Deck 1: Globalization

Question 1

The investing of resources in business activities outside a firm's home country is referred to as:

A) international trade
B) domestic direct investment
C) transnational barter
D) foreign direct investment
E) outsourcing

Answer 1

D

Question 2

Which of the following was not an outcome of the Uruguay Round of the GATT?

A) reduced trade barriers
B) extended GATT to cover services as well as manufactured goods
C) established the World Trade Organization
D) provided extended protection for patents, trademarks, and copyrights
E) reduced agricultural subsidies

Answer 2

E

Question 3

The factors of production include:

A) information technology
B) process design
C) markets
D) labour
E) research and development

Answer 3

D

Question 4

HYPERLINK "" Firm X exports a number of products to users in other countries.This practice is referred to as __________.

A) world exchange
B) international trade
C) cross-national barter
D) situational commerce
E) multinational diversification

Question 5

According to the opening case,the most important reason to assemble iPhones in China was due to:

A) lower labour costs in China
B) foreign exchange rates
C) consumer preferences for foreign items
D) the ability to scale production up and down
E) tariffs and trade barriers

Question 6

Although Inco is a Canadian company,it has invested substantial business resources in activities outside Canada.This practice is referred to as:

A) transnational commerce
B) foreign direct investment
C) international trade
D) organizational diversification
E) outsourcing

Question 7

The _______ is seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations.

A) International Monetary Fund
B) International bank
C) United Nations
D) Canada's Export Development Corporation
E) Bank of Canada

Question 8

Sourcing goods and services from locations around the globe is known as __________.

A) melding of markets
B) integration of markets
C) deregulation
D) globalization of production
E) globalization of markets

Question 9

Although this organization is perhaps best known for its peacekeeping role,one of its central mandates is the promotion of higher standards of living,full employment,and conditions of economic and social progress and development.What is it called?

A) World Bank
B) GATT
C) United Nations
D) Canada's Export Development Corporation
E) Bank of Canada

Question 10

The globalization of __________ 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 (such as labour,energy,land,and capital).

A) information technology
B) process design
C) markets
D) production
E) R&D

Question 11

The trend toward a more integrated and interdependent global economic system that has been in place for many years is commonly referred to as:

A) market standardization
B) cross-border integration
C) globalization
D) consumerism
E) nationalization

Question 12

Who is responsible for policing the world trading system?

A) International Monetary Fund
B) The World Bank
C) The World Trade Organization
D) Canada's Export Development Corporation
E) Bank of Canada

Question 13

The _______ was created in 1944 by 44 nations that met in Breton Woods,New Hampshire.

A) International bank
B) World Monetary Fund
C) World Trade Organization
D) International Monetary Fund
E) United Nations

Question 14

Which of the following refers to the exporting of goods or services to consumers in another country?

A) situational commerce
B) world exchange
C) international trade
D) cross-national barter
E) foreign investment

Question 15

After World War II,the West committed to removing trade barriers between nations because of what experience?

A) the loss of production from the war
B) retaliatory trade policies leading to the Depression
C) the General Agreement on Tariffs and Trade
D) massive waves of immigrants seeking jobs
E) the shift away from production to consumption

Question 16

What was created at the same time as the International Monetary Fund?

A) World Bank
B) GATT
C) United Nations
D) Canada's Export Development Corporation
E) Bank of Canada

Question 17

The __________ is a treaty designed to remove barriers to the free flow of goods,services,and capital between nations.

A) Global Agreement on Tariffs and Commerce
B) United Nations Treaty on Trade
C) General Agreement on Tariffs and Trade
D) Multi-National Agreement on Tariffs and Commerce
E) The ILO

Question 18

_______ are the two macro factors that seem to underlie the trend toward greater globalization.

A) The increase in global economic stability, and the slowdown in technological change
B) The increase in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and global economic stability
C) The decline in barriers to the free flow of goods, services, and capital that has occurred in the past 10 years, and the slowdown in technological change
D) The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and technological change
E) Technological Change and the convergence of global product preferences

Question 19

Under the umbrella of GATT there have been eight rounds of negotiations among member states.The _______ was the most recent round of negotiations.

A) Uruguay Round
B) Malaysian Symposium
C) German Round
D) New Zealand Symposium
E) Cancun Round

Question 20

XYZ,Inc.is an auto parts distributing warehouse that exports many of its products to consumers in other countries.XYZ Inc.can be described as engaging in:

A) international trade.
B) cross-border investments.
C) product development.
D) trading barriers.
E) international procurement.

Question 21

If the Doha talks are ever completed,the biggest gain will come from what?

A) trademarks
B) agriculture
C) intellectual property
D) consumer goods
E) manufactured goods

Question 22

Since 1950,world trade has grown faster than what?

A) world wage rates
B) world population growth
C) world income
D) world output
E) world housing production

Question 23

The acronym WTO stands for:

A) Western Trade Organization
B) World Tax Organization
C) World Trade Organization
D) World Tariff Organization
E) World Trade Operations

Question 24

According to your text,between 1950 to 2000,as world trade expanded by 20 times,world output grew by about _______.

A) 12 percent
B) 1 percent
C) 25 percent
D) 6 ½ times
E) 20 times

Question 25

According to our textbook,the single most important technological innovation has been the development of the __________.

A) telegraph
B) microprocessor
C) ocean container
D) airplane
E) telephone

Question 26

The globalization of markets,the growth of world trade,and the increase in FDI has had what effect? ______________.

A) a decrease in production
B) a decrease in world trade
C) companies find their home markets under attack from foreign competitors
D) companies are reducing their profits
E) companies are during to protectionist measures

Question 27

_______ is the theory that predicts that the number of transistors on a computer chip doubles every 24 months.

A) Brennan's Theorem
B) Bailey's Law
C) Moore's Law
D) Ivan's Law
E) Global Micro Accelerant (GMA) Law

Question 28

Evidence suggests that FDI is playing a(n):

A) decreasing role in the world economy
B) increasing role in the world economy for services but a decreasing role in the world economy for manufactured goods
C) increasing role in the world economy for manufactured goods but a decreasing role in the world economy for services
D) increasing role in the world economy
E) a limited role in the world economy

Question 29

Suppose Petro Canada,an international oil company,had a complaint about a trade issue.The __________,a governing body established at the Uruguay Round in 1993 to police the international trading system,is an organization that Petro Canada could take its complaint to.

A) World Trade Organization
B) International Trade Monitoring Bureau
C) World Tariff and Trade Agency
D) International Trade Monitoring Agency
E) The United Nations

Question 30

According to our textbook,the growing integration of the world economy is:

A) increasing the intensity of competition within the home market of a company in a wide range of manufacturing and service industries
B) decreasing the intensity of global competition in manufacturing industries, and increasing the intensity of domestic competition in services
C) increasing the intensity of global competition in manufacturing industries, and decreasing the intensity of domestic competition in services
D) narrowing the scope of global competition in a wide range of service, commodity, and manufacturing industries
E) Widening the opportunities for competing with manufacturing companies within their home market and narrowing the opportunities for competing with service companies in their home market.

Question 31

The acronym GATT stands for:

A) Global Agreement on Taxation and Tariffs
B) Global Association of Technology and Trade
C) General Agreement on Taxation and Trademarks
D) General Agreement on Tariffs and Trade
E) General Accord of Transportation and Trade

Question 32

Since 1992,most of the world's changes to FDI have done what?

A) blocked FDI
B) created a more favourable environment for FDI
C) had no impact on FDI
D) decreased production
E) decreased wealth

Question 33

Which of the following is a major cause for lowering the trade barriers of markets and production?

A) Technological change
B) Increased labour mobility
C) Elastic demand
D) Corporate greed
E) Consumer demand

Question 34

In the past decades,many countries,in addition to reducing trade barriers,have done what?

A) decreased production
B) increased wages
C) removed restrictions to FDI
D) increased tariffs
E) joined the United Nations

Question 35

Many of the changes that countries have made pertaining to foreign direct investment regulations have:

A) made it harder for foreign companies to enter their markets
B) made it easier for foreign companies to enter their markets
C) had no effect on the ease upon which foreign companies can enter their markets
D) made it easier to foreign producers of raw materials to enter their markets but more difficult for foreign producers of finished products to enter their markets
E) prevented the expropriation of business assets by a foreign government

Question 36

Between 1992 and 2010,the total flow of FDI from all countries increase by about _______.

A) 2 times
B) 3 times
C) 6 times
D) 7 times
E) 9 times

Question 37

The agency established at the 1993 Uruguay Round to police the international trading system is the __________.

A) Global Trade Enforcement Administration
B) World Tariff and Trade Bureau
C) International Trade Enforcement Agency
D) World Trade Organization
E) The European bank of Reconstruction and Development

Question 38

The steep drop in world trade occurred when?

A) 1950-1951.
B) 1955-1956.
C) 1995-1996.
D) 2005-2006.
E) 2008-2009.

Question 39

Which of the following statements is consistent with data from the World Trade Organization?

A) the volume of world trade has grown faster than the volume of world output since the 1950s.
B) the volume of world trade has grown slower than the volume of world output since the 1950s.
C) the volume of world trade and the volume of world output have grown at approximately the same rate since the 1950s.
D) the volume of world trade and the volume of world output have remained constant since the 1950s.
E) the volume of world trade is inversely related to the growth of world output.

Question 40

The average yearly outflow of FDI increased from about $25 billion in 1975 to a record of _______________ in 2007,though it has fallen more recently.

A) $500 billion
B) $73 billion
C) $1 trillion
D) $2 trillion
E) $11 trillion

Question 41

In 1960,the U.S.accounted for about _____ of world output as measured by GDP.

A) 10.0%
B) 23.0%
C) 30.0%
D) 38.3%
E) 54.0%

Question 42

The Web is viewed as a global what?

A) equalizer
B) way of decreasing production
C) force for decreasing FDI
D) way of reaching businesses at the expense of consumer
E) way for government to market to its population

Question 43

As a result of a variety of innovations,the real costs of information processing and communication have __________ over the past two decades.

A) fallen slightly
B) increased slightly
C) remained constant
D) fallen dramatically
E) had no impact on the cost of international business

Question 44

In 2013,the U.S.'s largest trade partner when it comes to exports from the United States was ___________________.

A) United Kingdom
B) Mexico
C) China
D) Canada
E) South Korea

Question 45

According to your textbook,between 1930 and 1990,the cost of a three-minute phone call between New York and London fell from $244.65 to $3.32.This decrease can be mainly contributed to

A) open communication between governments.
B) the advent of the microprocessor.
C) continuing efforts to globalize.
D) high corporate ethical standards.
E) the deregulation of the telecommunications industry.

Question 46

In the 1960s,what was then seen as an economic threat to Europe?

A) The dominance of U.S. firms
B) Technological innovations
C) Low-cost transportation
D) Low-cost global communication networks
E) Reduction in trade barriers

Question 47

As of 2014 the number of Internet users around the world exceeds what?

A) 5 million
B) 100 million
C) 1 billion
D) 3 billion
E) 5 billion

Question 48

If we look into the future,most forecasts now predict a __________ in world output accounted for by developing nations such as China,India,Indonesia,and South Korea,and a __________ in the share enjoyed by rich industrialized countries such as Britain,Japan,and the United States.

A) rapid rise; rapid decline
B) slight rise; slight decline
C) rapid decline; rapid rise
D) rapid rise; slight decline
E) stay the same; slight decline

Question 49

According to your text,the World Bank estimates that today's developing nations may account for more than _______ percent of world economic activity by 2020.

A) 35
B) 50
C) 55
D) 65
E) 60

Question 50

In recent years,all of the following countries have seen their relative share of world output fall except:

A) United States
B) France
C) Germany
D) China
E) United Kingdom

Question 51

Which country was the world's most dominant industry power was in the early 1960s?

A) Japan
B) The United Kingdom
C) Germany
D) The United States
E) Canada

Question 52

Which of the following is an example of a developing nation?

A) Thailand
B) Britain
C) Japan
D) United States
E) Canada

Question 53

Although the characteristics of the global economy have changed dramatically over the past 50 years,as late as the 1960s all of the following demographic characteristics were true except:

A) the U.S. dominated the world economy
B) small, U.S. entrepreneurial firms dominated the international business scene
C) the U.S. dominated the world foreign direct investment picture
D) the U.S. was the world's largest industrial power
E) the U.S. dominated world trade

Question 54

The relative decline of the developed countries' share of world output _________________.

A) will reduce the living standards of the citizens of developed countries.
B) will increase competition for scarce resources and create political instability.
C) reflects the growing economic and industrial strength of developing countries.
D) will decrease prices but also reduce wages in Canada
E) will decrease job opportunities in Canada

Question 55

The foreign direct investment by non-U.S.firms was motivated primarily by the following two factors:

A) the desire to disperse production activities to optimal locations; and the desire to build a direct presence in major foreign markets
B) the desire to disperse production activities to optimal locations; and the desire to influence foreign exchange rates
C) the desire to influence foreign exchange rates; and the desire to influence political developments in foreign countries
D) the desire to build a direct presence in major foreign markets; and the desire to influence political developments in foreign countries
E) the desire to reduce dependence on the United States and to increase direct access to markets

Question 56

_______ is not considered to be a "developing" nation.

A) Brazil
B) India
C) China
D) Japan
E) Mexico

Question 57

Throughout the 1990s,the amount of investment directed at both developed and developing nations did what?

A) stayed the same
B) decreased
C) increased
D) was highly variable
E) decreased, then increased

Question 58

_______ was not mentioned in our textbook as major innovation in transportation technology.

A) Commercial jet aircraft
B) Super freighters
C) E-commerce
D) The introduction of containerization
E) Both containerization and e-commerce were not mentioned

Question 59

Due to containerization,the transportation costs associated with the globalization of production have:

A) remained the same
B) increased dramatically
C) declined
D) increased slightly
E) reduced insurance costs

Question 60

According to our textbook,e-commerce retail sales are expected to reach _____ by 2018 in the United states alone.

A) $1 billion
B) $50 billion
C) $500 billion
D) $750 billion
E) $1 trillion

Question 61

The economies of most of the former Communist countries can best be described as:

A) in poor condition with high risk associated with doing business there
B) steady growth, especially since 2009
C) dominated by multinationals
D) robust and growing stronger
E) closed to many international businesses due to high tariffs

Question 62

What does NAFTA stand for?

A) North American Free Trade Agreement
B) North Atlantic Free Trade Agency
C) North American Federation of Trade Advocates
D) National Alliance for Technology Advancement
E) North American Federal Treaty Association

Question 63

Critics use the following argument to suggest that globalization is a contributing factor to an increase in pollution.

A) globalization results in an increase in the amount of activity that takes place in companies that do not have adequate pollution controls
B) globalization results in increased commerce between countries, which results in an increase in the amount of transportation activity (e.g. trains, barges, air cargo, trucks, etc.)
C) firms that operate in countries that have adequate pollution regulations have a tendency to move their manufacturing operations to countries that have less stringent or no pollution controls to avoid the cost of regulation
D) globalization results in increased production, which has the undesirable side-effect of increased pollution
E) people in developing countries are used to coping with more pollution

Question 64

If China continues to grow at its current rate,by 2020 the average income per capita will be about $13,000,roughly equivalent to what country today?

A) Canada
B) United States
C) Spain
D) India
E) Latin America

Question 65

Since the 1960s,what has been a notable trend regarding multinational enterprises?

A) the decline of the multinational enterprise
B) the decline of the Canadian multinational enterprise
C) the rise of non-U.S. multinationals
D) the decline of the Japanese multinational enterprise
E) the rise of U.S. multinationals

Question 66

Outsourcing has even extended to the Canadian _______ industry.

A) auto
B) mineral extraction
C) services
D) home construction
E) lumber

Question 67

_______ is not a benefit of globalization.

A) Lowering prices for goods
B) Raising the incomes of consumers
C) Slowing economic growth
D) Helping to create jobs in all countries that choose to participate
E) More leisure time

Question 68

Among developing nations,the largest recipient of foreign direct investment has been which country?

A) China
B) India
C) Japan
D) Canada
E) the United States

Question 69

One frequently voiced concern about globalization is that it destroys manufacturing jobs in wealthy advanced economies such as Canada.The basic thrust of the critics' argument is:

A) developing nations will recruit employees from the more advanced economies, thereby depleting their labour pools
B) globalization increases the pace of the shift from a world economy based on manufactured goods to a world economy based on services
C) falling trade barriers allows firms to move their manufacturing activities offshore to countries where wage rates are much lower
D) the governments of developing countries will heavily subsidize their primary industries, making competing products produced in advanced economies less attractive
E) Canadian workers are overpaid and the true value of a manufacturing job is much lower

Question 70

Economists argue that increased international trade and cross-border investments will result in __________ prices for goods and services.

A) higher
B) stable
C) lower
D) unstable
E) variable

Question 71

Economists,politicians,and business leaders believe that the _______ to international trade and investment is the engine driving the global economy toward greater prosperity.

A) falling barriers
B) cross-border investments
C) U.N. policies
D) trading barriers
E) NAFTA

Question 72

Since the 1960s,there have been two notable trends in the demographics of the multinational enterprise.These two trends have been:

A) the rise of non-U.S. multinationals and the disappearance of mini-multinationals
B) the decline of non-U.S. multinationals and the decline of mini-multinationals
C) the decline of non-U.S. multinationals and the growth of mini-multinationals
D) the rise of non-U.S. multinationals and the growth of mini-multinationals
E) the rise of U.S. multinationals and the growth of mini-multinationals

Question 73

What kind of enterprise is a business that has productive activities in two or more countries?

A) cross-cultural
B) multinational
C) varied-national
D) diverse-national
E) multi-domestic

Question 74

Recently there has been _______ in the number of smaller firms that are multinationals.

A) a significant growth
B) no change
C) a significant decline
D) some growth
E) some decline

Question 75

Which of the following statements is not true regarding the majority of Latin American countries?

A) governments are selling state-owned enterprises to private investors
B) foreign investment is welcome
C) debt and inflation are down
D) neither democracy nor free market reforms have seemed to take hold
E) None of these answers is correct

Question 76

Many critics of globalization argue that outsourcing leads to increased use of _________ labour practices in developing countries.

A) exploitive
B) fair
C) underground
D) neo-colonialist
E) non-competitive

Question 77

The last quarter of the 20^th century experienced __________ in the global economy.

A) increased stability
B) slow-moving
C) virtually no changes
D) rapid changes
E) great concerns over potential disruptions

Question 78

Disturbing signs of growing unrest and totalitarian tendencies continue to be seen in many _______ states.

A) Western European
B) European
C) Northern European
D) Eastern European
E) South American states

Question 79

Iceculture Inc.,of Ontario employs 40 people and exports around the world.It would be considered

A) a multinational company.
B) a transnational company.
C) a cross-border national company.
D) a mini-multinational.
E) a U.S. dominated company.

Question 80

General Electric Corporation has productive activities in a number of countries.As a result,it would be appropriate to refer to General Electric as a __________ corporation.

A) transnational
B) diverse-national
C) cross-national
D) multinational
E) global