Question 1

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

Accepted Answer

The WTO is not a lender of last resort. The International Monetary Fund (IMF) is an organization that provides loans to countries experiencing economic difficulties.

Question 2

Globalization has resulted in greater uniformity replacing diversity across national markets.

Accepted Answer

Globalization has led to the convergence of consumer preferences, production processes, and marketing methods across national borders, resulting in greater uniformity and standardization in many aspects of life, including consumer products, food, fashion, and entertainment. This has displaced some local traditions, cultures, and diversity.

Question 3

Containerization has revolutionized the transportation business,significantly lowering the costs of shipping goods over long distances.

Accepted Answer

Containerization has led to more efficient and cost-effective transportation of goods over long distances. It has standardized the shipping process and reduced the need for manual handling, resulting in faster and safer delivery of products.

Question 4

In return for loans,the IMF requires nation-states to adopt specific economic policies aimed at returning their troubled economies to stability and growth.

Accepted Answer

This statement is true. The IMF provides loans to countries in exchange for policy commitments aimed at restoring their economic stability and growth. These policies typically include measures such as reducing government spending, increasing taxes, and implementing structural reforms.

Question 5

While advances in telecommunications are creating a global audience,advances in transportation are creating a global village.

Accepted Answer

This statement is true. Telecommunications allow people from around the world to communicate and connect with each other instantly, while advances in transportation make it easier and quicker for people to physically travel and explore other parts of the world, creating a sense of a global village.

Question 6

By offering the same basic product worldwide,firms help to create a global market.

Accepted Answer

When firms offer the same product worldwide, they are promoting a standardized product and this helps in creating a global market as customers all over the world can access the same product.

Question 7

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.

Accepted Answer

All three organizations were established through international treaties signed and ratified by participating nation-states, indicating voluntary agreement among them.

Question 8

The lowering of trade and investment barriers allows firms to base production at the optimal location for that activity.

Accepted Answer

By lowering trade and investment barriers, firms are able to access different markets and resources that may be more efficient or cost-effective for their production. This leads to the ability to base production at the optimal location, which can result in increased efficiency and productivity for the firm.

Question 9

As a result of international trade,the economies of the world's nation-states are becoming less intertwined.

Accepted Answer

This statement is false. International trade has led to increased economic interdependence and interconnectedness between nation-states.

Question 10

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

Accepted Answer

Globalization has made it easier for companies to expand to different countries, but it also requires them to adapt their marketing strategies, product features, and operating practices to local cultures and regulations. This is known as localization and is necessary for companies to succeed in different markets.

Question 11

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.

Accepted Answer

When firms expand globally, they often bring standardized practices and products, which can lead to increased uniformity rather than diversity.

Question 12

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

Accepted Answer

Having learned from past experience, the advanced industrial nations of the West committed themselves after World War II to progressively reducing barriers to the free flow of goods, services, and capital among nations.

Question 13

The Uruguay Round,held under the umbrella of GATT,extended GATT to cover services as well as manufactured goods.

Accepted Answer

The Uruguay Round, which took place between 1986 and 1994, did indeed extend GATT (the General Agreement on Tariffs and Trade) to include service industries such as telecommunications, banking, and insurance. This expansion of GATT led to the creation of the World Trade Organization (WTO), which oversees global trade agreements and helps resolve disputes between member countries.

Question 14

The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that met at Bretton Woods,New Hampshire.

Accepted Answer

This statement is true.

Question 15

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.

Accepted Answer

The statement suggests that barriers to foreign direct investment hinder firms from achieving optimal dispersion of their productive activities around the world, which is true.

Question 16

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

Accepted Answer

The World Bank is less controversial than its sister institution, the IMF. The World Bank has focused on making low-interest loans to cash-strapped governments in poor nations that wish to undertake significant infrastructure investments, while 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 17

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

Accepted Answer

This statement is incorrect. As a result of globalization, national economies have become more interconnected and interdependent than ever before.

Question 18

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

Accepted Answer

While multinational giants may have advantages in terms of resources and networks, smaller companies can also benefit from globalization through advancements in technology, e-commerce, and access to global supply chains. Many small and medium-sized businesses have successfully expanded their markets and customer base through international trade and partnerships.

Question 19

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

Accepted Answer

This statement accurately describes foreign direct investment (FDI).

Question 20

The globalization of markets and production and the resulting growth of world trade,foreign direct investment,and imports all imply that firms are finding it easier to protect themselves from the attack of foreign competitors.

Accepted Answer

The statement is false. The globalization of markets and production and the resulting growth of world trade, foreign direct investment, and imports imply that firms face increased competition from foreign competitors, rather than finding it easier to protect themselves.

Quiz 1: Globalization