Question 1

Differences between countries require that an international business vary its practices country by country.

Accepted Answer

Every country has its own unique culture, language, customs, laws, and business practices, so international businesses must adapt their practices and strategies to each country's unique requirements and expectations. Failure to do so may result in cultural misunderstandings, legal issues, and loss of market share.

Question 2

Globalization critics argue that the decline in unskilled wage rates is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers.

Accepted Answer

Globalization critics often argue that the migration of low-wage manufacturing jobs to offshore destinations has led to a decline in demand for unskilled workers, ultimately resulting in lower wage rates for these workers. This is a widely debated issue in the field of economics.

Question 3

Recent evidence indicates that the solution to the problem of stagnant incomes among the unskilled is to be found in increasing government regulation of markets.

Accepted Answer

Recent evidence suggests that increasing government regulation of markets may not be the solution to the problem of stagnant incomes among the unskilled. In fact, some argue that excessive regulation can stifle economic growth and innovation, further exacerbating income inequality. Other solutions proposed include education and training programs, increasing the minimum wage, and implementing progressive tax policies.

Question 4

Non-U.S. firms increasingly began to invest across national borders because they wanted to disperse production activities to optimal locations and to build a direct presence in major foreign markets.

Accepted Answer

This statement is true. Non-U.S. firms started investing across borders to achieve various benefits, such as accessing new markets, finding cheaper or better production locations, or acquiring strategic assets, among others. This trend has been accelerated by globalization, liberalization, technological advancement, and other factors, making cross-border investment a common strategy for international business.

Question 5

Efficiency gains associated with containerization have caused transportation costs to fall dramatically.

Accepted Answer

Containerization has revolutionized the transportation industry by increasing efficiency and reducing costs. The use of standardized containers has led to easier and faster loading and unloading of cargo, reduced handling damage, and lower labor costs. As a result, transportation costs have significantly decreased, benefiting both manufacturers and consumers.

Question 6

According to critics of globalization, today's interdependent global economy limits a nation's national sovereignty.

Accepted Answer

Critics argue that globalization results in a loss of control over domestic economic policies and that countries become subject to the decisions of global financial institutions and multinational corporations. This can limit a nation's national sovereignty.

Question 7

The Internet has developed into the information backbone of the global economy.

Accepted Answer

The Internet has become an essential tool for businesses, consumers, and governments around the world to interact, communicate, and exchange information. Its impact on the global economy has been significant, and it continues to shape the way we do business and access information.

Question 8

The globalization of the world economy has resulted in a relative increase in the dominance of U.S. firms in the global marketplace.

Accepted Answer

By 2017, some 27 percent, or 540 firms, of the Top 2000 global firms are now U.S. multinationals, a drop of 236 firms in only about a decade and a half. Japanese and U.K. firms also saw declines in inclusion among the Top 2000 firms in the world. The globalization of the world economy has resulted in a relative decline in the dominance of U.S. firms in the global marketplace

Question 9

Evidence suggests that technological change has had a bigger impact than globalization on the declining share of national income enjoyed by labor.

Accepted Answer

Studies and analyses have shown that the impact of technological change and automation has been a major contributing factor to the declining share of national income going to labor. While globalization has also played a role, its impact is comparatively smaller.

Question 10

Globalization of markets has resulted in greater differentiation of consumer tastes and preferences.

Accepted Answer

Globalization of markets has generally led to a convergence of consumer tastes and preferences, as global brands and products become more widely available and popular across different regions.

Question 11

In the early 1960s, the United States was by far the world's dominant industrial power. However by 2009, it lost its dominant position and now, is no longer the world's largest industrial power.

Accepted Answer

As of 2009 and beyond, the United States remained one of the world's largest industrial powers, although it faced increased competition from countries like China, which has become a major industrial power.

Question 12

According to supporters of free trade, as countries get richer they commit greater violation of environmental and labor regulations.

Accepted Answer

Supporters of free trade argue that increased wealth leads to a greater focus on environmental and social welfare, and therefore, countries are more likely to strengthen their regulations rather than violate them.

Question 13

A current trend in international business is the decline of medium-sized and small multinationals, known as mini-multinationals.

Accepted Answer

There is no decline in medium-sized and small multinationals. In fact, mini-multinationals are on the rise due to technological advancements that have made it easier for smaller companies to operate globally.

Question 14

Critics of globalization suggest that over the last century, the gap between the rich and poor nations of the world has shrunken.

Accepted Answer

Critics of globalization argue that it has widened the gap between rich and poor nations, as wealth and resources are often concentrated in developed countries, while developing nations may not benefit equally.

Question 15

Supporters of debt relief argue that new democratic governments in poor nations should not be forced to honor debts incurred by corrupt and dictatorial predecessors.

Accepted Answer

Supporters of debt relief argue that it is unjust to burden new democratic governments with the debts incurred by previous corrupt and dictatorial regimes. They argue that debt relief can provide a fresh start for these new governments to prioritize social and economic development for their citizens.

Question 16

Doing business in Russia involves risks because the country has shown signs of shifting back toward greater state involvement in economic activity and authoritarian government.

Accepted Answer

This statement is true as Russia has seen an increase in state involvement in economic activity and government control in recent years under the leadership of President Vladimir Putin. This can create risks and challenges for businesses operating in the country.

Question 17

A firm does not have to become a multinational enterprise to engage in international business.

Accepted Answer

International business can refer to any type of business activity that involves cross-border transactions, regardless of the size or scope of the enterprise. Therefore, a firm of any size can engage in international business without necessarily becoming a multinational enterprise.

Question 18

Current trends indicate the world is moving toward an economic system that is more favorable for international business.

Accepted Answer

Globalization and advancements in technology have made it easier for businesses to operate internationally, and many governments have been implementing policies that promote foreign investment and trade. This has resulted in an increase in cross-border transactions and the development of a more interconnected global economy.

Question 19

A multinational enterprise (MNE) is any business that exports or imports products from other countries.

Accepted Answer

A multinational enterprise (MNE) is a business that operates in multiple countries, not just one that exports or imports products.

Question 20

Globalization reduces the risks of global financial contagion.

Accepted Answer

Globalization has increased the interconnectedness and interdependence of financial markets, leading to a greater risk of financial contagion. In a globalized world, a crisis in one country or region can quickly spread to other countries and regions, potentially causing a global financial crisis.

Quiz 1: Globalization