Chapter 02: The Evolution of International Business
1. The growth trends in China and India today illustrate the impact that international business has on blue-collar
and white-collar workers in wealthy countries as relatively low-skill factory jobs as well as high-skill service
profession jobs migrate overseas.
a. True
b. False
ANSWER: True
2. One way international trade benefits consumers is by providing lower living standards.
a. True
b. False
ANSWER: False
3. It is estimated that for every billion dollars worth of exports from the United States, 100,000 domestic jobs
are created.
a. True
b. False
ANSWER: False
4. Foreign direct investment (FDI) in a country brings funds and business culture from abroad, creates new
well- paying jobs, introduces innovative technologies, and enhances the skills of domestic workers.
a. True
b. False
ANSWER: True
5. The decoupling of world economic order and the move to a multipolar world helps explain why China is
now the world's largest recipient of FDI.
a. True
b. False
ANSWER: True
6. Singapore, a regional center for global companies, continues to attract sizable amounts of foreign investment given
its strategic location, world-class infrastructure, and productive workforce.
a. True
b. False
ANSWER: True
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, Chapter 02: The Evolution of International Business
7. Mercantilists believed that for a nation to become wealthy, that nation must export as much as possible and, in
turn, import as little as possible.
a. True
b. False
ANSWER: True
8. Factor price equalization theory, states that when factors are allowed to move freely among trading nations,
efficiency increases, which leads to superior allocation of production of goods and services among
countries.
a. True
b. False
ANSWER: True
9. Porter exemplifies China as a powerhouse for consumer electronics because of the quality and quantity
of its engineers, and the ability and willingness of Chinese consumers to try out new electronic products
that are perfected and later exported.
a. True
b. False
ANSWER: False
10. Porter stresses the importance of domestic demand for goods and services when determining a
nation’s competitive advantage. When domestic demand remains high, the number of suppliers will
also be high.
a. True
b. False
ANSWER: True
11. Competitive industrial structures are unlikely to create innovative or dynamic firms willing to compete
abroad. However, a monopolistic industry will foster innovative, cost efficient, aggressive firms that can adjust
to changing economic conditions at home and will be well prepared to compete abroad.
a. True
b. False
ANSWER: False
12. A specific tariff describes a tax on imports levied as a constant percentage of the monetary value of one unit
of the imported good.
a. True
b. False
ANSWER: False
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1. The growth trends in China and India today illustrate the impact that international business has on blue-collar
and white-collar workers in wealthy countries as relatively low-skill factory jobs as well as high-skill service
profession jobs migrate overseas.
a. True
b. False
ANSWER: True
2. One way international trade benefits consumers is by providing lower living standards.
a. True
b. False
ANSWER: False
3. It is estimated that for every billion dollars worth of exports from the United States, 100,000 domestic jobs
are created.
a. True
b. False
ANSWER: False
4. Foreign direct investment (FDI) in a country brings funds and business culture from abroad, creates new
well- paying jobs, introduces innovative technologies, and enhances the skills of domestic workers.
a. True
b. False
ANSWER: True
5. The decoupling of world economic order and the move to a multipolar world helps explain why China is
now the world's largest recipient of FDI.
a. True
b. False
ANSWER: True
6. Singapore, a regional center for global companies, continues to attract sizable amounts of foreign investment given
its strategic location, world-class infrastructure, and productive workforce.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 1
, Chapter 02: The Evolution of International Business
7. Mercantilists believed that for a nation to become wealthy, that nation must export as much as possible and, in
turn, import as little as possible.
a. True
b. False
ANSWER: True
8. Factor price equalization theory, states that when factors are allowed to move freely among trading nations,
efficiency increases, which leads to superior allocation of production of goods and services among
countries.
a. True
b. False
ANSWER: True
9. Porter exemplifies China as a powerhouse for consumer electronics because of the quality and quantity
of its engineers, and the ability and willingness of Chinese consumers to try out new electronic products
that are perfected and later exported.
a. True
b. False
ANSWER: False
10. Porter stresses the importance of domestic demand for goods and services when determining a
nation’s competitive advantage. When domestic demand remains high, the number of suppliers will
also be high.
a. True
b. False
ANSWER: True
11. Competitive industrial structures are unlikely to create innovative or dynamic firms willing to compete
abroad. However, a monopolistic industry will foster innovative, cost efficient, aggressive firms that can adjust
to changing economic conditions at home and will be well prepared to compete abroad.
a. True
b. False
ANSWER: False
12. A specific tariff describes a tax on imports levied as a constant percentage of the monetary value of one unit
of the imported good.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 2
