Question 1

One of the most serious negative consequences of globalization is that it:
A)leads to the destruction of rainforests.
B)results in global warming.
C)makes nations dependent on each other so that they cannot continue to exist alone.
D)causes nations to be interconnected so that regional economic disruptions spread quickly.

Accepted Answer

Globalization increases the interconnectedness of nations, which means that economic disruptions in one region can quickly spread to others. This can lead to financial crises, recession, and unemployment, as seen in the global financial crisis of 2008.

Question 2

______________________________ make(s)loading of ships easier and facilitates transfer of cargo from ships to others transportation.
A)Standardization of cargo
B)Containerization
C)Improvements in cargo handling equipment
D)Better trained stevedores

Accepted Answer

Containerization involves using standardized containers for cargo, which can be easily loaded and unloaded from ships and transferred to other transportation methods, making the process more efficient and easier.

Question 3

In international trade matters,_____________________ is joint,coordinated action by all countries involved in or affected by a matter to resolve the matter.
A)multilateralism
B)unilateralism
C)socialism
D)capitalism

Accepted Answer

Multilateralism involves collaboration among multiple countries to address issues and come up with solutions that benefit everyone involved. In international trade, multilateralism is typically used to negotiate trade agreements and resolve disputes. Unilateralism, on the other hand, involves one country taking action without consulting or coordinating with other countries, which can lead to tension and conflict. Socialism and capitalism are economic systems and not directly related to international trade matters.

Question 4

Many economists agree that globalization:
A)will continue indefinitely.
B)is good for some nations but bad for many more nations.
C)is good because it raises the standard of living for all global citizens.
D)is good because it allows firms to earn maximum profits.

Accepted Answer

Many economists argue that globalization has led to an overall increase in the standard of living for global citizens through improved access to goods, services, and employment opportunities. While there are certainly winners and losers within individual nations and industries, proponents of globalization argue that the benefits outweigh the costs in the long run.

Question 5

The global business environment is much more ________________ than the domestic business environment.
A)profitable
B)difficult
C)political
D)dynamic

Accepted Answer

The word "dynamic" means constantly changing or evolving. In the context of the question, this means that the global business environment is more complex and fast-paced than the domestic business environment. Option A ("profitable") may not always be true, as profitability depends on various factors and can vary between different countries and industries. Option B ("difficult") and option C ("political") are somewhat related to the concept of a dynamic business environment, but they do not fully capture its essence.

Question 6

The neoclassical theory that seeks to explain comparative advantage in terms of factor abundance is the:
A)Gravity Theory.
B)Imperfect Market Theory.
C)New Trade Theory.
D)Hecksher and Ohlin model.

Accepted Answer

The Hecksher and Ohlin model, also known as the factor abundance theory or factor proportions theory, is a neoclassical theory that seeks to explain comparative advantage in terms of factor abundance. It states that countries will specialize in the production of goods that use their abundant factors of production more intensively, and trade with other countries to obtain goods that use their scarce factors of production more intensively.

Question 7

Key trade issues that remain unresolved include agricultural subsidies in _____________ and market access for _______________________________.
A)developing countries;industrialized countries
B)industrialized countries;developing countries
C)land-rich countries;land-locked countries
D)Western countries;Eastern countries

Accepted Answer

The statement is referring to unequal agricultural subsidies given by industrialized countries to their farmers which negatively impact the market access of developing countries. Therefore, the best choice is B, where agricultural subsidies are a key trade issue in industrialized countries and developing countries face market access issues.

Question 8

Unilateral actions by individual nations in trade matters:
A)is authorized by most international trade agreements.
B)is preferred in resolving trade disputes since the actions can be taken quickly.
C)often mean that international trade organizations have failed to resolve trade conflicts.
D)often result in a cycle of retaliation against each other which interferes with international trade.

Accepted Answer

Unilateral actions by individual nations in trade matters often result in a cycle of retaliation against each other, which interferes with international trade. This can lead to a trade war, which harms economies and markets on both sides. It is generally preferred to resolve trade disputes through international trade organizations, such as the World Trade Organization, to prevent this type of escalation.

Question 9

In the HO model,countries with relatively more capital than other countries will concentrate on ________________________ production.
A)labor-intensive
B)profitable
C)capital-intensive
D)import-replacement

Accepted Answer

According to the HO model, countries with relatively more capital than other countries will concentrate on capital-intensive production. This is because capital-intensive production requires a significant amount of capital investment to produce goods efficiently, which is more affordable for countries with a higher capital stock.

Question 10

Global corporations are often referred to as:
A)multinational corporations.
B)international corporations.
C)global enterprises.
D)international consortiums.

Accepted Answer

The term "multinational corporations" is the most commonly used to refer to companies that operate in multiple countries and have a global reach. While terms like "international corporations" and "global enterprises" may be used interchangeably, "international consortiums" typically refers to a group of companies working together on a particular project or venture, rather than a single global corporation.

Question 11

In terms of international trade,BRIC refers to:
A)the international trade agreement that is recognized as the beginning of the age of globalization.
B)a specialized process for moving cargo by sea.
C)the centralization of communications technology in Middle Eastern countries.
D)the emerging economies of Brazil,Russia,India and China.

Accepted Answer

BRIC refers to the emerging economies of Brazil, Russia, India, and China in terms of international trade. It is an acronym that was first used in 2001 by economist Jim O'Neill to describe these four countries that were seen as having the potential to become major players in the global economy.

Question 12

In David Ricardo's theory of trade,_______________ is assumed to be the primary input for production.
A)labor
B)capital
C)land
D)raw materials

Accepted Answer

David Ricardo's theory of trade, specifically his principle of comparative advantage, assumes labor as the primary input for production. This theory suggests that even if a country does not have an absolute advantage in producing any goods, it can still benefit from trade by specializing in goods that it can produce more efficiently (i.e., at a lower opportunity cost) than other goods, with labor as the key factor in this calculation.

Question 13

Most goods are shipped by sea because:
A)it is easier to ship bulk cargo by sea than by other means.
B)shipping by sea costs significantly less than other means of shipping.
C)shipping by sea is generally safer than by other shipping means.
D)most purchasers prefer that their goods be shipped by sea.

Accepted Answer

The answer of Most goods are shipped by sea because:
A)it...

Question 14

The general objectives of both the WTO and NAFTA include:
A)enabling the movement of goods and services across borders by eliminating tariffs and other restrictions.
B)providing a forum where trade disputes can be resolved and where nations that violate trade laws can be punished.
C)protecting domestic industries in member countries from competition for foreign companies.
D)encouraging the creation of new international companies that will increase international trade.

Accepted Answer

The answer of The general objectives of both the WTO...

Question 15

How did World War II affect the progress of globalization?
A)It was aided since the United States became more involved in European and world affairs.
B)It was adversely affected because so many resources were used in the war effort.
C)It was not affected since trade continued despite the war.
D)The results have not yet been determined since the economic upheaval caused by the war was so great.

Accepted Answer

World War II accelerated globalization as the United States emerged as a global leader, promoting international cooperation and economic integration through institutions like the United Nations and the Bretton Woods system.

Question 16

What was the Silk Road? A)An international trade route that connected East and West Asia as long as 2,000 years ago B)An East Asia trade route that connected Japan and China in the 5^th century CE C)A Mediterranean trade route that connected ancient civilizations D)One of the routes that lead to the expansion of the Roman Empire

Accepted Answer

The Silk Road was an international trade route that connected East and West Asia as long as 2,000 years ago. It was named after the valuable silk that was traded along the route. The Silk Road also facilitated the exchange of goods, technologies, and ideas between different cultures and civilizations.

Question 17

Risks that are unique to international business include:
A)economic risks and business risks.
B)currency risks and country risks.
C)economic risks and political risks.
D)economic risks and currency risks.

Accepted Answer

International businesses face currency risks due to fluctuations in exchange rates and may also face country risks such as political instability, legal systems, and cultural issues that may affect business operations. Economic and business risks may exist in both domestic and international settings, while political risks are a subset of country risks.

Question 18

An example of the widespread belief that political freedom is necessary for economic freedom and economic growth can be found in: A)the emergence of Japan as an international economic force in the latter part of the 20^th century. B)the widespread availability of technical education in India. C)the rise of Brazil as an economic powerhouse in the Southern Hemisphere. D)the demise of the Soviet Union and the rise of an entrepreneurial class in Russia.

Accepted Answer

The demise of the Soviet Union and the rise of an entrepreneurial class in Russia is an example of the widespread belief that political freedom is necessary for economic freedom and growth. The Soviet Union was a socialist state with a command economy and limited political freedom. The fall of the Soviet Union and the transition to a market economy allowed for greater political and economic freedom, leading to the emergence of new businesses and entrepreneurs. This example shows that political freedom can lead to economic growth and development.

Question 19

Countries generally believe that international trade has what affect on them?
A)It encourages the creation of new businesses which pay more taxes to the countries where they are created.
B)It improves the welfare of their citizens by creating jobs and allowing more variety in goods available.
C)It benefits developed countries the most because they have the most money to spend on international trade.
D)It benefits developing countries the most because they have the most to gain from international trade.

Accepted Answer

International trade generally benefits countries by creating more job opportunities, increasing the variety of goods available to consumers, and aiding economic growth. This is particularly beneficial to developing countries, as it provides them with access to larger markets and can lead to greater investment opportunities. While developed countries do benefit from international trade, it is not solely in their favor, and the benefits are widely spread.

Question 20

The movement of goods across national borders is the definition of ________________________.
A)importation
B)exportation
C)globalization
D)international trade

Accepted Answer

The movement of goods across national borders is a basic definition of international trade. A refers to the bringing of goods into a country, while B refers to the sending of goods out of a country. C refers to the increasing interconnectedness of the world's economies and societies, but it is not a direct definition of the movement of goods across borders.

Quiz 1: Introduction

One of the most serious negative consequences of globalization is that it:

______________________________ make(s) loading of ships easier and facilitates transfer of cargo from ships to others transportation.

In international trade matters,_____________________ is joint,coordinated action by all countries involved in or affected by a matter to resolve the matter.

Many economists agree that globalization:

The global business environment is much more ________________ than the domestic business environment.

The neoclassical theory that seeks to explain comparative advantage in terms of factor abundance is the:

Key trade issues that remain unresolved include agricultural subsidies in _ and market access for ___________________.

Unilateral actions by individual nations in trade matters:

In the HO model,countries with relatively more capital than other countries will concentrate on ________________________ production.

Global corporations are often referred to as:

In terms of international trade,BRIC refers to:

In David Ricardo's theory of trade,_______________ is assumed to be the primary input for production.

Most goods are shipped by sea because:

The general objectives of both the WTO and NAFTA include:

How did World War II affect the progress of globalization?

What was the Silk Road?

Risks that are unique to international business include:

An example of the widespread belief that political freedom is necessary for economic freedom and economic growth can be found in:

Countries generally believe that international trade has what affect on them?

The movement of goods across national borders is the definition of ________________________.