Combo with "Global Test: Ch1" and 1 other

Political, Economic, Legal

A Political Economy refers to... (3 things)

Which of the following is an example of globalization of production?

A U.S. company that builds a computer hardware manufacturing facility in India

Islamic Languages

A high context (not mostly spoken) languages

English

A low context (mostly spoken) language

Economic Bloc Creation (Scenario) Country A and Country B are considering joining together into an economic bloc. Country A and Country B are both low-wage countries. Country A and Country B are separated from each other by Country C, which already belongs to an economic bloc. Representatives from Country A and Country B are meeting to discuss the possibilities of an economic bloc, and interpreters for each representative are assisting with the meeting procedures. 54) Which of the following is most important to consider when making the decision to create an economic bloc comprised of Country A and Country B? A) Are the economic interests and goals of both countries compatible? B) What would be the impact of an economic bloc on small firms in Country B? C) How successful has Country C been in an economic bloc? D) Can Country A and Country B agree on a central banking location?

A) Are the economic interests and goals of both countries compatible?

33) Which of the following is responsible for determining the admission of new member countries to the EU? A) Council of the European Union B) European Parliament C) European Court of Justice D) European Commission

A) Council of the European Union

19) Which of the following organizations exemplifies regional integration? A) EU B) WTO C) GATT D) MNE Answer: A

A) EU

28) Which of the following is an example of a common market? A) EU B) ASEAN C) NAFTA D) EFTA

A) EU

Sew-Right (Scenario) The French sewing machine company, Sew-Right, has manufacturing facilities twenty miles outside of Paris. Since the formation of the EU, Sew-Right managers have been considering internationalizing the Sew-Right company. Sew-Right managers have also discussed the possibility of opening additional manufacturing facilities in Germany and Mexico. Sew-Right managers and executives are discussing the various options at a conference, and they hope to reach a decision soon. 57) Which of the following supports Sew-Right internationalizing into Germany instead of Mexico? A) Germany is a member of the same economic bloc. B) Language barriers impose difficulties in Mexico. C) Germany would be a good launching point for Asia. D) A German facility would be modern and economical.

A) Germany is a member of the same economic bloc.

25) Which of the following is the way in which common markets differ from customs unions? A) Products, services, and factors of production are allowed to move freely between member countries. B) Tariffs and non-tariff trade barriers are eliminated when trade and business investments occur between member nations. C) Member nations share a regulated system of tariff rates and equally distribute tax revenue received from non-member countries. D) The monetary, tax, and fiscal policies of member nations are overseen by a central authority.

A) Products, services, and factors of production are allowed to move freely between member countries.

21) Which of the following helps foster economic integration on a global scale? A) WTO B) EU C) SME D) PPP

A) WTO

MERCOSUR (Scenario) The Bravo Luggage Company is a Latin American firm based in Buenos Aires, Argentina. Bravo has seen a sharp increase in orders over the last few months and needs to increase the amount of material purchased. Currently, the materials used to manufacture Bravo luggage come from suppliers in Paraguay. Bravo managers have been approached by suppliers from Mexico and China who are both offering very competitive prices on materials. 53) Which of the following should be considered when making the decision to use a MERCOSUR supplier or a non-MERCOSUR supplier? A) Will the additional tariffs offset any savings for Bravo? B) Do other MERCOSUR nations use outside suppliers? C) What percentage of tariffs will Argentina receive? D) How will Bravo managers handle the free trade area?

A) Will the additional tariffs offset any savings for Bravo?

Sew-Right (Scenario) The French sewing machine company, Sew-Right, has manufacturing facilities twenty miles outside of Paris. Since the formation of the EU, Sew-Right managers have been considering internationalizing the Sew-Right company. Sew-Right managers have also discussed the possibility of opening additional manufacturing facilities in Germany and Mexico. Sew-Right managers and executives are discussing the various options at a conference, and they hope to reach a decision soon. 60) Which of the following would be the best option for Sew-Right if managers determine the company should be in Mexico but are hesitant about entering an unfamiliar bloc? A) establishing a joint venture with a Mexican company B) entering into a collaborative venture with an EU-based firm C) opening a maquiladora facility on the Mexican border D) exporting sewing machines into the United States

A) establishing a joint venture with a Mexican company

26) NAFTA is an example of which of the following levels of regional integration? A) free trade area B) political union C) economic union D) common market

A) free trade area

36) Countries such as Poland and Hungary have most likely attracted business investment because of ________. A) low wages B) uncomplicated business regulations C) inexpensive land D) few restrictions

A) low wages

46) Canada restricts U.S. film and television producers from investing in the Canadian film market in order to ________. A) retain Canadian TV and movie interests B) safeguard the Canadian economy C) ensure national film autonomy D) guard the integrity of Canadian actors

A) retain Canadian TV and movie interests

44) Economic blocs are more likely to succeed if the member countries have which of the following? A) similar economies B) wage rate differences C) distinct cultures D) emphasis on national autonomy

A) similar economies

40) All of the following most likely explain the lack of success by economic blocs in Africa except ________. A) tariff restrictions B) political and civil unrest C) underdeveloped economic and transportation systems D) war in the region

A) tariff restrictions

45) Which of the following terms is used to refer to a nation in an economic bloc ceasing to trade with a non-member nation? A) trade diversion B) trade creation C) trade autonomy D) free trade

A) trade diversion

Class System

Achievement based social strata system (high social mobility)

Friedman Doctrine

As long as it's legal, it's okay (Doctrine)

Confucian Dynamism

Attitude toward long term thinking ("customer for life")

31) Switzerland is a member of which of the following economic blocs? A) EU B) EFTA C) CAN D) APEC

B) EFTA

49) How does the creation of an economic bloc affect national boundaries? A) It alters boundaries geographically. B) It decreases the boundaries' importance. C) It dissolves national boundaries. D) It defines more strict boundaries.

B) It decreases the boundaries' importance.

43) The success of which of the following blocs was most dependent on a shared language and culture? A) NAFTA B) MERCOSUR C) EU D) EFTA

B) MERCOSUR

37) Which of the following has occurred as a result of NAFTA? A) Workers at maquiladoras have instigated union strikes. B) Working conditions in member nations have improved. C) Canadian exports to Europe and Asia have doubled. D) Foreign investors have been replaced by U.S. firms.

B) Working conditions in member nations have improved.

35) What is the most likely reason that some Western European countries are concerned about the addition of Eastern European countries to the EU? A) fear of draining EU funds and outgrowing the current infrastructure B) concern about losing employment opportunities and foreign investment C) lack of public roads and transportation systems needed for manufacturing D) inability to provide necessary training and education to poor nations

B) concern about losing employment opportunities and foreign investment

23) Members of ________ agree to the tariffs and non-tariff barriers that are applied to imports from nonmember countries. A) free trade areas B) customs unions C) economic blocs D) regional alliances

B) customs unions

17) A formal arrangement between two or more countries to reduce or eliminate tariffs is known as a(n) ________. A) quota arrangement B) free trade agreement C) economic union D) economic bloc

B) free trade agreement

50) Many European firms gain access to the NAFTA bloc by ________. A) exporting their manufactured goods into Canada B) investing in the creation of Mexican factories C) advertising and marketing through U.S. media D) establishing political connections through U.S. firms

B) investing in the creation of Mexican factories

16) The intended purpose of regional integration is to ________. A) increase the mobility of workers among the member countries in a bloc B) reduce trade and investment barriers within the bloc C) streamline customs agency regulations within the bloc D) encourage foreign investment into the bloc

B) reduce trade and investment barriers within the bloc

Economic Bloc Creation (Scenario) Country A and Country B are considering joining together into an economic bloc. Country A and Country B are both low-wage countries. Country A and Country B are separated from each other by Country C, which already belongs to an economic bloc. Representatives from Country A and Country B are meeting to discuss the possibilities of an economic bloc, and interpreters for each representative are assisting with the meeting procedures. 55) Which of the following most supports Country A and Country B becoming an economic bloc? A) geographic proximity to each other B) similarities in economic situations C) similarities in tariff rules and rates D) linguistic and cultural similarities

B) similarities in economic situations

41) All of the following characterize benefits of regional integration to firms except ________. A) free-trade access within an economic bloc B) widened access to other economic blocs C) increased efficiency in production and marketing D) expanded marketplace for goods and services

B) widened access to other economic blocs

Straw Man Argument

BS/ Easy way out is this Argument

Caste System

Birth based social strata system (low social mobility)

32) Which of the following has the longest experience with regional integration? A) the Americas B) Asia C) Europe D) the Middle East

C) Europe

27) Which of the following is an example of a customs union? A) NAFTA B) ASEAN C) MERCOSUR D) EFTA

C) MERCOSUR

24) All of the following nations are members of MERCOSUR except ________. A) Paraguay B) Uruguay C) Mexico D) Argentina

C) Mexico

MERCOSUR (Scenario) The Bravo Luggage Company is a Latin American firm based in Buenos Aires, Argentina. Bravo has seen a sharp increase in orders over the last few months and needs to increase the amount of material purchased. Currently, the materials used to manufacture Bravo luggage come from suppliers in Paraguay. Bravo managers have been approached by suppliers from Mexico and China who are both offering very competitive prices on materials. 51) Which of the following questions would be most important for Bravo managers to evaluate when determining which supplier to use? A) How will using non-South American material affect the Bravo brand name? B) What other MERCOSUR nations sell leather and fabric supplies for luggage? C) What will be the cost of materials shipped from Paraguay, Mexico, and China? D) Are other countries planning to join MERCOSUR in the near future?

C) What will be the cost of materials shipped from Paraguay, Mexico, and China?

34) Which of the following industries has experienced rapid expansion in Eastern Europe? A) pharmaceutical B) telecommunications C) automobile D) computer

C) automobile

42) One of the reasons for the establishment of the European Community was to ________. A) broaden the power of communism within East Germany B) create fair standards of trade and international business C) combine forces against the powerful former Soviet Union D) establish judicial procedures to handle trade violators

C) combine forces against the powerful former Soviet Union

18) Which of the following terms is used to refer to two or more geographically connected nations in pursuit of freer trade relations? A) trade organization B) economic union C) economic bloc D) free trade agreement

C) economic bloc

38) Associate members of MERCOSUR enjoy which of the following benefits? A) legal waivers B) low-cost labor C) preferential trade D) tariff exemption

C) preferential trade

Sew-Right (Scenario) The French sewing machine company, Sew-Right, has manufacturing facilities twenty miles outside of Paris. Since the formation of the EU, Sew-Right managers have been considering internationalizing the Sew-Right company. Sew-Right managers have also discussed the possibility of opening additional manufacturing facilities in Germany and Mexico. Sew-Right managers and executives are discussing the various options at a conference, and they hope to reach a decision soon. 58) If Sew-Right decides to open a facility in Germany, which of the following will most likely occur first? A) formation of new board of directors B) modernization of French facility C) rationalization of Sew-Right operations D) consolidation of Sew-Right suppliers

C) rationalization of Sew-Right operations

48) Firms often internationalize within an economic bloc for all of the following reasons except ________. A) gain international experience B) generate new sales and profits C) reduce exposure to competition D) increase source of supplies

C) reduce exposure to competition

30) Economic unions are characterized by all of the following except ________. A) reduced border controls B) consistent labeling standards C) shared government institutions D) standardized merger laws

C) shared government institutions

MERCOSUR (Scenario) The Bravo Luggage Company is a Latin American firm based in Buenos Aires, Argentina. Bravo has seen a sharp increase in orders over the last few months and needs to increase the amount of material purchased. Currently, the materials used to manufacture Bravo luggage come from suppliers in Paraguay. Bravo managers have been approached by suppliers from Mexico and China who are both offering very competitive prices on materials. 52) Which of the following best supports using a supplier from Paraguay over a supplier from Mexico or China? A) MERCOSUR members agree to use exporters from other MERCOSUR nations. B) The Mexican supplier is in closer proximity to Bravo than the Chinese supplier. C) Mexican and Chinese suppliers would pay the same tariff to export to Argentina. D) Bravo could avoid tariffs because Paraguay is a member of MERCOSUR.

D) Bravo could avoid tariffs because Paraguay is a member of MERCOSUR.

39) Which of the following economic blocs will most likely merge with MERCOSUR? A) CER B) NAFTA C) CARICOM D) CAN

D) CAN

22) Which of the following is favored by the World Trade Organization? A) European Union B) unilateral trading system C) regional economic integration bloc D) global trading system

D) global trading system

Sew-Right (Scenario) The French sewing machine company, Sew-Right, has manufacturing facilities twenty miles outside of Paris. Since the formation of the EU, Sew-Right managers have been considering internationalizing the Sew-Right company. Sew-Right managers have also discussed the possibility of opening additional manufacturing facilities in Germany and Mexico. Sew-Right managers and executives are discussing the various options at a conference, and they hope to reach a decision soon. 59) A Sew-Right facility in Mexico would most likely lead to which of the following? A) reduced labor supply difficulties B) streamlined distribution facilities C) increased relations with EU countries D) improved access to NAFTA members

D) improved access to NAFTA members

29) At least some EU countries have established all of the following levels of regional integration except ________. A) customs union B) economic union C) monetary union D) political union

D) political union

20) The member nations of NAFTA include which of the following? A) the United Kingdom, France, and Italy B) Canada, France, Britain, and Germany C) the United States, Mexico, and Brazil D) the United States, Canada, and Mexico

D) the United States, Canada, and Mexico

Economic Bloc Creation (Scenario) Country A and Country B are considering joining together into an economic bloc. Country A and Country B are both low-wage countries. Country A and Country B are separated from each other by Country C, which already belongs to an economic bloc. Representatives from Country A and Country B are meeting to discuss the possibilities of an economic bloc, and interpreters for each representative are assisting with the meeting procedures. 56) Which of the following would most likely be the greatest obstacle to regional integration between Country A and Country B? A) a high supply of skilled laborers in Country A and Country B B) the greater number of national institutions in Country B than Country A C) a lack of sufficient educational systems in both Country A and Country B D) the unwillingness of Country A to surrender autonomy to a central bloc authority

D) the unwillingness of Country A to surrender autonomy to a central bloc authority

47) Regional integration often forces firms to restructure which may lead to ________. A) trade diversion B) trade creation C) reduced global trade D) worker layoffs

D) worker layoffs

Civil Law

Detailed sets of laws organized into codes (many countries)

Market Economy

Economy determined by Supply and Demand, govt. generally hands off

Mercantilism

Export MORE than you import

________ are all goods and services sold abroad and sent out of a country.

Exports

Foreign Direct Investment

FDI

General Agreement on Tariffs and Trade

GATT

Markets and Productions

Globalization globalizes what two things?

Utilitarian

Go with the flow (majority)

Mixed Economy

Govt tends to take over troubled firms (BAIL OUTS)

Power Distance

How society deals with people of different capabilities

International Monetary Fund

IMF (Maintains order in international monies)

Tariff, Subsidies, Import Quota, Voluntary Export Restraint, Local Content Requirements, Administrative Policies, Anti-Dumping Policies

List the seven trade policies (you'll'a never get 'athis!)

Multinational Enterprise

MNE

Mores

Mannerisms that are very important to society

Leontief Paradox

Paradox that says the country with the highest capital per worker has a lower capital per labor ratio in exports than imports

Kantian Ethics

People are not machines and need respect (Ethics)

Command Economy

Price, Quantity, of everything is determined by govt

Buddhism, Hinduism, Islam, Confucianism, Christianity

Rate 5 on a scale from least to most beneficial to free market (Max Weber 1904)

Theocratic Law

Religious Teachings (NOT India)

Theocracy

Religious rule of a few (Vatican, Iran)

Folkway

Routine conventions of everyday life (Ex: manners)

Tribal

Rule by a few (Africa)

Facism

Strict rule (Italy, Germany 1940s)

Ad Valorem

Tariff that charges based on a percentage of imported goods

Specific Tariff

Tariff that institutes a fixd charge for each good imported

Common Law

Tradition/Precedent based (former GB colonies)

Olive oil prepared in a small Italian oil press factory and sold by large supermarkets in the United States is an example of a ________.

U.S. import

World Bank

WB (drives economic development)

World Trade Organization

WTO (polices the world's trading, has 'teeth,' unlike the UN)

Adam Smith, Absolute Advantage

What Economist created the term for when a country is more efficient at production of something than another county?

Ricardo, Comparative Advantage

What Economist created the term for when trade can benefit all parties (even non efficient ones)

Samuelson

What Economist thinks that free trade is not beneficial enough for the right country?

Krugman

What economist discovered the concept of economies of scale?

Individualism

What idea is Aristotle known for?

Socialism

What idea is Marx known for?

Collectivism

What idea is Plato known for?

Hechsher and Ohlin

What two economists argued that countries will make use of their natural endowments?

1977 Illegal to bribe

What year was the Foreign Corrupt Practices Act and what did it do?

Uncertainty Avoidance

Whether society doesn't like or is okay with RISK

As a result of globalization, Argonia finds that its national borders are becoming less relevant. This indicates that Argonia is undergoing ________.

denationalization

A major flaw of the original General Agreement on Tariffs and Trade (GATT) was that it lacked the power to ________.

enforce world trade rules

Goods and services purchased abroad and brought into a country are called ________.

imports

Any commercial transaction that crosses the borders of two or more nations is known as ___

international business

Globalization is characterized by ________.

national boundaries becoming less relevant

The purpose of the General Agreement on Tariffs and Trade (GATT) was to ________.

promote free trade

Most companies today operate in an environment of increased transparency and scrutiny regarding their business activities. This is due to ________.

the rise of the social media