IB Chapter 1

The negotiations called the _____, finalized in December 1993, established the World Trade Organization to police the international trading system. - G20 Agreement - Free Trade - Uruguay Round - Doha Talks

Uruguay Round

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

higher than in countries not facing revolutions.

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

increased

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

international

Those who support globalization argue that increasing globalization will - decrease job opportunities in developing nations. - result in lesser uniformity among countries. - lead to reduced prices for goods and services. - reduce the incomes of consumers.

lead to reduced prices for goods and services.

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

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-US firms was the desire to - decrease their share of world output - raise the barriers to cross border investments - move production actives to more desirable locations - limit use of communication technology

move production actives to more desirable locations

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

stabilize and monitor the global marketplace.

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

technology

The Johnson Automotive Group recently closed two of its US manufacturing facilities and opened a new facility in Asia to take advantage of lower labor costs and savings in energy costs. The company made this change in order to benefit from _____. - factors of production - consumer preferences - home country advantage - first mover advantage

Factors of production

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

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 ______. - G20 - the IMF - GATT - The UN

GATT

The International Monetary Fund and the World Bank are both examples of _____ that help govern the global business system. - Global institutions - Federal Mandates - Mini-multinationals - Foreign Markets

Global institutions

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? - JIT inventories - Internet - Tariffs - Transportation

Internet

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

Internet

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

It makes it easier for buyers and sellers to connect.

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

Markets

Land, labor, capital, and energy are all examples of factors of _____. - Markets - Preference - Tariffs - Production

Production

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

democracy

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

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

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. - international - home- country - domestic - intranational

international

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

multinational enterprise

The Development of the Microprocessor has - increased the costs of technology overall - minimized technologic advancements - limited the amount of information that can be shared - reduced the cost of global communications

reduced the cost of global communications

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

result in job losses in industries targeted by foreign competitors.

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 return to isolationism - significant drop in forward exchange rates - the lack of effective transportation modes

the faster economic growth of other economies

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

they can decode vast amounts of information

During the 1960s, which country was the predominant world power in terms of foreign direct investment? - china - germany - united kingdom - united states

united states

its is common practice for people toady to use products that are produced or assembled in various nations around the world. this is a reflection of - nationalism - dynamism - centralization - Globalization

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 _____. - Globalization of markets - Globalization or production - Mini- Multinational - Stock of FDI

Globalization of Markets

When Jerry started his small appliance manufacturing company in the 1950s, every component part was made in the USA and the product was assembled in the USA. Today, he sources the components from China. The change at this company is an example of the _____. - Globalization of production - Tragedy of commons Purchasing power parity - Sullivan principle

Globalization of production

Which organization ensures that nation-states comply to the rules associated with trade treaties signed by member states? - The World Trade Organization - The United Nations - The World Bank - The International Monetary Fund

The World Trade Organization

The Uruguay Round negotiations resulted in - Restricting GATT from covering services. - Establishing the G20 to police the international trading system. - Reducing protection for patents, trademarks, and copyrights. - Lowering the trade barriers between various national markets.

Lowering the trade barriers between various national markets.

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

Select the four facts that described the demographics of the global economy up until the 1960s. - U.S. dominance in world foreign direct investment - 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 - U.S. dominance in underdeveloped, third-world countries - Roughly half of the globe was off-limits to Western international business

- U.S. dominance in world foreign direct investment - 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

During the 1960s, US firms created just over _____ of worldwide foreign direct investment and British firms were second accounting for just over 10 percent. - 35% - 65% - 20% - 80%

65%

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

- Globalization of production

According to the critics of globalization, what are two results from falling trade barriers? - 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

- a depression of wages in developed nations - the destruction of manufacturing jobs in advanced economies

Critics of globalization point out that free trade - provides developed nations with a cost advantage over developing nations. - allows firms to abuse the weak labor and environmental laws in developing countries. - 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.

There have been two notable trends in the demographics of multinational enterprises since the 1960s. These include _____. - the rise of non- US multinationals - the decline of non- US multinationals - the decline of mini-multinationals - the growth of mini-multinationals

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

Foreign direct investment occurs when a(n) - expatriate manager is sent to work in a foreign subsidiary but is directed by the home company. - firm exports goods or services to consumers in another country. - investment is made by a company based in one country into a company or entity based in another country. - stock holding is presented in both domestic and foreign currency.

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

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

It has diminished industrial power.

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

Moore's

A country with high _____ has a barrier to international trade. - Quality of service activities - political stability across countries - demand of products - tariffs on imports of foreign goods

Tariffs on imports of foreign goods

How did nation-states react to the economic environment of the 1920s and 1930s? - Domestic firms were left unprotected from foreign competition - countries encouraged foreign direct investments - trade barriers were increased - first mover advantage was enhanced

Trade barriers were increased

True or false: While lowering trade barriers initially made global production possible, the advent of technology made globalization a reality. True false question.

True Reason: Lower trade barriers made it possible for countries to trade with one another and technological advancements have enhanced this process and created a true global marketplace.

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 Reason: 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.

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

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 - decreased the selection of goods and services available to consumers. - prevented countries from being interdependent on one another. - reduced job opportunities in developing nations. - broadened the gap between the rich and poor 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. - further away from - closer to

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

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

computer power will double every 18 months

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

eliminate manufacturing jobs in wealthy economies.

International trade occurs when a firm _____. - removed a foreign supplier from its supply chain - purchases a foreign company - invest in business activities inside its home country - exports goods or services to consumers in another country

exports goods or services to consumers in another country

Influential economists, politicians, and business leaders who favor globalization argue that - 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. - raising barriers to international investments will increase job opportunities in developing nations.

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