Exam 1

According to the critics of globalization, which of the following are results of falling trade barriers? (Check all that apply.) - A depression of wages in developed nations - The destruction of manufacturing jobs in advanced economies - Greater opportunities for manufacturing in developed countries - A reduction in the pool of global labor

- A depression of wages in developed nations - The destruction of manufacturing jobs in advanced economies

Which four countries have high gross national income (GNI) per capita based on 2019 data? - China - Japan - Switzerland - Australia - Sweden - India

- Japan - Switzerland - Australia - Sweden

A businesses' property consists of which three things? (Check all that apply.) - Land - Buildings - Contracts - Equipment - Individuals

- Land - Buildings - Equipment

Which of the following are examples of private action and a violation of property rights? (Check all that apply.) - Theft - Excess taxation - Required permits - Blackmail

- Theft - Blackmail

Which environmental concern has been found to rise steadily with higher-income levels?

Carbon dioxide emissions

______ refers to a political system that values the needs of society over that of an individual.

Collectivism

Until recently, what was the most common form of totalitarianism in the world?

Communist

______ refers to a political system in which the citizens exercise power directly or elect representatives to form a governing body. Multiple choice question.

Democracy

The members of the World Intellectual Property Organization have signed international treaties designed to protect intellectual property, including the oldest such treaty known as the ______, which dates to 1883.

Paris Convention for the Protection of Industrial Property

Millie, a research associate at an information technology firm, develops a program that allows more than six parties to interface at the same time. In order to prevent the competition from duplicating her invention, the company should apply for a

Patent

In the last half of the twentieth century, Britain's Conservative Party sold state-owned enterprises to individual investors in order to create a free market economy. What process was Britain using to create this economy?

Privatization

______ refers to the process of selling state-owned enterprises to private investors.

Privatization

______ set certain safety standards to which a manufactured good must meet.

Product safety laws

Trade agreements between nations are another way in which trade barriers have been reduced. Which statement accurately depicts the current state of trade agreements in the world?

Since the 1990s, trade agreements have increased dramatically.

By the end of the 1970s in Great Britain, state-owned companies monopolized the telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of which political system in place at the time?

Social democracy

During the 1960s, which country was the predominant world power in terms of foreign direct investment?

The United States

Which organization ensures that nation states comply to the rules associated with trade treaties signed by member states?

The World Trade Organization

According to the critics of globalization, which of the following are results of falling trade barriers? (Check all that apply.) Multiple select question. - A reduction in the pool of global labor - Greater opportunities for manufacturing in developed countries - A depression of wages in developed nations - The destruction of manufacturing jobs in advanced economies

The destruction of manufacturing jobs in advanced economies

What is one of the tenets of individualism?

The welfare of society is best served by allowing individuals to follow their own economic self-interest.

Which characteristic is typical within a totalitarian country?

There is no questioning of the ruler's decisions.

Why would a company engage in the globalization of production?

To lower their overall cost structure

During the 1920s and 1930s, many of the world's nation-states put formidable trade barriers in place. What was the main reason behind these actions?

To protect domestic industries from foreign competition

How did nation-states react to the economic environment of the 1920s and 1930s?

Trade barriers were increased.

What can be an impediment to the globalization of production?

Transportation costs

______ totalitarianism occurs when a political party that represents the interests of a particular tribe monopolizes power.

Tribal

Supporters of globalization argue that bodies such as the World Trade Organization and the United Nations exist to serve the collective interests of member states, not to subvert those interests. T or F

True

True or false: Command economies do not make innovation a priority and, therefore, tend to stagnate.

True

True or false: Russia, as it is today, is an example of a pseudo-democracy.

True

Why would a company engage in the globalization of production? a. To foster government intervention b. To lower their overall cost structure c. To increase the barriers to cross-border trade d. To move closer to their competition

b. To lower their overall cost structure

According to the supporters of globalization, falling barriers to international investment a. will significantly raise the prices for goods and services. b. help to create employment opportunities in countries that participate in the global trading system. c. will lower the incomes of consumers. d. restrict the formation of an integrated and interdependent global economy.

b. help to create employment opportunities in countries that participate in the global trading system.

In a country governed by a totalitarian system, you would find that

basic civil liberties are denied to citizens.

Which of the following factors would make a country desirable to do business with? (Check all that apply.) a. A planned economy b. A totalitarian political system c. Democratic political institutions d. A market-based economy

c. Democratic political institutions d. A market-based economy

Which statement best describes the International Monetary Fund (IMF)? a. The IMF is less controversial than the World Bank. b. Unlike the World Trade Organization, the IMF does not usurp the sovereignty of nation states. c. The IMF is often seen as the lender of last resort to nation states whose economies are in turmoil. d. In return for loans, the IMF does not mandate nation states to adopt specific economic policies.

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

Which of the following are ways in which property rights can be violated? (Check all that apply.) a. Through religious intent b. Through foreign direct investment c. Through private action d. Through public action

c. Through private action d. Through public action

Which of these companies is facing an impediment to the globalization of production? a. Jameson Grills buys component parts from a European company that will only ship via aircraft. b. Roll-Fast Skate Inc. plans to market its product globally but source parts domestically. c. U.S. law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an overseas company. d. Europe recently dropped its trade barriers and now Kleen-Source Corp. can take advantage of a low-cost supplier.

c. U.S. law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an overseas company.

Social democrats advocate for _____. a. the idea of establishing a totalitarian dictatorship b. private-ownership of the basic means of production, distribution, and exchange c. achieving socialism through non-violent means d. achieving socialism by emphasizing individual interests over societal goals

c. achieving socialism through non-violent means

In a market economy, the government's role is to a. encourage a single firm to monopolize the market. b. mobilize economic resources for the public good by prohibiting private ownership. c. encourage free and fair competition and minimize restrictive business practices. d. allow private producers to control and restrict the supply of products.

c. encourage free and fair competition and minimize restrictive business practices.

Karl Marx would agree that _____.

capitalists take the value created by workers for their own use

Advances in _____ technology make it possible for companies to outsource customer service operations to another country. Multiple choice question.

communication

A ______ refers to a legal right that enables the creator of an original work the right to publish and distribute their work as they see fit.

copyright

Why are consumer products less likely than industrial products to be a source for the global marketplace? a. More expensive to promote industrial products b. Legal regulations prevent distribution of consumer goods c. Fewer consumers use industrial products d. Differences in consumer tastes

d. Differences in consumer tastes

How have tariff rates for manufactured goods been affected by the global efforts of GATT? a. Tariff rates tripled when GATT was implemented. b. Tariff rates were not affected by the GATT policies. c. Tariff rates have been suspended by most democratic nations. d. Tariff rates fell significantly since 1950.

d. Tariff rates fell significantly since 1950.

The globalization of markets and production implies that a. there is a decrease in interdependency between nations. b. there is a decrease in cross-border trade. c. firms are limiting their production activities to their local regions. d. domestic firms are facing intense competition from foreign firms.

d. domestic firms are facing intense competition from foreign firms.

While a pure command economy is thought to be based on the collective good of a society, it often results in a. dynamism that is evident in every business sector. b. state-owned enterprises that demonstrate innovation to serve customers better. c. a lack of nationalization of the private sector. d. state-owned enterprises that have fewer reasons to control costs

d. state-owned enterprises that have fewer reasons to control costs.

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

decline

Creating and managing a globally dispersed production system is made easier by the ______ in costs of information processing and communication.

decrease

China and Vietnam have experienced greater individual freedom in the economic sphere; however, this is not a reflection of the presence of a(n) _____.

democracy

Political systems that emphasize individualism tend to promote _____.

democracy

One reason why a global market does not fully exist is _____.

differences in legal regulations among national markets

Critics of globalization protest in order to

diminish the impact of the culture of multinational enterprises on the world.

Nations adopting the pure form of democracy would

directly involve citizens in the decision making of the country.

The opponents of globalization argue that falling barriers to international trade will

eliminate manufacturing jobs in wealthy economies.

Influential economists, politicians, and business leaders who favor globalization argue that

falling barriers to international trade drive the economy toward greater prosperity.

Renata is traveling across Europe and is surprised to find Starbucks, McDonald's, and Coca-Cola in nearly every city she visits. This shows a convergence of consumer tastes, which creates a _____.

globalization of markets

The globalization of markets is facilitated by the

improvement in transportation technology.

Theocratic totalitarianism is described as a political system

in which rulers govern based on religious rules and principles.

The division between rich and poor nations has (increased or decreased) with the advent of globalization

increased

Global markets for industrial goods such as oil and wheat are more typical than those for consumer products because _____.

industrial goods serve universal needs

Foreign direct investment occurs when a(n) _____.

investment is made by a company based in one country into a company or entity based in another country

Along the continuum between democracy and totalitarianism, it can be said that

it is possible to have a democratic state in which some degree of collectivism exists.

Those who support globalization argue that increasing globalization will

lead to reduced prices for goods and services.

The political economy of a country refers to the interaction of the political, economic, and _____ systems of a country.

legal

The Uruguay Round negotiations resulted in

lowering the trade barriers between various national markets.

In a pure ______ economy, all productive activities are owned privately—not by the state.

market

The _____ often back(s) right-wing totalitarianism governments.

military

In a ______ economy, both private enterprise and state ownership co-exist.

mixed

As international trade expands, the economies of the world's nation-states are becoming ______.

more intertwined

In a nation where right-wing totalitarianism is present, you would find that

political freedom is restricted, frequently on the grounds that it would lead to the rise of communism.

Levying excessive taxes or requiring expensive permits from property holders are both examples of ______ action.

public

The change in the U.S. economic position since 1960 has been labeled a(n) _____ decline because it reflected the faster growing economy of several other economies.

relative

Companies rely on containerization to _____.

simplify the transfer of shipments from one form of transport to another

When describing intellectual property rights, it can be said that they are

subjected to various forms of protection from country to country.

The production of goods in a pure market economy is determined by

supply and demand.

Evidence suggests that _____ has impacted the declining share of national income enjoyed by labor more so than globalization has.

technological change

The decline of the United States standing in industrial power since the 1960s is considered a relative decline because it is a reflection of

the faster economic growth of other economies.

A pseudo-democracy is the term given to a nation in which Multiple choice question.

the government is in control of the machinery of the state and uses this power to deny political and civil liberties.

Even though there are many state-owned businesses in China, many Western businesses feel that they should still invest in the country because ______.

the nation is moving toward a market-based system

In a command economy, businesses are owned by _____.

the state

Under Vladimir Putin, the government of Russia is becoming increasingly _____.

totalitarian

Select the four facts that described the demographics of the global economy up until the 1960s. - U.S. retraction from all global agreements - U.S. dominance in the world economy and world trade - The dominance of large, multinational U.S. firms in the international business scene - Roughly half of the globe was off-limits to Western international business - U.S. dominance in world foreign direct investment - U.S. dominance in underdeveloped, third-world countries

- U.S. dominance in the world economy and world trade - The dominance of large, multinational U.S. firms in the international business scene - Roughly half of the globe was off-limits to Western international business - U.S. dominance in world foreign direct investment

What should Stephen, the CEO of an athletic clothing company, obtain to prevent competitors from copying the company logo?

A trademark

True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the full value of their labor.

False

What is one impact of globalization?

Greater uniformity replaces diversity.

______ refers to a philosophy that promotes the free exercise of one's goals and desires in economic and political pursuits.

Individualism

______ property refers to property that is the product of any innovative activity, such as a screenplay, a music score, or the chemical formula for a new drug.

Intellectual

Select the accurate statement about intellectual property laws.

Intellectual property laws reward creativity and provide an incentive for people to search for novel ways of doing things.

What is an accurate description of the World Bank?

It focuses on helping developing countries to fight poverty through investments in the underlying structure of the country.

Identify the accurate statement about individualism.

It stresses that society should be based on individual economic and political freedoms.

Based on rankings by Forbes in 2003, the second-largest source country of multinational enterprises was _____.

Japan

What is an accurate description of the globalization of production?

Locating each stage of production where it can be done most economically

How are monopolies viewed in a market economy?

Monopolies are considered a negative force as they can restrict output and increase prices.

In the late 1970s, the communist version of socialism was at its highest point. This has declined dramatically today with old-style communism found most notably in only _____.

North Korea

When NAFTA was first introduced, what was the biggest argument opponents presented?

U.S. firms would move manufacturing to Mexico and feel free to pollute the air and employ child labor.

The negotiations called the _____, finalized in December 1993, established the World Trade Organization to police the international trading system.

Uruguay Round

When global institutions were introduced in the 1940s, governments in struggling nations would turn to the _____ for low-interest loans needed for infrastructure projects such as building roads.

World Bank

In the early 20th century, communists differed from social democrats in that communists believed in

a strategy of revolutionary action.

Why are consumer products less likely than industrial products to be a source for the global marketplace? a. Differences in consumer tastes b. More expensive to promote industrial products c. Legal regulations prevent distribution of consumer goods d. Fewer consumers use industrial products

a. Differences in consumer tastes

Critics of globalization point out that free trade a. allows firms to abuse the weak labor and environmental laws in developing countries. b. reduces job opportunities in developing nations where wages are much lower. c. minimizes pollution in the world's poorer countries. d. provides developed nations with a cost advantage over developing nations.

a. allows firms to abuse the weak labor and environmental laws in developing countries.

Critics of globalization point out that free trade

allows firms to abuse the weak labor and environmental laws in developing countries.

One concern voiced by critics of globalization is that

an interdependent global economy shifts economic power away from national governments and toward organizations such as the United Nations.