SOM Exam 1 Multiple Choice Questions
Growing income inequality between the skilled and unskilled workers in advanced nations, such as the United States, in a result of the:
Wages for skilled workers being bid up by the labor market and the wages for unskilled workers being discounted
In a pure command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are all dictated by the interaction of demand and supply. (t/f)
false
In practical terms, collectivism creates a more favorable environment for international businesses to operate in than individualism (t/f)
false
Managers in an international business must find ways to work around the limits imposed by specified governmental instituions (t/f)
false
The growing income inequality is a result of the wages for skilled workers being discounted (t/f)
false
The social democrats believed that socialism could be achieved only through violent revolution and totalitarian dictatorship. (t/f)
false
"Exporting jobs" to low-wage nations has contributed to:
higher unemployment in weathly advanced economies such as the United States
The motive behind the high tariffs imposed by nations on imports of manufactured goods, prior to WW2, was to
protect domestic industries from foreign competition
Despite all the talk about the emerging global village, differences between countries such as cultures and political systems are very profound and enduring. (t/f)
true
It is possible that economic growth in developed nations has offset the fall in the share of national income enjoyed by unskilled workers, raising their living standards. (t/f)
true
Plato did not equate collectivism with equality (t/f)
true
The Cold War was in many respects a war between collectivism, championed by the former Soviet Union, and individualism, championed by the United States. (t/f)
true
The governments of China, Vietnam, and Laos are communist in name only because those nations have adopted wide-ranging, market-based economic reforms. (t/f)
true
The real costs of information processing and communication have fallen dramatically in the past two decades. (t/f)
true
Throughout the 1990s, the amount of investment directed at both developed and developing nations increased dramatically. (t/f)
true
The World Trade Organziation, the international monetary fund and its sister institution the world bank, and the united nations were all created by voluntary agreement between individual non states (T/F)
True
The lowering of trade and investment barriers allows firms to base production at the optimal location for that activity. (T/F)
True
The stock of foreign direct investment refers to the cumulative value of foreign investments in a country.(t/f)
True
Which of the following reasons contributed to the Great Depression of the 1930s?
Countries progressively raising trade barriers against each other (Great Depression)
As a result of globalization, international businesses can avoid the haggle of currency exchanges during cross-border transactions(t/f)
false
Which of the following statements reflects the changing demographics of the global economy?
U.S. dominance in export markets has waned as Japan,Germany, and a number of newly industrialized countries have taken a larger share of world exports (demographics)
Which of the following countries has seen a relative decline in its share of world output between 1960 and 2012?
USA
Which of the following has increased in the United States as a result of globalization?
Unemployment Rate has increased as a result of globalization
By the mid-1990s, communism was rising worldwide. (t/f)
false
Globalization critics argue that the decline in unskilled wage rates in advanced economies is due to the:
Mitigation of low wage manufacturing jobs off shore
Which of the following statements supports the claim that the gap between the rich and poor nations of the world has gotten wider because of globalization?
A quarter of the countries with a GDP per capita of less than $1,000 in 1960 had growth rates of less than zero from 1960 to 1995
Karl Marx advocated state ownership of the basic means of production, distribution, and exchange (i.e., businesses). (t/f)
True
Many of the former Communist nations of Europe and Asia seem to share a commitment to democratic policies and free market economies. (t/f)
True
The lowering of trade and investment barriers:
Allows firms to base production at optimal locations outside their home country
Which of the following statements is a general implication of globalization?
As a result of globalization, a severe crisis in one region of the world can affect the entire globe
Which of the following statements best supports the claim that greater uniformity replaces diversity in the context of global markets?
As rival global firms follow each other across countries they
Which of the following has been declining in the developing of nations such as China, India, Russia, Indonesia, Thailand, South Korea, Mexico, Brazil
Barriers to the free flow of goods, services, and capital
The NAFTA was formed in 1994 between:
Canada, Mexico, and the USA
Which of the following best exemplifies FDI ?
Chivalry, a US based phone manufacturing, has set up its own assembly plant in Japan to cater the needs of an asian market
Ryan is the executive general manager of a U.S. multinational and Veronica is a manager in a similar position, but works for another U.S. company that operates only in its home country. In this context, which of the following business functions will be most typically exclusive to Ryan?
Choosing an appropriate mode for entering a particular foreign country (Ryan)
Which of the following statements reflects the nature of the global economy of the twenty first century?
Countries have extensively adopted liberal economic policies (21st)
Which of the following best illustrates the globalization of production?
Daily Diamonds In. buys diamonds from south africa and exports the to india for the cutting process
Which of the following services CANNOT be outsourced to foreign nations?
Delievering closing arguments for a lawsuit
Due to the changing economic geography, many of tomorrow's economic opportunities are most likely to be found in the:
Developing nations of the world such as China, India, and Brazil (changing geography)
Which of the following has been reduced as a result of globalization?
Differences in material Culture
Which of the following is a macro factor underlying the trend toward greater globalization?
Dramatic developments in information processing and other technologies
An argument in support of the falling barriers to international trade and investment is that the falling barriers:
Drive the global economy toward greater prosperity
The minimum that a firm has to do to engage in international business is to:
Export or import products from other countries.
According to many influential economists, the increase in international trade and cross-border investment will result in an increase in the prices of goods and services (t/f)
False
After world war 2, the advanced nations of the west committed themselves to increasing barriers to the free flow of goods, services, and capital between nations (T/F)
False
As a result of globalization companies rarely need to customize marketing strategies, product features, and operating practices in different countries (T/F)
False
As a result of globalization we have been moving toward a world in which national economies are relatively self-contained entities (T/F)
False
As a result of international trade, the economies of the world's nation-states are becoming less intertwined. (T/f)
False
Beginning in the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations from developing to their home countries where labor costs were lower. (t/f)
False
Command economies provide a more favorable environment for innovation and entrepreneurs than market economies (t/f)
False
Highly indebted poor countries (HIPCs) can bootstrap themselves out of poverty by uprising retaileitory trade policies rather than free trade policies (t/f)
False
One of the tenets of collectivism is that the welfare of society is best served by letting people pursue their own economic self-interest. (t/f)
False
Political systems that emphasize collectivism tend to be democratic, while political systems that place a high value on individualism tend to be totalitarian. (t/f)
False
The IMF is less controversial then its sister institution, the World Bank. (T/F)
False
The WTO is seen as the lender of the last resort to nation-states whose economies are in turmoil and who's currencies are losing value against those of other nations (T/F)
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 it easier to protect themselves from attack by foreign competitors. (t/f)
False
The term political economy is used to stress the fact that the political, economic, and legal systems of a country are independent of each other. (t/f)
False
Who, along with representatives from the EU and European central bank represent the 19 largest economies in the world on the G20?
Finance ministers and central bank governors
Substantial impediments, such as barriers to foreign direct investment, make it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe (T/F)
True
Supporters of globalization insist that dislocation in the form of lost jobs is a trade-off that will ultimately lead to the economy being better off. Which of the following is being justified in this case?
Free trade of goods and services (supporters of globalization)
Which of the following is the most appropriate solution to the problem of rising carbon dioxide emissions in developed economies?
Get the nations of the world to agree to policies designed to limit pollutant emissions.
What is the shift toward a more integrated and interdependent world economy called?
Globalization
Critics of globalization say that exporting jobs to low wage nation results in higher unemployment and lower living standards in their home nations. Which of the following statements does NOT support this argument?
Globalization demonstrates a structural adjustments to a more integrated global economy
West Electronic Corporation sources goods and services for its electronics products from different locations around the globe in an attempt to take advantage of differences in the cost and quality of labor and land. This practice demonstrates the:
Globalization of production
Which of the following refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and equality factors such as labor, energy, land, and capital
Globalization of production
Which of the following statements reflects the trend in the changing nature of multinational enterprises?
International business is conducted by not just large firms but also by medium-size and small enterprises.
Michelle, an Italian fashion designer, sells her merchandise by exporting them to the United States, United Kingdom, and Brazil. According to this information, Michelle is most likely involved in:
International trade
For foreign direct investment (FDI) to occur, a firm should primarily:
Invest resources in business activities outside its home country
Which of the following is an argument put forth by critics of the IMF?
It usurps the sovereignty of nation states by telling governments what economic policies they must adopt.
Free trade alone, some argue is a necessary but not sufficient prerequisite to help the worlds poorest countries bootstrap themselves out of poverty. They also recommend:
Large-scale debt relief
Which of the following was a part of the agenda of the Doha round of talks launched by the WTO?
Limiting the use of antidumping laws (Doha)
Early outsourcing efforts were primarily confined to:
Manufacturing activities
What are mini multinationals?
Medium-Sized and small multinationals
Universal Lingo, a U.K. based language translation company employing just 65 people worldwide, has an annual turnover of 1.5 million. In this context, Universal Longo is most likely to be classified as a(n)
Mini-Multinational firm
Richard purchased a computer for $600 in 2014. Compared to the 900 dollar computer that he had purchased way back in 2010, this new one seems to be more efficient in terms of the price he has paid and the power of the microprocessor technology. This is best explained by:
Moores law
Silver Fire Electric Inc., a U.S. based company, has productive activities in more than two countries. As a result, it would be most appropriate to refer to Silver Fire Electric as what type of enterprise?
Multi-National(MNE)
Which of the following is NOT a concern for managers in international businesses?
Percieved distance between home country and operating nations(NOT)
The Uruguay Round extended GATT to cover services as well as manufactured goods. (T/F)
True
The 1993 Uruguay Round:
Provided enhanced protection for patents,trademarks,and copyrights
Which of the following is most likely to be observed in todays global economy?
Rapid rise in the share of world output accounted for by developing nations such as China and India
The advent of containerization has:
Significantly lowered the costs of shipping goods over long distances.
Automobile companies promote different car in different countries depending on a range of factors such as demographics, local taste, local fuel costs, income levels, congestion, and cultural values. This most likely demonstrates that:
Significiant differences still exist among national markets
In the past two decades, the majority of Latin American countries have:
Sold state owned enterprises to private investors (latin)
Which of the following refers to the total cumulative value of foreign investments?
Stock of foreign direct investment
A concern voiced by critics of globalization is that todays increasingly interdependent global economy shifts economic power toward:
Supranational organizations such as the world trade organization
According to the UN Charter, one of the four purposes of the UN is to:
The UN should Be a center for harmonizing the actions of nations.
Which of the following is a power of the WTO?
The WTO can issue a ruling instructing a member state to change trade policies that violate GATT regulations.
While the lowering of trade barriers made globalizations of markets and production a theoretical possibility, which of the following has made it a tangible reality?
The advances in communication, information processing, and transportation technologies.
Which of the following identifies the motivation for the much of the foreign direct investment by non U.S. Firms?
The desire to disperse production activities and invest to optimal locations.
Gerald bought his son, David, a computer two years ago. Recently, he decided to buy his daughter, Julian, a computer of her own. In the context of the two-year gap between the purchase of both the computers and Moores law
The microprocessor in julian computer will be more advanced in powers then davids.
Which of the following has seen a positive change from 1960 to 2012
The share of the world output enjoyed by rich industrialized counrtries like germany, great britain, and japan
Which of the following conditions is most likely to act as a deterrent for foreign firms willing to do business with former communist nations of East Europe and Central Asia
The signs of growing unrest and totalitarian tendencies seen in these countries.
Why was the world bank set up?
The world bank was set up to promote economic development
By offering the same basic product world wide, firms helps to create a global market (T/F)
True
In a totalitarian country, all the constitutional guarantees on which representative democracies are built—an individual's right to freedom of expression and organization, a free media, and regular elections—are denied to the citizens. (t/f)
True
In general, as countries get richer, they enact tougher environmental and labor regulations (t/f)
True
In practical terms, individualism translates into an advocacy for democratic ideals and free market economics. (t/f)
True
Which of the following was established after the Uruguay Round to police the international trading system?
World Trade Organization (WTO)
In the context of the environment, globalization critics argue that:
adhering to labor and environmental regulations significantly increases the costs of manufacturing enterprises.
All right-wing dictatorships display an affinity toward socialist or communist ideas. (t/f)
false
