Copyright 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior

1 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Global Business Today, 11e (Hill) Chapter 1 Globalization

1) As a result of globalization, we have been moving toward a world in which national economies are relatively self-contained entities.

Answer: FALSE

Explanation: Over the past five decades, a fundamental shift has been occurring in the world economy. We have been moving away from a world in which national economies were relatively self-contained entities, isolated from each other by barriers to cross-border trade and investment; by distance, time zones, and language; and by national differences in government regulation, culture, and business systems.

Difficulty: 1 Easy

Topic: What is Globalization?

Learning Objective: 01-01 Understand what is meant by the term globalization.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

2) To truly benefit from globalization, a firm needs to be a multinational conglomerate rather than a small or mid-size company.

Answer: FALSE

Explanation: A company does not have to be the size of a multinational giant to benefit from globalization. Currently, small and medium-size companies account for 33 percent of the value of U.S. exports of manufactured goods.

Difficulty: 1 Easy

Topic: What is Globalization?

Learning Objective: 01-01 Understand what is meant by the term globalization.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

3) In today's marketplace, outsourcing efforts are confined to manufacturing activities.

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: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

(Global Business Today, 11e Charles Hill) (Test Bank all Chapters) 1 / 4

2 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.4) The World Trade Organization, the International Monetary Fund and its sister institution the World Bank, and the United Nations were all created by voluntary agreement between individual nation-states.

Answer: TRUE

Explanation: Over the past half century, a number of important global institutions have been created to help manage, regulate, and police the global marketplace and to promote the establishment of multinational treaties to govern the global business system. These include the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO); the International Monetary Fund (IMF) and its sister institution, the World Bank; and the United Nations (UN). All these institutions were created by voluntary agreement between individual nation-states, and their functions are enshrined in international treaties.

Difficulty: 1 Easy

Topic: Various Types of Institutions in Global Business

Learning Objective: 01-01 Understand what is meant by the term globalization.

Bloom's: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

5) The WTO polices the world trading system, and without this organization, the globalization of markets might not be where it is today.

Answer: TRUE

Explanation: The WTO 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. Without an institution such as the WTO, the globalization of markets and production is unlikely to have proceeded as far as it has.

Difficulty: 1 Easy

Topic: Various Types of Institutions in Global Business

Learning Objective: 01-01 Understand what is meant by the term globalization.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

6) Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country.

Answer: TRUE

Explanation: Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country.

Difficulty: 1 Easy

Topic: Drivers of Globalization

Learning Objective: 01-02 Recognize the main drivers of globalization.

Bloom's: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation 2 / 4

3 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

7) The retaliatory trade policies of the 1920s and 1930s contributed to the Great Depression.

Answer: TRUE

Explanation: Many of the barriers to international trade in the 1920s and 1930s took the form of high tariffs on imports of manufactured goods. The typical aim of such tariffs was to protect domestic industries from foreign competition. One consequence, however, was "beggar thy neighbor" retaliatory trade policies, with countries progressively raising trade barriers against each other. Ultimately, this depressed world demand and contributed to the Great Depression of the 1930s.

Difficulty: 2 Medium

Topic: Drivers of Globalization

Learning Objective: 01-02 Recognize the main drivers of globalization.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

8) The Uruguay Round extended GATT to cover services as well as manufactured goods.

Answer: TRUE

Explanation: The Uruguay Round further reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the World Trade Organization to police the international trading system.

Difficulty: 2 Medium

Topic: Drivers of Globalization

Learning Objective: 01-02 Recognize the main drivers of globalization.

Bloom's: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

9) Enhanced protection for patents and trademarks was one focus of the Uruguay Round.

Answer: TRUE

Explanation: The Uruguay Round further reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the World Trade Organization to police the international trading system.

Difficulty: 1 Easy

Topic: Drivers of Globalization

Learning Objective: 01-02 Recognize the main drivers of globalization.

Bloom's: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

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4 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.10) The lowering of trade and investment barriers creates more opportunities for companies to have the world as their market.

Answer: TRUE

Explanation: The lowering of trade and investment barriers allows firms to view the world, rather than a single country, as their market.

Difficulty: 1 Easy

Topic: Drivers of Globalization

Learning Objective: 01-02 Recognize the main drivers of globalization.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

11) In recent years, the economies of the world's nation-states have become less intertwined as a result of international trade.

Answer: FALSE

Explanation: The economies of the world's nation-states are becoming more intertwined. As trade expands, nations are becoming increasingly dependent on each other for important goods and services.

Difficulty: 1 Easy

Topic: Drivers of Globalization

Learning Objective: 01-02 Recognize the main drivers of globalization.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

12) The United Nations created the Millennium Development Goals to increase the number of entrepreneurial activities around the world.

Answer: FALSE

Explanation: In 2000, the United Nations established the Millennium Development Goals to reduce the number of people who live in extreme poverty by 2015.

Difficulty: 2 Medium

Topic: Drivers of Globalization

Learning Objective: 01-02 Recognize the main drivers of globalization.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

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