Deck 12: Globalization, Trade, and Corruption

Question 1

Facilitation payments violate anti-bribery laws in almost every nation but are still widely tolerated.

Answer 1

True

Question 2

Even as nations' nontariff barriers have generally fallen,tariffs have multiplied.

Answer 2

False

Question 3

One basic action that multinational corporations should take to fight corruption is to use face-to-face payments in place of electronic transfers.

Answer 3

False

Question 4

Agreements reached under GATT were incorporated in the WTO.

Question 5

Under GATT,the decision of a dispute body can be overturned only by the unanimous veto of all members.

Question 6

Only developed countries have been receptive to free market ideas.

Question 7

When networks of economic,political,social,and scientific interdependence span worldwide distances,this is called globalization.

Question 8

Bribes paid by managers of one corporation to managers of another are legal under the Foreign Corrupt Practices Act (FCPA).

Question 9

One main argument against protectionism is that a major cause of the rise in world trade is the widespread reduction in defensive barriers.

Question 10

Protectionism is principally an economic issue.

Question 11

Studies show that as anti-bribery laws in developed nations are enforced,corrupt countries receive less FDI from MNCs headquartered in less corrupt countries.

Question 12

NGOs are a major force in the ways that government and business operate.

Question 13

Globalization has been the official policy of the United States throughout most of its history.

Question 14

For corruption to exist there must be both demand and supply.

Question 15

"Competitive advantage of nations" is a phrase coined by Joseph Stiglitz,identifying a nation as having a cluster of similar producers which gives the nation a special advantage over other countries.

Question 16

The "Buy American" laws seek to influence governments and agencies to purchase U.S.-made goods and services rather than foreign-made goods and services.

Question 17

The great run of free trade ended with World War I,which inflamed global markets with national conflicts.

Question 18

The Association of Southeast Asian Nations was formed in 1967 by the Philippines,Indonesia,Malaysia,Singapore,Thailand,and China.

Question 19

World Bank and IMF loans usually go to developing countries.

Question 20

The current WTO-led multilateral trading system has yet to produce a major advance in trade liberalization.

Question 21

Which of the following laws raised 890 tariff lines covering tens of thousands of items and increasing the average American duty on imported goods?

A) The Fordney-McCumber Tariff Act
B) The Buy American Act
C) The Trade and Tariff Act
D) The Smoot-Hawley Tariff Act

Question 22

_____ occurs when networks of economic,political,social,military,scientific,and environmental interdependence grow to span worldwide distances.

A) Globalization
B) Sovereignty
C) Socialism
D) Protectionism

Question 23

Which of the following is a measure of social globalization?

A) Telephone traffic
B) The number of embassies in a country
C) Tariff rates
D) Import barriers

Question 24

What is the national treatment principle?

A) Increasing national power by managing the economy to create a trade surplus.
B) A principle of national self-sufficiency and economic independence.
C) Equal treatment for imported and local goods in a domestic market.
D) A principle enacted in some trade agreements requiring that if one participant extends any benefit to another,that participant must extend the same benefit to all.

Question 25

A policy of national self-sufficiency and economic independence is called:

A) an embargo.
B) autarky.
C) free trade.
D) a tariff.

Question 26

One of the measures of political globalization is:

A) inflows of foreign direct investment as a percent of GDP.
B) newspaper and book sales.
C) participation in international organizations.
D) trade as a percent of GDP.

Question 27

FDI is an example of which force in globalization?

A) Ideas
B) Capital
C) Labor
D) Technology

Question 28

Identify the force of globalization that comes under "ideas."

A) Wealth creation
B) Financial crises
C) Corporate citizenship
D) Health care

Question 29

A tax or duty charged by a government on goods moved across a border is known as a:

A) tariff.
B) subsidy.
C) quota.
D) trade barrier.

Question 30

All of the following are governmental forces of globalization EXCEPT:

A) erosion of sovereignty by capital markets.
B) pressure to lower trade barriers.
C) pressure to reduce social welfare for citizens.
D) creation of externalities such as resource depletion.

Question 31

Under which of the following forces of globalization does environmentalism come?

A) MNCs
B) Governments
C) Capital
D) Ideas

Question 32

Social globalization is based on:

A) specialization and international exchange.
B) trade and investment flows and restrictions.
C) measures of political cooperation between countries.
D) the flow of ideas,images,and information.

Question 33

Human rights are an example of which force in globalization?

A) Capital
B) Technology
C) Ideas
D) NGOs

Question 34

This is based on trade and investment flows and restrictions;measures include trade as a percent of GDP,inflows of foreign direct investment as a percent of GDP,tariff rates,and import barriers.

A) Social globalization
B) Economic globalization
C) Democratic globalization
D) Alternative globalization

Question 35

What is the purpose of the General Agreement on Tariffs and Trade (GATT)?

A) To devalue currencies and limit cross-border movement of funds.
B) To overcome shortages of private capital to make loans for rebuilding war-torn nations.
C) To raise the cost of imports,making them less competitive with similar domestic goods.
D) To expand trade by eliminating discriminatory barriers.

Question 36

Which of the following refers to a policy of increasing national power by managing the economy to create a trade surplus?

A) Capitalism
B) Laissez-faire
C) Mercantilism
D) Free trade

Question 37

Creation of externalities such as pollution and resource depletion come under which force of globalization?

A) MNCs
B) Governments
C) Capital
D) NGOs

Question 38

Transportation is an example of which force in globalization?

A) Capital
B) Ideas
C) NGOs
D) Technology

Question 39

The World Bank is an example of which force in globalization?

A) Multilateral organizations
B) Technology
C) Ideas
D) Labor

Question 40

What is the mainspring of globalization?

A) Educational changes
B) Trade
C) Culture
D) Changes in communications

Question 41

The World Trade Organization (WTO):

A) allows the defendant in a dispute to veto a decision if it disagreed.
B) is not a full-fledged international organization.
C) has been unsuccessful in adding to the GATT legacy of trade liberalization.
D) succeeded in launching a new round at meetings in Seattle in 1999.

Question 42

This is a treaty in which two or more nations agree to reduce or eliminate barriers,opening their borders to freer mutual trade.

A) Protectionism
B) Free trade agreement
C) Customs union
D) Global trade compliance

Question 43

Exporting a product at a price below the price it normally sells for in its home market is known as:

A) structural adjustment.
B) dumping.
C) free trade.
D) offshoring.

Question 44

This theory follows that maximum gain on a worldwide basis will be realized if there are no impediments to trade,if there is free competition in pricing,and if capital flows are unrestricted.

A) The marginalist theory
B) The law of comparative advantage
C) "Buy American" laws
D) The Doctrine of Protectionism

Question 45

The flow of goods and services across borders unhindered by government-imposed restrictions such as taxes,tariffs,quotas,and rules is known as:

A) free trade.
B) global trade compliance.
C) globalization.
D) sovereignty.

Question 46

All of the following countries are part of NAFTA except:

A) Argentina.
B) Canada.
C) the United States.
D) Mexico.

Question 47

The first step in the formation of this organization was taken in 1987 when the United States and Canada signed a free trade agreement.

A) IMF
B) EU
C) WTO
D) NAFTA

Question 48

These are laws that seek to influence governments and agencies to purchase U.S.-made goods and services rather than foreign-made goods and services.

A) Blue laws
B) "Buy American" laws
C) The laws of comparative advantage
D) Soft laws

Question 49

This agreement was formed in 1967 by five countries-the Philippines,Indonesia,Malaysia,Singapore,and Thailand.

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

Question 50

The uniform currency used by the European Union (EU)is called the:

A) euro.
B) dollar.
C) yen.
D) pound.

Question 51

A set of economic policies prescribed to correct flaws in a national economy is known as:

A) the Washington Consensus.
B) a structural adjustment program.
C) autarky.
D) liberalization.

Question 52

This is an agreement negotiated in 1991 among Argentina,Brazil,Paraguay,and Uruguay.

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

Question 53

This doctrine propounds that government should protect business interests from foreign competitors.

A) Protectionism
B) The law of comparative advantage
C) The marginalist theory
D) The Truman Doctrine

Question 54

The fundamental objective of this organization was to prevent a recurrence of Europe's devastating wars such as World War I and World War II.

A) IMF
B) EU
C) WTO
D) NAFTA

Question 55

In the Uruguay Round,developed countries concluded an Agreement on Trade-Related Aspects of Intellectual Property Rights that required participants to:

A) protect private property owners' rights in all countries.
B) protect property rights in products such as software,digital entertainment,and pharmaceuticals.
C) liberalize restrictions on direct investment in a wide range of areas.
D) limit the exportation of products by a business.

Question 56

This has been the official policy of the United States since the end of World War II.

A) Global trade compliance
B) Free trade
C) Globalization
D) Sovereignty

Question 57

What is the primary mission of the International Monetary Fund?

A) To promote international economic stability.
B) To promote long-term development in the poorest countries.
C) To promote international fair trade.
D) To overcome shortages of private capital.

Question 58

According to this theory,efficiency and the general economic welfare are optimized when each country produces that for which it enjoys a cost advantage.

A) The marginalist theory
B) The Doctrine of Protectionism
C) "Buy American" laws
D) The law of comparative advantage

Question 59

Which of the following refers to a set of free market policies imposed on developing nations by the IMF and the World Bank as loan conditions?

A) Structural adjustment program
B) Autarky
C) The Bretton Woods system
D) Washington Consensus

Question 60

All of the following are true of protectionism EXCEPT:

A) industries must be shielded from foreign competition.
B) large trade deficits of the United States must be reduced.
C) maximum gain on a worldwide basis will be realized if capital flows are unrestricted.
D) trade barriers in foreign countries restrict American imports to them.

Question 61

What is meant by a multilateral trade negotiation?

Question 62

What is extortion?

Question 63

The Foreign Corrupt Practices Act (FCPA):

A) can fine individuals up to $2 million and five years in prison for violations of the law's bribery provisions.
B) makes it a criminal rather than a civil offense to bribe an official of a foreign government.
C) makes it legal for bribes paid by managers of one corporation to managers of another.
D) contains an exception for facilitating payments intended only to restrict "routine governmental action."

Question 64

What are NAFTA,AFTA,and Mercosur?

Question 65

Discuss the main provisions of the Foreign Corrupt Practices Act (FCPA).

Question 66

Facilitating payments:

A) are small amounts of money demanded by minor officials to perform their regular duties.
B) refer to anything of value improperly requested or given in exchange for a corrupt action.
C) violate anti-bribery laws and are not tolerated in any nation.
D) are endemic and routine in most developed nations.

Question 67

What are the functions of the International Monetary Fund (IMF)?
D.C.Its governance mechanisms allocate votes based on financial contributions,which are in turn based on the output of national economies.IMF loans usually go to poor,indebted countries.Many loans are conditional.If the country accepts financial aid,it must agree to take actions that strengthen its economy.In the 1980s and 1990s,the organization often required structural adjustment programs.Because these policies were based on a philosophy of liberalization,deregulation,privatization,fiscal austerity,and tax reforms,it was criticized by global progressives as promoting a form of free market fundamentalism.The conditions in IMF loans were often said to be based on a Washington Consensus.British economist John Williamson set forth 10 policies that economists in the World Bank,IMF,and the U.S.Department of the Treasury prescribed as economic reforms for heavily indebted Latin American countries.He believed there was a consensus among them that these policies would promote growth.

Question 68

Discuss the free trade responses to protectionism.

Question 69

In the fight against corruption,this 1977 Act was the first major manifesto in the anti-corruption framework.

A) The Sarbanes-Oxley Act
B) The Smoot-Hawley Tariff Act
C) The Foreign Corrupt Practices Act
D) The Racketeer Influenced and Corrupt Organizations Act

Question 70

What are the Bretton Woods institutions?

Question 71

The debasement of integrity for money,position,privilege,or other self-benefit is termed as:

A) manipulation.
B) exploitation.
C) lobbying.
D) corruption.

Question 72

Discuss the major forces that have stimulated the growth of globalization in recent years.

Question 73

What is the European Union (EU)?

Question 74

Discuss some of the reasons for the failure of the WTO-led multilateral trading system in making major advances in trade liberalization.

Question 75

What are the basic reasons for protectionism existing in the trade histories of all nations?

Question 76

Explain the law of comparative advantage.

Question 77

In 2004,the United Nations added a tenth principle to the Global Compact requiring:

A) the effective abolition of child labor.
B) participant companies to adopt anti-corruption policies and controls.
C) respect for the protection of internationally proclaimed human rights.
D) the elimination of discrimination in employment and occupation.

Question 78

Discuss some basic actions multinational corporations can take to fight corruption.

Question 79

What is globalization?

Question 80

Why is it said that the 1930 Smoot-Hawley Tariff Act "added poison to the emptying well of global trade"? Give an example.