interdependencies that make conflict more expensive and
disruptive, thereby contributing to peace and stability by raising the costs of
warfare between economically connected countries.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: Chapter 1, Section 1-6 Management Savvy: The Future of Global Business in a
Less Global World
LEARNING OBJECTIVES: GLOB.PENG.27.01.06 - Draw implications for action.
KEYWORDS: Bloom’s: Understand

8. The textbook structure includes four parts: foundations, tools, strategy, and functional areas.
a. True
b. False
ANSWER: True
RATIONALE: This statement correctly identifies the four-part structure of the global business
textbook: Part I (foundations), Part II (tools), Part III (strategy), and Part IV
(functional areas), which provides a systematic approach to understanding the
discipline.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-7 Structure of the Discipline and the Book
LEARNING OBJECTIVES: GLOB.PENG.27.01.07 - Follow the structure of the discipline and the book.
KEYWORDS: Bloom’s: Remember

Multiple Choice

9. What is the traditional definition of international business (IB)?
a. A business that operates exclusively within domestic markets
b. A business that provides services to multinational enterprises only

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Chapter 1
c. A business that focuses only on importing goods from foreign countries
d. A business that engages in international economic activities or the action of doing business abroad
ANSWER: d
RATIONALE: International business is defined as either a firm that conducts cross-border
economic activities or the act of conducting business operations in foreign markets,
encompassing both aspects of international commerce.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Chapter 1, Section 1-1 International Business and Global Business
LEARNING OBJECTIVES: GLOB.PENG.27.01.01 - Outline the concepts of international business and global
business.
KEYWORDS: Bloom’s: Remember

10. How does global business differ from traditional international business?
a. Global business involves larger companies while international business includes small enterprises.
b. Global business requires government approval while international business operates independently.
c. Global business focuses only on developed economies while international business includes emerging
markets.
d. Global business includes both international and domestic business activities while international business
focuses mainly on foreign entrants.
ANSWER: d
RATIONALE: Global business provides a comprehensive perspective that encompasses both
cross-border activities and domestic business operations, rather than focusing
solely on the foreign entrant perspective that characterizes traditional international
business approaches.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: Chapter 1, Section 1-1 International Business and Global Business
LEARNING OBJECTIVES: GLOB.PENG.27.01.01 - Outline the concepts of international business and global
business.
KEYWORDS: Bloom’s: Understand

11. A publishing company competes globally with rivals from different countries, yet must win adoption in each local
market. This scenario best illustrates which concept?
a. Global business where international and domestic competition boundaries become blurred
b. Traditional international business focusing on foreign market entry strategies
c. Multinational enterprise expansion through foreign direct investment
d. Domestic business operations with limited international exposure
ANSWER: a
RATIONALE: This scenario demonstrates how global business involves competition that
transcends traditional international-domestic boundaries, where firms compete
globally yet must succeed locally in each market they enter.
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