Deck 1: Globalization

Question 1

The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil.

Answer 1

True
Explanation: The IMF is often 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.

Question 2

Globalization refers to the shift toward a more integrated and interdependent world economy.

Answer 2

True
Explanation: Globalization refers to the shift toward a more integrated and interdependent world economy.

Question 3

Moore's Law predicts that the power of microprocessor technology doubles and its cost of production declines in half every 18 months.

Answer 3

True
Explanation: Moore's Law predicts that the power of microprocessor technology doubles and its cost of production declines in half every 18 months.

Question 4

As firms follow each other around the world,they bring with them many of the assets that served them well in other national markets.Thus,greater diversity replaces uniformity.

Question 5

The GATT succeeded the World Trade Organization (WTO).

Question 6

After World War I,the advanced nations of the West committed themselves to removing barriers to the free flow of goods,services,and capital between nations.

Question 7

In any society,the media are the primary conveyors of culture.

Question 8

Tastes and preferences of consumers in different nations are beginning to converge on some global norm.

Question 9

The most global markets currently are markets for consumer products.

Question 10

Because of globalization,companies rarely need to customize marketing strategies,product features,and operating practices in different countries.

Question 11

The volume of world output has grown faster than the volume of world merchandise trade since the 1950s,according to data from the World Trade Organization.

Question 12

The dominance of large multinational British firms on the international business scene is one of the changing trends of globalization.

Question 13

The IMF is less controversial than its sister concern,the World Bank.

Question 14

World merchandise trade includes trade in manufactured goods,agricultural goods,and services.

Question 15

The Internet has acted as a regulatory brake on unfettered international trade in business.

Question 16

Over its entire history,the WTO has promoted the lowering of barriers to cross-border trade and investment.

Question 17

Trade in services now accounts for more than half of the value of all international trade.

Question 18

As transportation costs associated with the globalization of production decline,dispersal of production to geographically separate locations becomes more economical.

Question 19

A company has to be a major multinational corporation to facilitate,and benefit from,the globalization of markets.

Question 20

Substantial impediments,such as barriers to foreign direct investment,make it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe.

Question 21

In the 1970s,European and Japanese firms began to shift labor-intensive manufacturing operations from their home markets to developing nations where labor costs were lower.

Question 22

Due to benefits associated with free trade and investment,the gap between the rich and poor nations of the world has reduced.

Question 23

Many of the former Communist nations of Europe and Asia seem to share a commitment to democratic policies and free market economies.

Question 24

Support for the antiglobalization effort goes beyond a core group of anarchists.

Question 25

Most forecasts now predict a rapid rise in world output accounted for by developing nations such as China,India,and South Korea,and a relative decline in the share enjoyed by rich industrialized countries such as Britain and the United States.

Question 26

Throughout most of Latin America,governments have sold state-owned enterprises to private investors and foreign investment is welcomed.

Question 27

The merging of historically distinct and separate national markets into one huge global marketplace is referred to as the:

A)globalization of production.
B)localization of markets.
C)offshore outsourcing.
D)globalization of markets.

Question 28

_____ refers to the shift toward a more integrated and interdependent world economy.

A)Universalization
B)Mass customization
C)Globalization
D)Internationalization

Question 29

A firm that imports products from other countries can be termed an international business.

Question 30

The range of problems confronted by a manager in an international business is wider and the problems themselves are more complex than those confronted by a manager in a domestic business.

Question 31

In the 1960s,global business activity was dominated by large Japanese multinational corporations.

Question 32

As the world's largest industrial power,the United States accounted for a significantly larger share of the world economy in 2008 than it did in the 1960's.

Question 33

The stock of foreign direct investment refers to the total cumulative value of foreign investments in a country.

Question 34

Automobile companies promote different car models in different countries depending on a range of factors such as demographics,local taste,local fuel costs,income levels,traffic congestion,and cultural values.This demonstrates that:

A)significant differences still exist among national markets.
B)cultural diversity has been replaced by global uniformity.
C)the global market is less complex than national markets.
D)national markets are giving way to global markets.

Question 35

Highly indebted poor countries (HIPCs)are those economies that will be better served by pursuing protectionist policies than by free trade.

Question 36

A slump in foreign direct investment into developed nations from 1998 to 2000 was followed by a surge in 2001 to 2003.

Question 37

One concern of globalization opponents is that it undermines the influence of international organizations and promotes the sovereignty of individual nation-states.

Question 38

Despite all the talk about the emerging global village,differences between countries such as cultures and political systems are profound and enduring.

Question 39

What percentage of exporting firms in the United States are small businesses that employ less than 100 people?

A)22
B)47
C)67
D)90

Question 40

The arguments of those who support globalization are limited by the absence of a compelling body of theory and evidence.

Question 41

A software company that uses Indian engineers to perform maintenance functions on software designed in the United States is benefiting from:

A)outsourcing.
B)exporting.
C)licensing.
D)franchising.

Question 42

According to the UN Charter,which of the following is a purpose of the UN?

A)To be a center for harmonizing the actions of nations
B)To commit member nations to lower trade barriers
C)To provide interest-free loans to poor countries to implement infrastructure projects
D)To push for the creation of regional free trade agreements

Question 43

Why was the World Bank created?

A)To maintain order in the international monetary system
B)To promote economic development
C)To regulate what economic policies nations adopt
D)To maintain peace and security

Question 44

Boeing outsources nearly 30% of the production of its aircraft to foreign suppliers.What could be the rationale behind such a move?

A)It is difficult for firms like Boeing to achieve the optimal dispersion of their productive activities to locations around the globe.
B)Outsourcing to foreign suppliers is in accordance with diplomatic treaties signed with other countries.
C)Foreign suppliers are not governed by strict regulations followed by companies in the U.S.and Boeing also saves on tax payments.
D)A global web of suppliers yields a better final product,which enhances the chances of Boeing winning a greater share of total orders for aircraft.

Question 45

Sony Corporation sources goods and services for its electronics products from different locations around the globe in an attempt to take advantage of differences in the cost and quality of factors of production.This practice is made possible by the:

A)globalization of production.
B)localization of markets.
C)focus on regulation.
D)homogeneity of markets.

Question 46

Which of the following statements best supports the claim that "greater uniformity replaces diversity" in the context of global markets?

A)Because of differences in business systems and legal regulations,companies have to customize their marketing strategies,product features,and operating practices to best match conditions in a particular country.
B)As rival global firms follow each other across countries,they bring with them their brand names,products,and marketing strategies from other national markets,thus creating homogeneity across markets.
C)Truly innovative companies succeed by developing products that serve specific needs of the local markets.
D)The volume of goods,services,and investment crossing national borders has expanded at a slower rate than world output for more than half a century.

Question 47

Which of the following is an argument put forth by critics of the IMF?

A)It lowers barriers to the free flow of goods across national borders.
B)It has rarely given loans to countries in dire need of assistance.
C)It usurps the sovereignty of nation-states by telling governments what economic policies they must adopt.
D)Its lending policies have been skewed in favor of developed western countries.

Question 48

When states become members of the United Nations,they agree to accept the obligations of the:

A)Vienna Convention.
B)UN Charter.
C)London Protocol.
D)Warsaw Pact.

Question 49

How has the WTO helped globalization of markets and production?

A)It has made low-interest loans available to cash-strapped governments in poor nations.
B)It required the borrowing nation-states to adopt specific economic policies aimed at economic growth.
C)It sought to create a more open global business system unencumbered by barriers to trade and investment between countries.
D)It has helped major nations to launch a coordinated policy response to the global financial crisis.

Question 50

Although early outsourcing efforts were primarily confined to _____,increasingly,companies are taking advantage of outsourcing for _____.

A)healthcare;manufacturing
B)manufacturing;services
C)consulting;manufacturing
D)manufacturing;agriculture

Question 51

Although Boeing is incorporated in the United States,a supplier in Singapore makes the doors for the nose landing gear,and suppliers in Italy manufacture wing flaps.Boeing is taking part in:

A)exporting.
B)licensing.
C)outsourcing.
D)franchising.

Question 52

Why do many U.S.companies employ Indian software engineers to perform maintenance functions on software designed in the U.S.?

A)It compresses the time and lowers the costs required to develop new software programs.
B)It is in accordance with the treaty signed between the governments of the U.S.and India.
C)It helps companies overcome the shortfall of qualified personnel in the U.S.
D)It creates more low-skilled jobs in the U.S. ,resulting in better economic growth.

Question 53

_____ 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.

A)Globalization of markets
B)Production orientation
C)Commoditization
D)Globalization of production

Question 54

The most global markets currently are markets for:

A)intellectual capital.
B)consumer goods.
C)industrial goods.
D)healthcare services.

Question 55

Globalization results in a greater degree of _____ across markets than would be present otherwise.

A)regulatory control
B)diversity
C)homogeneity
D)heterogeneity

Question 56

Identify the international treaty that committed signatories to lowering barriers to the free flow of goods across national borders and is the predecessor to the WTO.

A)The North American Free Trade Agreement
B)The G-20
C)The Warsaw Pact
D)The General Agreement on Tariffs and Trade

Question 57

The G20 is comprised of representatives of the European Union,the European Central Bank,and representatives of the 19 largest economies of the world.Who are the representatives of these economies?

A)Finance ministers and central bank governors
B)Prime ministers and defense ministers
C)Presidents and finance ministers
D)Heads of government and army chiefs

Question 58

Why was the International Monetary Fund established?

A)To maintain order in the international monetary system
B)To usurp sovereignty of borrowing nations
C)To promote respect for human rights
D)To regulate policies of poor nations and create infrastructure development

Question 59

The _____ was established in 1945 by 51 countries committed to preserving peace through international cooperation and collective security.

A)Greenpeace organization
B)Amnesty International
C)League of Nations
D)The United Nations

Question 60

The G-20 was originally established to serve which of the following objectives?

A)To launch a coordinated policy response to the global financial crisis that started in America and then rapidly spread around the world
B)To formulate a coordinated policy response to financial crises in developing nations
C)To promote policies aimed at improving standards of living and employment in developing nations
D)To shore up the economies of troubled nations by providing interest-free loans

Question 61

The advanced industrial nations of the West committed themselves after World War II to removing barriers to the free flow of goods,services,and capital between nations.This goal was enshrined in the:

A)Inter-American Treaty of Reciprocal Assistance.
B)Comprehensive Economic Partnership Agreement.
C)General Agreement on Tariffs and Trade.
D)North American Free Trade Agreement.

Question 62

Identify a macro factor that seems to underlie the trend toward greater globalization.

A)The increase in global economic stability
B)Reversal of deregulation trends
C)Implementation of protectionist policies
D)The decline in barriers to trade

Question 63

Which of the following would be the biggest gain for poor countries from the 2001 Doha WTO talks?

A)Protection from international competition
B)Reduction in tariff on agricultural products
C)Better antidumping laws
D)Regulating economic policies of HIPCs

Question 64

Approximately 90 percent of the changes that countries have made pertaining to foreign direct investment regulations have:

A)made firms consider their own country as their main market.
B)created a more favorable environment for FDI.
C)insulated nations from the impact of changes in economies of other countries.
D)strengthened laws restricting and regulating the flow of FDI.

Question 65

Which of the following agencies was established at the 1993 Uruguay Round?

A)Global Trade Enforcement Administration
B)World Tariff and Trade Bureau
C)International Trade Enforcement Agency
D)World Trade Organization

Question 66

The motive behind the high tariffs imposed by nations on imports of manufactured goods prior to World War II was to:

A)deter any possible attempts to undermine national sovereignty.
B)protect domestic industries from foreign competition.
C)boost national revenues affected by the Great Depression.
D)prevent multinational companies from taking away jobs based in those countries.

Question 67

In 2001,the WTO launched a new round of talks aimed at further liberalizing the global trade and investment framework.This was held at:

A)Uruguay.
B)Doha.
C)Kyoto.
D)Seattle.

Question 68

Although Gillette is an American company,it has invested substantial business resources in activities outside the United States.This practice is referred to as:

A)transnational commerce.
B)foreign direct investment.
C)third party outsourcing.
D)organizational divestment.

Question 69

The lowering of trade and investment barriers:

A)protects domestic firms from competition with foreign firms.
B)weakens the national sovereignty of the countries.
C)allows firms to base production at the optimal location for that activity.
D)helps governments fund infrastructure projects.

Question 70

Which of the following is a key macro factor that underlies the trend toward greater globalization?

A)Technological change,particularly in communication,information processing,and transportation
B)Uniformity achieved in the level of education and standards of living across the world
C)Establishment of global institutions like the WTO and IMF to promote spread of globalization
D)Increase in subsidies to ailing sectors like agriculture

Question 71

Barriers to international trade are said to have contributed to:

A)the Cold War.
B)World War II.
C)the Great Depression.
D)the dot-com boom of the 1990s.

Question 72

As of 2008-09,the G20 works to:

A)address the concerns of underdeveloped nations regarding the effects of globalization.
B)formulate policies to counter hunger and poverty in underdeveloped nations of the world.
C)provide a forum through which major nations attempted to launch a coordinated policy response to the global financial crisis.
D)help create a unified action plan to counter the threat of global terrorism and poverty in developing nations of the worlD.

Question 73

Which of the following is part of the agenda of the Doha Round of talks launched by the WTO?

A)Limit the use of antidumping laws
B)Protect domestic industries from foreign competition
C)Increase subsidies to make domestic products cheaper
D)Persuade member governments to cut defense spending

Question 74

Cisco Systems exports a number of products to consumers in other countries.This practice is referred to as:

A)world exchange.
B)international trade.
C)cross-national barter.
D)situational commerce.

Question 75

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

Question 76

Which of the following statements is consistent with data from the World Trade Organization with regard to the volume of world merchandise trade?

A)The volume of world trade has grown faster than the world economy since the 1950.
B)Since the mid-1980s,the value of international trade in services has reduced considerably.
C)More and more firms are assembling their products in one single nation to save costs and time.
D)Firms are finding their home markets protected from foreign competitors.

Question 77

Which of the following factors was a contributor to the Great Depression?

A)World War II that began in Europe and quickly spread to other parts of the world
B)The spread of Communist ideologies across Europe and parts of Asia
C)The influx of cheap foreign labor into the United States
D)Countries progressively raising trade barriers against each other

Question 78

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

A)third party outsourcing.
B)divestment.
C)speculative investment.
D)foreign direct investment.

Question 79

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

A)Enforced high tariffs on imports of manufactured goods
B)Extended GATT to cover services as well as manufactured goods
C)Established the World Trade Organization
D)Provided enhanced protection for patents,trademarks,and copyrights

Question 80

How does the lowering of barriers to international trade help firms?

A)It protects them from domestic competition.
B)It allows them to view the world as their market.
C)It drives up costs because they assemble their products in different countries.
D)It puts a brake on globalization of both markets and production.