MGT 302 EXAM 1
What is the best description of the globalization of markets?
Brining traditionally separate national markets into one cohesive marketplace
______ refers to a political system that values the needs of society over that of an individual.
Collectivism
What is an accurate depiction of Latin America when considering international business?
While favorable economic trends have recently occurred, there is no guarantee that they will continue.
A(n) ______ is a document that specifies the conditions under which an exchange is to occur, detailing the rights and obligations of the involved parties.
contract
In a pure ______ economy, all productive activities are owned privately -- they are not owned by the state.
market
During the economic downturn of 2008-2009, the US government "bailed out" AIG to present that financial institution from collapsing because it felt that if AIG collapsed, it would lead to a serious consequences for the entire US financial system. By helping out this troubled firm because it appeared vital to national interests, the US government was acting as a ______ economy.
mixed
In a _______ economy, both private enterprise and some state monopolies co-exist.
mixed
The legal rights regarding the use of a resource by a business or individual are known as _____ rights.
property
The text notes that there are two macro factors fueling the trend toward greater globalization. These two factors focus on a decline in trade barriers and
technological change
At some point, rising income levels lead to demands for greater environmental protection and, as a result, pollution levels fall. A study by Grossman and Krueger found this generally occurred before per capita income levels reached
$8,000
Those who promote the idea of free trade say that one way for the world's poorest countries to improve their situation is to ________.
adopt economic policies based on free market economies
Which environmental concern has been found to rise steadily with higher-income levels?
carbon-dioxide emissions
What are the three broad types of economic systems?
command economy, market economy, and mixed economy
A country that bases its laws on the traditions within the country's legal history operates under a ______ law legal system.
common
_____ refers to a political system in which the citizens exercise the power directly or elect representatives to form a governing body
democracy
Opponents of globalization are concerned that manufacturing jobs will be moved to more _______ countries.
developing
International trade occurs when a company
exports good or services to consumers in another country
The outward stock of foreign direct investment has ______ for the world as a whole since 1995.
increased
Samuel wrote a screenplay and he is traveling to Los Angeles next week to pitch his idea to a movie studio. The screenplay is an example of ______ property.
intellectual
_____ property refers to property such as a screenplay, a music score, or the chemical formula for a new drug.
intellectual
Which argument favors globalization?
lowering international trade barriers raises the incomes of consumers
The system of government in a nation is called the ________ system.
political
The term _____ is used to stress that the political, economic, and legal systems of a country are connected.
political economy
The term _______ is used to stress that the political, economic, and legal systems of a country are connected.
political economy
Corner Coffee Inc. makes coffee pots. Last year, thirty people received serious burns when water leaked down the side of the carafe of a Corner Coffeemaker while the coffee was brewing. Even though Corner Coffee pulled this coffee pot from production, all thirty people who were injured have filed a criminal case against the company. These customers can hold the company responsible based on ____ law.
product liability
Shondra's company developed a new method for sealing medication bottles and has decided to license their patented method to the leading drug manufacturers in the United States. Shondra's company has the legal right to do this based on the _____ rights they have for this method.
property
The decline of the United States' standing as a dominant industrial power is considered a(n) ______ decline because it reflects the faster economic growth of other economies.
relative
The decline of the United States' standing as a dominant industrial power is considered a(n) _________ decline because it reflects the faster economic growth of other economies.
relative
collectivism refers to a political system that
restricts an individual's right to do something on the grounds that it runs counter to the "good of society"
In a pure market economy, production of gods is determined by
the interaction of supply and demand
The outward stock of foreign direct investment refers to the ______ of foreign investments by firms domiciled in a nation outside of that nation's borders
total cumulative value
What is one concern voiced by critics of globalization?
An interdependent global economy shifts economic power away from national governments and toward organizations such as the United Nations.
Multinational Enterprise (MNE)
Any business that has productive activities in two or more countries
In terms of conduction international business in China, it can be said that
China represents a large -- basically untapped -- market
Which statement accurately describes the global economy in the twenty-first century?
More nations are becoming part of the developed world.
Which global institution is the successor to GATT?
The World Trade Organization
There have been two notable trends in the demographics of multinational enterprises in the last 50 years. These include _______.
The rise of non-U.S. multinationals and the growth of mini-multinationals
Globalization
The shift toward a more integrated and interdependent world economy
Foreign Direct Investment (FDI)
When a firm invests resources in business activities outside its home country
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
A government plans the quantity of goods and services produced as well as the prices at which they are sold in a pure _______ economy.
command
Opponents of globalization are concerned that manufacturing jobs will be moved to more ________ countries.
developing
Critics of globalization protest in order to ______.
diminish the impact of the culture of multinational enterprises on the world
The opponents of globalization argue that falling barriers to international trade
eliminate manufacturing jobs in wealthy economies
A(n) _______ business is any firm that engages in cross-border trade or investment.
international
A(n) _______ is any business that has productive activities in two or more countries.
multinational enterprise
The four facts that describe the demographics of the global economy a half a century ago.
U.S. dominance in the world economy and world trade; Dominance of large, multinational U.S. firms in the international business scene; U.S. dominance in world foreign direct investment; and Roughly half of the globe was off-limits to Western international business
The three broad types of economic systems include a market economy, a mixed economy and a(n) ____ economy.
command
The three broad types of economic systems include a market economy, a mixed economy and a(n) ______ economy.
command
A country that bases its laws on the traditions within the country's legal history operates under a _______ law legal system.
common
The body of law that governs oral and written agreements associated with the exchange of goods, services, money, and property is known as ______ law.
contract
Michael works at a lawnmower manufacturing company in St. Louis, Missouri, and his company imports component part from Thailand and also ships final product to various countries. Michael's company is an example of a(n) _________ business.
international
A company is involved in foreign direct investment when it
invests in business activities outside of its home country
Factors of production
labor, energy, land, and capital
What three systems make up the political economy of a country?
legal system, economic system, and political system
Product _____ is the area of law that holds a firm and its officers responsible for injuries caused by their product.
liability
What is an accurate description of microprocessors?
They provide a low-cost way to process large amounts of information
Influential economists, politicians, and business leaders who favor globalization argue that
Falling barriers to international trade drive the economy toward greater prosperity
What issue might be raised at an antiglobalization demonstration?
Falling barriers to international trade results in job losses in those industries targeted by foreign competitors
True of False: Unlike the economic system of a country, the legal system is NOT influenced by the prevailing political system
False
outward stock of FDI
Total accumulated value of assets owned by firms domiciled in a nation outside of that nation's borders at a given time
The text lists several reasons that stand out as the cause for economic stagnation in the world's poorest countries. What are three of those reasons?
Totalitarian governments, poor property rights protection, and prolonged civil wars
One of the global institutions that emerged over the past 75 years is GATT which stands for the General Agreement on Tariffs and ________.
Trade
True of False: 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
Which of the following statements about political systems is TRUE?
Typically, political systems that place a high emphasis on individualism tend to be democratic
If you were asked to provide a fact about a common law system, what should you say?
A common law system has a degree of flexibility that other legal systems lack
The development of the microprocessor has lead to ______.
A reduction in the cost of global communications
What is the objective of a pure command economy?
Allotment of resources for the overall good of society.
Half a century ago, which country dominated world foreign direct investment?
United States
International Trade
When a firm exports good and services to consumers in another country
In the 1960s, when a customer in the United States purchased a television, that television had been manufactured in the United States. Today, thanks to the fall of international trade barriers, televisions purchased in the United States might be manufactured in China or South Korea. This change has occurred as the result of ______.
Globalization
Hanson Housewares Inc., based in Tennessee, sources goods from Southeast Asia to take advantage of labor cost savings. This is an example of _______.
The globalization of production
Globalization of markets
The merging of historically distinct and separate national markets into one huge global marketplace
Why do companies engage in the globalization of production?
To lower their overall cost structure or improve the quality of their product offerings
In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S. position compare today?
It has diminished in power
What statement BEST describes a totalitarian system?
It is a form of government in which the state recognizes no limits to its authority and strives to regulate all aspects of public and private life.
If all other things are equal, what three environments would make a country more attractive as a place to do business in?
Market-based economic system, strong protection of property rights, and democratic political institutions
The ______ system of a country refers to the rules, or laws, that regulate behavior along with the system that enforces them.
legal
What are the two macro factors that underlie the trend toward greater globalization?
Technological change and the decline in trade barriers
Globalization of production
The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production.
What two broad issues for international business can be identified when considering the political, economic, and legal environments of a country?
These systems raise important ethical issues that have implications for international business and these systems clearly influence the attractiveness of a country as a market or investment site
