IB Chapter 1

When NAFTA was first introduced, what was the biggest argument opponents presented? Multiple choice question. U.S. firms would move manufacturing to Mexico and feel free to pollute the air and employ child labor. Canadian firms would receive the most benefit because they would only be exporting goods and would not import from the United States or Mexico. Mexican citizens who had immigrated to the United States would be paid less than their counterparts back home. The United States would pay lower tariffs than both Mexico and Canada combined.

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

During the 1960s, U.S. firms created just over _____ of worldwide foreign direct investment and British firms were second accounting for just over 10 percent. Multiple choice question. 65 percent 35 percent 20 percent 80 percent

65 percent

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

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

The doubling of the power of microprocessor technology while the costs of its production decreases by half is called _________ Law. • Moore's • Keyne's • Skinner's • Maslow's

Moore's

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

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

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 • To implement a first-mover advantage • To enhance their ability to trade with foreign countries • To encourage domestic business to consider international trade

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. • Foreign direct investments were encouraged. • Domestic firms were left unprotected from foreign competition. • First-mover advantage was enhanced.

Trade barriers were increased.

While lowering trade barriers initially made global production possible, the advent of technology made globalization a reality. • True • False

True

Former communist nations present opportunities to Western international business as these nations show continued commitment to _________________. • plutocracy • tyranny • monarchy • democracy

democracy

Critics of globalization protest in order to increase the number of enterprises that offshore their business activities. lower the barriers to cross-border investments. encourage a shift toward a more integrated and interdependent global economy. diminish the impact of the culture of multinational enterprises on the world.

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

A U.S.-based shoe company has decided to invest in a British company that specializes in clasps and buckles. This would be an example of • repatriation • international trade • market diversity • foreign direct investment

foreign direct investment

When Jerry started his small appliance manufacturing company in the 1950s, every component part was made in the United States and the product was assembled in the United States. Today, he sources the components from China. The change at this company is an example of the • purchasing power parity • tragedy of the commons • Sullivan principle • globalization of production

globalization of production

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

increased

The globalization of _____________ is the term used to describe the merging of national markets into one large global place. • production • consumers • institutions • markets

markets

Corp., based in Ohio, sources goods from Southeast Asia to take advantage of labor cost savings. This company is benefiting from • a franchise operation • the globalization of production • domestic production • intrastate investment

the globalization of production

Paragon Corp., based in Ohio, sources goods from Southeast Asia to take advantage of labor cost savings. This company is benefiting from • intrastate investment • a franchise operation • the globalization of production • domestic production

the globalization of production

Moore's law predicts that • computer power will double every 18 months. • costs for production of microprocessors doubles continually. • software is getting slower more rapidly than hardware becomes faster. • software is surpassing hardware in terms of speed and efficiency.

computer power will double every 18 months.

Brite-Way Lighting is based in California and sells products within the United States as well as to ten foreign countries. Brite-Way Lighting is an example of a(n) _____ business. Multiple choice question. intranational home-country domestic international

international

While the United States was the dominant industrial power in the early 1960s, by 2018, __________ took over that role. • China • France • Italy • Germany

China

The first web browser was introduced to the public in the 1970s and started the explosive growth of the Internet in foreign transactions. • True • False

False Reason: The first web browser was introduced in 1994 and led to the explosive growth of the Internet.

The World Trade Organization (WTO) is the successor to • the United Nations • the IMF • GATT • G20

GATT

It is common practice for people today to use products that are produced or assembled in various nations around the world. This is a reflection of • nationalism • dynamism • globalization • centralization

Globalization

It is common practice for people today to use products that are produced or assembled in various nations around the world. This is a reflection of nationalism dynamism globalization centralization

Globalization

Which term refers to the shift toward a more integrated and interdependent world economy? • Isolationism • Democracy • Globalization • Nationalism

Globalization

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 mini-multinational globalization of production globalization of markets stock of FDI

Globalization of markets

A(n) ______ business is any firm that engages in cross-border trade or investment. Multiple choice question. intranational international supranational transnational

International

The ___________ has developed into the information backbone of the global economy and reduced the constraints of location, scale, and time zone. • Internet • IMF • WTO • GATT

Internet

In the early 1960s, the United States was the world's dominant industrial power. How does the U.S. position compare today? • It is the only nation to see a decrease in its industrial power. • It has grown significantly in terms of industrial power. • It has diminished industrial power. • It has about the same industrial power.

It has diminished industrial power.

What is one benefit of the Internet? • It makes it easier to protect copyright materials. • It is independent of Moore's law. • It makes it easier for buyers and sellers to connect. • It can only be used by large businesses.

It makes it easier for buyers and sellers to connect.

Which of the following are notable trends in the demographics of multinational enterprises since the 1960s? Select all that apply The decline of non-U.S. multinationals The decline of mini-multinationals The rise of non-U.S. multinationals The growth of mini-multinationals

The rise of non-US multinationals The growth of mini-multinationals

What is an accurate description of microprocessors? • Their main purpose is to regulate sales. • Their power has been the same since their invention. • They can decode vast amounts of information. • They continue to increase in cost.

They can decode vast amounts of information.

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. True False

True

One concern voiced by critics of globalization is that Multiple choice question. an interdependent global economy shifts economic power away from national governments and toward organizations such as the United Nations. with globalization, companies are likely to move their operations to countries with more stringent labor and environment regulations. globalization increases the wage rates of unskilled workers in advanced countries. falling barriers to cross-border trade and investment reduce job opportunities in developing nations where wages are much lower.

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

According to critics of globalization, increased free trade and investment over the past few decades have Multiple choice question. broadened the gap between the rich and poor nations. prevented countries from being interdependent on one another. decreased the selection of goods and services available to consumers. reduced job opportunities in developing nations.

broadened the gap between the rich and poor nations.

Current trends indicate that, due to the emerging economies, the world is moving ____________ an economic system that is more favorable for international business. • closer to • further away from

closer to

The opponents of globalization argue that falling barriers to international trade will Multiple choice question. reduce job opportunities in developing nations where wages are much lower. prevent countries from being interdependent on one another. increase service jobs around the world. eliminate manufacturing jobs in wealthy economies.

eliminate manufacturing jobs in wealthy economies.

International trade occurs when a firm ______________ • removes a foreign supplier from its supply chain • invests in business activities inside its home country • exports goods or services to consumers in another country • purchases a foreign company

exports goods or services to consumers in another country

Influencial economists, politicians, and business leaders who favor globalization argue that • raising barriers to international investments will increase job opportunities in developing nations. • lowering trade barriers decreases the incomes of consumers. • increasing cross-border investment will increase the prices for goods and services. • falling barriers to international trade drive the economy toward greater prosperity.

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

The International Monetary Fund and the World Bank are both examples of ________________ that help govern the global business system. • federal mandates • global institutions • mini-multinationals • foreign markets

global institutions

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

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

The risks of doing business in countries that are facing revolutions are the same as countries not facing revolutions. higher than in countries not facing revolutions. not impacted by the threat of revolution. lower than in countries not facing revolutions.

higher than in countries not facing revolutions

If you were to describe the global economy of the twenty-first century, it would be accurate to say that barriers to the free flow of goods have been increasing. more nations are becoming part of the developed world. globalization limits a country's movement toward greater economic development. fewer nations are adopting liberal economic policies.

more nations are becoming part of the developed world.

As the barriers to the free flow of goods, services, and capital fell during the 1970s, one motivation for foreign direct investment by non-U.S. firms was the desire to decrease their shares of world output. raise the barriers to cross-border investments. move production activities to more desirable locations. limit the use of communication technology.

move production activities to more desirable locations.

A(n) _____________ is any entity that conducts business in at least two countries. • intrastate corporation • multinational enterprise • transnational union • conglomerate

multinational enterprise

The development of the microprocessor has • minimized technological advancements. • reduced the cost of global communications. • limited the amount of information that can be shared. • increased the cost of technology overall.

reduced the cost of global communications.

Some demonstrations against globalization are based on the idea that falling barriers to international trade Multiple choice question. reduce uniformity among national markets. increase the choice of goods and services to consumers. reduce interdependency between countries. result in job losses in industries targeted by foreign competitors.

result in job losses in industries targeted by foreign competitors.

Advances in information processing and communication are two ways _________________ has made the globalization of markets a reality. • technology • production • logistics • media

technology

Just a few decades ago, it would have cost a business much more money to find buyers in a foreign country. What has helped lower the cost of this process and allows buyers and sellers to easily find each other regardless of their location? • Internet • Tariffs • Transportation • JIT inventories

Internet

Global institutions are needed to shift economic power away from national governments prevent firms from offshoring their production activities stabilize and monitor the global marketplace promote the raising of barriers to cross-trade and investment

Stabilize and monitor the global marketplace

During the 1960s, which country was the predominant world power in terms of foreign direct investment? • The United Kingdom • China • The United States • Germany

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 • The International Monetary Fund • The United Nations • The World Bank

The World Trade Organization

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

• U.S. dominance in world foreign direct investment • 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 the world economy and world trade