Test Bank
International
Business
Competing in the Global Marketplace
12th Edition
Charles Hill, G. Tomas M. Hult
,Chapter 1 Globalization
1) Since Wally's Whistles is a medium-size business, it wouldn't benefit from globalization.
Answer: FALSE
Explanation: A company does not have to be the size of multinational giants to facilitate, and
benefit from, the globalization of markets. In the United States, for example, according to the
International Trade Administration, more than 300,000 small and medium-size firms with fewer
than 500 employees exported in 2017, accounting for 98 percent of the companies that exported
that year.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
2) Globalization of production can help companies lower their overall cost structure or improve
the quality or functionality of their product offering.
Answer: TRUE
Explanation: The globalization of production refers to the sourcing of goods and services from
locations around the globe to take advantage of national differences in the cost and quality of
factors of production. By doing this, companies hope to lower their overall cost structure or
improve the quality or functionality of their product offering, thereby allowing them to compete
more effectively.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
,3) Johann's business does not make consumer products; therefore, it would not be likely to
participate in global markets.
Answer: FALSE
Explanation: Most global markets currently are not markets for consumer products—where
national differences in tastes and preferences are still often important enough to act as a brake on
globalization—but markets for industrial goods and materials that serve a universal need the world
over.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Outsourcing is a process that is limited to manufacturing enterprises.
Answer: FALSE
Explanation: Early outsourcing efforts were primarily confined to manufacturing activities.
Increasingly, however, companies are taking advantage of modern communications technology,
particularly the Internet, to outsource service activities to low-cost producers in other nations.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) The World Bank has focused on policing the world trading system and making sure
nation-states adhere to the rules laid down in trade treaties.
Answer: FALSE
Explanation: The World Trade Organization is primarily responsible for policing the world
trading system and making sure nation-states adhere to the rules laid down in trade treaties signed
by WTO member states. The World Bank was set up to promote economic development.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
2
, 6) When Cyprus had a financial crisis, it went to the World Bank, known as the lender of last
resort, to bail it out.
Answer: FALSE
Explanation: The IMF was established to maintain order in the international monetary system. It
is often seen as the lender of last resort to nation-states whose economies are in turmoil and whose
currencies are losing value against those of other nations.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
7) One of the UN's central mandates is the promotion of higher standards of living, full
employment, and conditions of economic and social progress and development.
Answer: TRUE
Explanation: Although the UN is perhaps best known for its peacekeeping role, one of the
organization's central mandates is the promotion of higher standards of living, full employment,
and conditions of economic and social progress and development—all issues that are central to the
creation of a vibrant global economy.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
8) The Uruguay Round, finalized in December 1993, reduced protection for patents, trademarks,
and copyrights.
Answer: FALSE
Explanation: Under the umbrella of GATT, the most recent negotiations to be completed, known
as the Uruguay Round, were finalized in December 1993. The Uruguay Round provided enhanced
protection for patents, trademarks, and copyrights.
Difficulty: 1 Easy
Topic: Drivers of Globalization
Learning Objective: 01-02 Recognize the main drivers of globalization.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
3
International
Business
Competing in the Global Marketplace
12th Edition
Charles Hill, G. Tomas M. Hult
,Chapter 1 Globalization
1) Since Wally's Whistles is a medium-size business, it wouldn't benefit from globalization.
Answer: FALSE
Explanation: A company does not have to be the size of multinational giants to facilitate, and
benefit from, the globalization of markets. In the United States, for example, according to the
International Trade Administration, more than 300,000 small and medium-size firms with fewer
than 500 employees exported in 2017, accounting for 98 percent of the companies that exported
that year.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
2) Globalization of production can help companies lower their overall cost structure or improve
the quality or functionality of their product offering.
Answer: TRUE
Explanation: The globalization of production refers to the sourcing of goods and services from
locations around the globe to take advantage of national differences in the cost and quality of
factors of production. By doing this, companies hope to lower their overall cost structure or
improve the quality or functionality of their product offering, thereby allowing them to compete
more effectively.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
,3) Johann's business does not make consumer products; therefore, it would not be likely to
participate in global markets.
Answer: FALSE
Explanation: Most global markets currently are not markets for consumer products—where
national differences in tastes and preferences are still often important enough to act as a brake on
globalization—but markets for industrial goods and materials that serve a universal need the world
over.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Outsourcing is a process that is limited to manufacturing enterprises.
Answer: FALSE
Explanation: Early outsourcing efforts were primarily confined to manufacturing activities.
Increasingly, however, companies are taking advantage of modern communications technology,
particularly the Internet, to outsource service activities to low-cost producers in other nations.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) The World Bank has focused on policing the world trading system and making sure
nation-states adhere to the rules laid down in trade treaties.
Answer: FALSE
Explanation: The World Trade Organization is primarily responsible for policing the world
trading system and making sure nation-states adhere to the rules laid down in trade treaties signed
by WTO member states. The World Bank was set up to promote economic development.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
2
, 6) When Cyprus had a financial crisis, it went to the World Bank, known as the lender of last
resort, to bail it out.
Answer: FALSE
Explanation: The IMF was established to maintain order in the international monetary system. It
is often seen as the lender of last resort to nation-states whose economies are in turmoil and whose
currencies are losing value against those of other nations.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
7) One of the UN's central mandates is the promotion of higher standards of living, full
employment, and conditions of economic and social progress and development.
Answer: TRUE
Explanation: Although the UN is perhaps best known for its peacekeeping role, one of the
organization's central mandates is the promotion of higher standards of living, full employment,
and conditions of economic and social progress and development—all issues that are central to the
creation of a vibrant global economy.
Difficulty: 1 Easy
Topic: What Is Globalization?
Learning Objective: 01-01 Understand what is meant by the term globalization.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
8) The Uruguay Round, finalized in December 1993, reduced protection for patents, trademarks,
and copyrights.
Answer: FALSE
Explanation: Under the umbrella of GATT, the most recent negotiations to be completed, known
as the Uruguay Round, were finalized in December 1993. The Uruguay Round provided enhanced
protection for patents, trademarks, and copyrights.
Difficulty: 1 Easy
Topic: Drivers of Globalization
Learning Objective: 01-02 Recognize the main drivers of globalization.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
3
