International Business Chapter 1 Globalization
Which of the following most likely represents the greatest accomplishment of the 1994 revision of the GATT?
A) Creation of the World Trade Organization
Which of the following is defined as the use of computer networks to purchase, sell, or exchange products; service customers; and collaborate with partners?
A) E-commerce
Which of the following does Juan most likely cite to support his argument regarding the influence of supranational institutions on national sovereignty?
A) Examples of the United Nations imposing its will on nations
Ciao plans to build a model of car that can be marketed in Italy, Spain, and the new foreign market essentially without any changes. The car would be an example of which of the following?
A) Global product
Which of the following was created to regulate fixed exchange rates and enforce the rules of the international monetary system?
A) International Monetary Fund
Which of the following most likely supports Rina's argument over Juan's concerning the homogenization of national cultures?
A) Many countries specialize in producing the goods and services they can produce most efficiently.
Which of the following makes the world market more accessible for companies that sell traditional products by lessening the cost and difficulties associated with global communication?
A) Technology
Levis Jeans made in the United States and sold in Russia are an example of which of the following?
A) U.S. export
All of the following represent examples of regional trade agreements EXCEPT ________.
A) WTO
The products that Mushi Toys manufactures are examples of ________.
A) global products
Tacky Toys buying its merchandise from Mushi Toys is an example of ________.
A) importing
The total value of goods and services exported by all nations each year is ________.
A) nearly $15 trillion
It is rare for a business to search for production bases and markets at the same time.
FALSE
One commonality among the world's least-global nations is low levels of corruption.
FALSE
Products marketed in all countries essentially without any changes are known as sourced products.
FALSE
Research shows that only large companies can export successfully.
FALSE
Some businesses can become completely immune to events in the international business environment.
FALSE
The power of the General Agreement on Tariffs and Trade (GATT) to settle trade disputes is what sets it apart from its predecessor, the World Trade Organization (WTO).
FALSE
The revenues of the world's largest businesses are lower in value than the gross domestic products of the smallest nations.
FALSE
The rules of the international monetary system are enforced by the World Bank.
FALSE
The term globalization of production refers to convergence in buyer preferences in markets around the world.
FALSE
Today, NAFTA is the international organization that enforces the rules of international trade worldwide.
FALSE
A born global firm is a company that engages in international business from or near its inception.
TRUE
A country's GDP per capita is its GDP divided by its population.
TRUE
Extranets give distributors and suppliers access to a company's online database to place orders electronically.
TRUE
Flexible labor markets allow workers to be redeployed rapidly to sectors of the economy where they are highly valued.
TRUE
Imports are goods and services purchased abroad and brought into a country.
TRUE
In the World Trade Organization (WTO) dispute settlement system, the WTO has the ability to penalize offending nations.
TRUE
International business is any commercial transaction that crosses the borders of two or more
TRUE
International firms tend to support reasonable labor and environmental laws to expand future local markets for their businesses.
TRUE
Multinational corporations (MNCs) have direct investments abroad in multiple countries.
TRUE
Opponents of globalization argue that it causes a "race to the bottom" in environmental conditions.
TRUE
Pro-globalization economists believe globalization increases wealth in both developed and developing nations.
TRUE
Research shows that pollution-intensive U.S. companies tend to invest in nations with stricter environmental standards.
TRUE
Resistance to worldwide trade agreements is causing some nations to place greater emphasis on regional pacts.
TRUE
Supporters and critics of globalization appear to agree that globalization causes dislocation in
TRUE
The General Agreement on Tariffs and Trade (GATT) was designed to promote free trade by reducing both tariffs and nontariff barriers to international trade.
TRUE
The role of the World Bank is to provide financing for national economic development efforts.
TRUE
The world today is experiencing a trend toward more porous national boundaries.
TRUE
Which of the following terms is used to refer to widespread job turnover throughout an economy?
B) Churning
________ are all goods and services sold abroad and sent out of a country.
B) Exports
Which of the following refers to convergence in buyer preferences in markets around the world?
B) Globalization of markets
The decision by Ciao to build a manufacturing facility in a foreign market is an example of which of the following?
B) Globalization of production
________ is defined as the dispersal of production activities to locations that help a company achieve its cost-minimization or quality-maximization objectives for a good or service.
B) Globalization of production
According to the opponents of globalization, which of the following occurs as a result of worker dislocation brought about by globalization?
B) Gradual lowering of workers' wages
Which of the following is most likely not an effect of globalization?
B) Increases in the economic isolation of developing countries
Which of the following countries has an average annual GDP growth rate of over 5%?
B) India
If you were to advise Sabrina on the myths versus facts of exporting, which of the following would you say is a fact?
B) Sabrina's products do not need export licensing.
According to the Globalization Index, which of the following nations ranks first as the most globalized nation overall?
B) Singapore
Which of the following most likely supports Rina's argument over Juan's concerning wages and working conditions in developing countries?
B) Some developing countries have experienced significant increases in wages as a result of globalization.
The three main goals of the ________ are to help the free flow of trade, help negotiate the further opening of markets, and settle trade disputes between its members.
B) World Trade Organization (WTO)
Donna believes that to be successful globally a company must design and build products and services for export from the beginning, not as an afterthought following the conquest of domestic markets. Donna is referring to the principle that businesses should ________.
B) emphasize global awareness
Jeans, Unlimited has designed a new line of accessories and must build a new facility to produce them. To avoid paying tariffs when importing raw materials for processing and when exporting finished goods, the company should consider locating its assembly plant in a(n) ________.
B) export processing zone
The three main branches of the debate over income inequality include each of the following EXCEPT ________.
B) inequality in nongovernmental organizations
The "global business environment" consists of four distinct elements: globalization, national business environments, the international business environment, and ________.
B) international firm management
Mushi Toys is an example of a(n) ________.
B) multinational company
A business that has direct investments (in the form of marketing or manufacturing subsidiaries) abroad in multiple countries is called a ________.
B) multinational corporation
Denationalization refers to ________.
B) national boundaries becoming less relevant
The first age of globalization extended from ________.
B) the mid-1800s to the 1920s
The world's least global nations account for approximately what percentage of the world's total population?
C) 50%
Which of the following is an example of the globalization of production?
C) A U.S. company builds a manufacturing facility in India
________ give distributors and suppliers access to a company's database to place orders or restock inventories electronically and automatically.
C) Extranets
Which of the following are products marketed in all countries essentially without any changes?
C) Global products
________ is the trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies.
C) Globalization
Which of the following arguments against globalization could most likely be made using Jeans, Unlimited as an example?
C) Globalization causes companies to produce goods in nations with the most lenient labor regulations.
Rina most likely counters Juan's claim regarding the environmental effects of globalization by pointing out which of the following?
C) Pollution-intensive U.S. firms tend to invest in countries with stricter environmental standards..
If Sabrina needs $500,000 to expand her business internationally, which of the following organizations might be her best bet?
C) Small Business Administration
In marketing a single car to customers in Italy, Spain, and the new foreign market, which of the following is most likely to help Ciao reduce its marketing costs?
C) Standardizing certain marketing activities
Taxes levied on traded goods are known as which of the following?
C) Tariffs
Which of the following helped launch the second age of globalization?
C) The collapse of the wall separating East and West Berlin
Olive oil made in Italy and sold in the United States is an example of which of the following?
C) U.S. import
Which of the following would be most important for the Acme staff to consider when deciding whether to outsource its software development to India in order to lower production costs?
C) What type of training is received by programmers in the software firms Acme is considering?
The International Monetary Fund serves each of the following purposes EXCEPT ________.
C) encouraging competitive exchange devaluation
A special region in which companies can engage in tariff-free importing and exporting is called a(n) ________.
C) export-processing zone (EPZ)
Mushi Toys selling its products to Tacky Toys is an example of ________.
C) exporting
Whereas relocating production to low-cost locales traditionally meant production of ________ almost exclusively, it increasingly applies to the production of ________.
C) goods; services
The value of all goods and services produced by a country's domestic and international activities over a one-year period is the country's ________.
C) gross national product (GNP)
Any commercial transaction that crosses the borders of two or more nations is known as ________.
C) international business
Trade unions claim that by permitting international firms to continually move to nations with relatively lower labor standards, globalization ________ labor's bargaining power and forces overall labor standards ________.
C) reduces; lower
The consulting group identifies two software development companies in India that could provide programming services at a lower cost than Acme's current cost for programming. Which of the following, if true, would most strongly suggest that outsourcing to these software companies would NOT promote Acme's business growth?
D) Cultural differences in working with the Indian companies would cost more to resolve than any savings gained.
For 75 years, from the start of the First World War to the end of the Cold War, there was a geographic divide between ________, and an ideological divide between ________.
D) East and West; communism and capitalism
Which of the following can help Sabrina reach consumers in different corners of the world quickly and inexpensively?
D) Internet
A limit placed on the quantity of an imported product is known as which of the following?
D) Nontariff barrier
Which of the following is an example of a service that a company might produce in a foreign country to benefit from low-cost labor?
D) Research
According to the Globalization Index, which of the following is NOT one of the top 10 most globalized nations?
D) Saudi Arabia
Each of the following countries has an average annual GDP growth rate larger than that of the U.S. EXCEPT ________.
D) Saudi Arabia
The ________ is an agency created to provide financing for national economic development efforts.
D) World Bank
Which of the following countries has a negative average annual GDP growth rate?
D) Zimbabwe
Critics of globalization argue that globalization causes environmental conditions to ________.
D) decline significantly
A major flaw of the original General Agreement on Tariffs and Trade (GATT) was that it lacked the power to ________.
D) enforce world trade rules
Two major forces that underlie the expansion of globalization are ________ and ________.
D) falling barriers to trade and investment; technological innovation
All goods and services purchased abroad and brought into a country are called ________.
D) imports
Key characteristics of born global firms are an ________ and knowledge-based organizational capabilities.
D) innovative culture
According to Donna, a key to success in global markets is having detailed knowledge of what international customers want, and ensuring that the company is flexible enough to customize products to meet those needs. Donna is referring to the notion of ________.
D) knowing the customer
The purpose of the General Agreement on Tariffs and Trade (GATT) was to ________.
D) promote free trade
The first age of globalization was halted by all of the following EXCEPT ________.
D) the Cold War
The facilities that Jeans, Unlimited operates in Southeast Asia are examples of ________.
D) the globalization of production
Critics of globalization argue that it eliminates jobs in developing nations.
FALSE
Critics of globalization believe the overall gains that accrue to national economies are worth the lost livelihoods of some workers.
FALSE
Gross national product (GNP) is the value of all goods and services produced by a domestic economy over a one-year period.
FALSE