Deck 1: Globalization and the Multinational Corporation

Question 1

Between 2007 and 2010 the world witnessed a full-blown financial crisis that was attributed to

A) subprime mortgage repricing.
B) quantitative easing by the Fed.
C) foreign exchange imbalances.
D) banking failures.

Answer 1

A

Question 2

Which one of the following has a single currency managed by a common central bank?

A) ASEAN
B) European Union
C) World Trade Organization
D) The Organization for Economic Cooperation and Development

Answer 2

B

Question 3

________ is a company that is commonly owned and operated by two or more firms.

A) Joint Venture
B) Franchising
C) Licensing
D) Royalty

Answer 3

A

Question 4

Which one of the following provides a specialized sales or service strategy,offers support at various levels,and occasionally invests in the firm in exchange for periodic fees?

A) joint venture
B) franchising
C) licensing
D) royalty

Question 5

Which one of the following is an investment from which the payoff over time is derived from the performance of an underlying asset?

A) a common stock certificate
B) a derivative security
C) a corporate bond
D) a mortgage bond

Question 6

Which organization was originally designed to encourage free trade between member states by regulating and reducing tariffs on traded goods?

A) NAFTA
B) EU
C) ASEAN
D) GATT

Question 7

It is the right given to firms to produce specific products in exchange for a ________ fee.

A) Joint Venture
B) Securitization
C) Licensing
D) Royalty

Question 8

What is the name for an organization that invests a large pool of money on behalf of another organization such as a bank,insurance company,or a retirement fund?

A) hedge fund
B) private equity firm
C) institutional investor
D) mutual fund

Question 9

According to the United Nations Conference on Trade and Development,what percentage of China's GDP in 2009 was attributed to the trade sector?

A) 70%
B) 60%
C) 65%
D) 50%

Question 10

The main resources of the International Monetary Fund are provided by

A) the members of the World Bank.
B) its member countries primarily through payments of quotas.
C) members of the Organization for Economic Cooperation and Development.
D) the Bank for International Settlements.

Question 11

What is the name of the international organization that was founded to ensure the stability of the international system of payments and exchange rates among national currencies?

A) The International Monetary Fund
B) The World Bank
C) The World Trade Organization
D) The International Finance Corporation

Question 12

Which of the following was created in an effort to promote free trade?

A) World Trade Organization
B) the Sarbanes-Oxley Act
C) multilateral development banks
D) the Organization for Economic Cooperation and Development

Question 13

In 1992,the European Union decided to create an economic as well as a monetary union involving the introduction of

A) a pegged currency known as the euro.
B) a managed currency know as the ecu.
C) a freely floating exchange rate for a currency known as the euro.
D) a single European currency managed by a European central bank.

Question 14

The European Union is a free trade association that is based on a(n)

A) economic and monetary union.
B) economic union.
C) monetary union.
D) a commonly agreed upon list of lowered tariffs.

Question 15

What is the name for the shifting of non-strategic functions to specialist firms to reduce costs?

A) outsourcing
B) multinational company
C) globalization
D) transnational corporations

Question 16

Which of the following is NOT a protectionist tendency?

A) tariffs
B) comparative advantage
C) non-tariff barriers
D) quotas

Question 17

The World Bank's main goal is to ensure the stability of

A) the international monetary and financial system only in developed countries.
B) the international monetary and financial system in developing countries.
C) the international monetary and financial system in both developed and developing countries.
D) only the financial system in both developed and developing countries.

Question 18

Which one of the following is renowned for its high-quality databases on economic and social data?

A) WTO
B) EU
C) OECD
D) World Bank

Question 19

The legal and financial structure controlling the relationship between a company's shareholders and its management is called the

A) Agency Theory.
B) Stakeholder Alternative.
C) Corporate Governance.
D) Concentrated Ownership.

Question 20

This organization was established in 1995 to replace the GATT Treaty.

A) ASEAN
B) EEC
C) NAFTA
D) WTO

Question 21

Why do the anti-globalists see globalization as a threat to the home country?

Question 22

In the economic field of agency theory,which one of the following is viewed as an agent with the principals who are most importantly the firm's shareholders?

A) suppliers
B) employees
C) managers
D) attorneys

Question 23

What do the Enron Corporation,Worldcom,and Tyco have in common?

A) They were part of the oil and gas industry.
B) All three were owned by a single parent company.
C) Each one was an example of sound corporate governance.
D) All were involved in corporate scandals.

Question 24

State-owned investment funds that manage global portfolios of investment assets are known as

A) hedge funds.
B) sovereign wealth funds.
C) city-state pensions.
D) multinational mutual funds.

Question 25

How can financial globalization be blamed for the loss of fiscal autonomy to a nation?

Question 26

What economic field of study explores the problems associated with a firm that arise from a separation of ownership and control and devises ways to resolve them?

A) futures and options
B) agency theory
C) foreign direct investment
D) franchising

Question 27

What are some of the basic beliefs of the anti-globalists?

Question 28

Globally why are certain types of firms seeking others with poor corporate governance?

Question 29

Why might setting up production facilities abroad lead to expanded sales in local markets?

Question 30

Which of the following are institutional banks that provide financial support and professional advice for developing countries?

A) multilateral development banks
B) central banks
C) investment banks
D) Barclays bank

Question 31

Institutional investors play important roles in financial markets.Explain.

Question 32

What is the name of the international organization that fosters monetary and financial cooperation and serves as a bank for central banks?

A) WTO
B) EU
C) World Bank
D) Bank for International Settlements

Question 33

Which one of the following is the most common method of overcoming the agency problem in developed countries outside of the U.S.and the U.K?

A) concentrated ownership
B) currency boards
C) hostile takeovers
D) foreign direct investment