EXAM 1 Ch. 1

Which of the following is a benefit of lowering the barriers to international trade? A. Firms can view the world, rather than a single country, as their market. B. The lowering of barriers puts a brake on globalization of both markets and production. C. The lowering of barriers promotes communism across the globe. D. Domestic industries are better protected from foreign competition.

A. Firms can view the world, rather than a single country, as their market.

________ occurs when a firm exports goods or services to consumers in another country. A. International trade B. Inward investment C. Outsourcing D. Foreign direct investment

A. International trade

Which of the following is a key macro factor that underlies the trend toward greater globalization? A. Technological change, particularly in communication, information processing, and transportation. B. Uniformity achieved in the level of education and standards of living across the world. C. Establishment of global institutions like the WTO and IMF to promote spread of globalization. D. Increase in subsidies to ailing sectors like agriculture.

A. Technological change, particularly in communication, information processing, and transportation.

Since the 1960s, which of the following has been a notable trend in the demographics of the multinational enterprise? A. The growth of mini-multinationals B. The growth of government-owned multinational enterprises C. The decline of multinational companies in the manufacturing sector D. The decline of non-U.S. multinationals

A. The growth of mini-multinationals

A company does not need to be big to benefit from globalization. A. True B. False

A. True

One concern of globalization opponents is that falling barriers to international trade may destroy manufacturing jobs in wealthy advanced economies such as the United States A. True B. False

A. True

The shift toward a more integrated and interdependent world economy is referred to as globalization. A. True B. False

A. True

What is the main reason that managing an international business differs from managing a domestic business? A. Because international managers are more experienced. B. Because countries differ in their cultures and systems. C. Because countries want to do business with their neighbors. D. Because countries want to keep their transactions simple.

B. Because countries differ in their cultures and systems.

A current trend in international business is the decline of medium-sized and small multinationals, known as mini-multinationals. A. True B. False

B. False

In the early 1960s, the United States was by far the world's dominant industrial power. However by 2009, it lost its dominant position and now, is no longer the world's largest industrial power. A. True B. False

B. False

Managing an international business is much easier than managing a domestic business. A. True B. False

B. False

The World Bank is known as the lender of the last resort. A. True B. False

B. False

The expansion of world trade implies that nations are becoming less dependent on each other for important goods and services. A. True B. False

B. False

The globalization of markets and production and the resulting growth of world trade, foreign direct investment, and imports all imply that firms are finding their home markets increasingly protected from foreign competitors. A. True B. False

B. False

The globalization of the world economy has resulted in a relative increase in the dominance of U.S. firms in the global marketplace A. True B. False

B. False

Globalization of markets results in markets becoming ____. A. less competitive B. less diverse C. less interdependent D. more protected

B. less diverse

A multinational enterprise is a firm that ____. A. exports its products to multiple countries B. operates in two or more countries C. lists its securities on a public exchange D. does most of its business on the Internet

B. operates in two or more countries

A U.S. Investment firm, Fin-Smart, set up a customer service call center in India to take advantage of the lower labor costs. This is called ____. A. homogenizing markets B. outsourcing C. horizontal integration D. vertical integration

B. outsourcing

NAFTA was formed between: A. Venezuela, Brazil, and Argentina. B. Canada, Argentina, and Chile. C. Canada, Mexico, and the United States. D. Peru, Venezuela, and Chile.

C. Canada, Mexico, and the United States.

Which of the following has enabled globalization of markets? A. Increased government ownership of factors of production B. Differentiation between national markets C. Lower barriers to cross border trade D. Reduced homogeneity of material culture across the world

C. Lower barriers to cross border trade

Which of the following statements is true about the implications of globalization on developing countries? A. Globalization has depressed wages in developing nations. B. Globalization has destroyed manufacturing jobs in developing economies. C. The citizens of developing countries have achieved higher living standards due to globalization. D. Globalization is increasing the wage gap between developing and developed nations as developed nations experience rapid economic growth.

C. The citizens of developing countries have achieved higher living standards due to globalization.

The relative decline of the United States in the share of world output and world exports reflects ____. A. the deepening of the global financial crisis B. an increase in the barriers to foreign trade in the U.S. C. the growth in the economic development of the world economy D. the reduced industrialization in developing nations

C. the growth in the economic development of the world economy

Which of the following is a risk associated with globalization? A. Restrictions on competition B. Excessive market regulation C. Differentiation of markets D. Global financial contagion

D. Global financial contagion

Although Boeing is incorporated in the United States, a supplier in Singapore makes the doors for the nose landing gear, and suppliers in Italy manufacture wing flaps. Boeing is taking part in: A. exporting. B. licensing. C. franchising. D. outsourcing.

D. outsourcing.

Throughout the 1990s, the amount of foreign direct investment directed at both developed and developing nations increased dramatically. This trend reflects: A. the decline in cross-border flows of foreign direct investment. B. a slowdown in global economic activity. C. the increasing share of the U.S. in the total FDI stock. D. the increasing internationalization of business corporations.

D. the increasing internationalization of business corporations.