Chapter 1 Connect

The United Nations was established by ___ countries committed to preserving peace through economic cooperation and trade support.

51

International trade occurs when a firm ___.

Exports goods or services to consumers in another country.

WTO is the successor to ___.

GATT

What is an accurate description of the World Bank?

It focuses on helping developing countries to fight poverty through investments in the underlying structure of the country.

Companies rely on containerization to ___.

Simply the transfer of shipments from one form of transport to another

In terms of transportation technology occurring since the 1950s, the development of ___ has essentially reduced the size of our entire world.

-Commercial Jets -Superfreighters

There have been two notable trends in the demographics of multinational enterprises since the 1960s. These include ___.

-The growth of mini-multinationals -The rise of non-US multinationls

The four facts that describe the demographics of the global economy up until the 1960s.

1. Roughly half of the globe was off-limits to Western international business 2. US dominance in world foreign direct investment 3. US dominance in the world economy and world trade 4. The dominance of large, multinational US firms in the international business scene

During the 1960s, US firms created just over ___ of worldwide foreign direct investment and British firms were second accounting for just over 10%.

65%

We live in an ever-increasing knowledge society. How does the affect international trade?

Consumers know more about goods made worldwide which drives demand for those goods.

IMF and the World Bank are both examples of ___ that help govern the global business system.

Global Institutions

According to the supporters of globalization, falling barriers to international investment

Help to create employment opportunities in countries that participate in the global trading system

Foreign direct investment occurs when a(n)

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

What is an accurate description of the globalization of production?

Locating each stage of production where it can be done most economically

The doubling of the power of microprocessor technology while the costs of its production decreases by half is called ___ Law.

Moore's

As international trade expands, the economies of the world's nation-states are becoming ___.

More intertwined

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

Move production activities to more desirable locations

A(n) ___ is any entity that conducts business in at least two countries.

Multinational Enterprise

Which statement best describes the IMF?

The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil.

What is an accurate description of microprocessors?

They can decode vast amounts of information.

Why would a company engage in the globalization of production?

To lower their overall cost structure

During the 1960s, which country was the predominant world power in terms of foreign direct investment?

United States

Global institutions are needed to

Stabilize and monitor the global marketplace

A country with high ___ has a barrier to international trade.

Tariffs on imports of foreign goods

Advances in information processing and communication are two ways ___ has made the globalization of markets a reality.

Technology

True or False: Containerization made the process of moving goods from one country to another less labor intensive.

True

True or False: IMF was established to ensure the stability of the international monetary system.

True

Which organization verifies that nation-states comply to the rules associated with trade treaties signed by member states?

WTO

Advances in ___ technology make it possible for companies to outsource customer service operations to another country.

Communication

Moore's Law predicts that

Computer power will approximately double every 18 months

Critics of globalization protest in order to

Diminish the impact of the culture of multinational enterprises on the world

The globalization of markets and production implies that

Domestic firms are facing intense competition from foreign firms.

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 productions

True or False: Experts forecast the world trade will continue to decline more rapidly than world production.

False

The ___ was established on 10/24/45. Today, one of its key purposes is to maintain international peace and security.

United Nations

The negotiations called the ___, finalized in December 1993, established the WTO to police the international trading system.

Uruguay Round

When global institutions were introduced in the 1940s, governments in struggling nations would turn to the ___ from low-interest loans needed for infrastructure projects such as building roads.

World Bank

The Uruguay Round negotiations resulted in

Lowering the trade barriers between various national markets.

Early outsourcing efforts were mostly limited to ___ activities while today numerous business activities can be outsourced.

Manufacturing

The globalization of ___ is the term used to describe the merging of national markets into one large global place.

Markets

How did nation-states react to the economic environment of the 1920s and 1930s?

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

The ___ has developed into the information backbone of the global economy and reduced the constraints of location, scale, and time zone.

Internet

It is common practice for people today to use products that are produced or assembled in various nations around the world. This is a reflection of ____.

Globalization

___ refers to the shift toward economic international integration.

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

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

Paragon Corp., based in Ohio, sources goods from Southeast Asia to take advantage of labor cost savings. This company is benefiting from ___.

Globalization of production.

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?

Internet

Land, labor, capital, and energy are all examples of factors of ___.

Production

The development of the microprocessor has

Reduced the cost of global communications

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