Chapter 1 Quiz

True or False: Cultural differences have no effect on the way an international firm conducts its business around the globe.

False

True/False Since the 1960s, a notable trend in the demographics of the multinational enterprise has been the rise of U.S. multinationals.

False

True/False Globalization resulted in a decrease in non-U.S. firms' investment across national borders.

False

True/False A small country is short on cash for much needed infrastructure development projects. It could go to the World Bank for assistance.

True

True/False Supporters of globalization believe that tougher environmental regulations and stricter labor standards are a natural aspect of economic progress.

True

True/False Today, nearly every nation in the world belongs to the United Nations.

True

True/False One concern frequently voiced by those opposed to globalization is that falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies such as the United States and Western Europe.

True

Opponents of globalization argue that falling trade barriers. a. allows firms to move manufacturing activities to countries with lower wage rates b. reduce the pool of global labor c. create manufacturing jobs in wealthy advanced economies d. force countries to maintain manufacturing in their home countries regardless of wage rates

a. allows firms to move manufacturing activities to countries with lower wage rates

An international business is defined as a. any firm that engages in international trade. b. the basis for a multinational enterprise. c. a business that is restricted by U.N. regulations. d. one that implements homogenous practices across countries.

a. any firm that engages in international trade.

Globalization has enabled organizations to reduce their costs of production by a. creating manufacturing units in developing countries. b. turning national economies into self-contained entities. c. differentiating material culture the world over. d. setting up barriers to cross-border trade.

a. creating manufacturing units in developing countries.

Which of the following expresses one of the reasons why managing an international business is different from managing a purely domestic business? a. An international business does not need to contend with government intervention whereas a domestic business must work within the confines of its local government b. An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system c. The range of problems confronted by a manager in a domestic business is wider and the problems more complex than those confronted by a manager in an international business d. International business transactions use the euro instead of the U.S. dollar

b. An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system

Which of the following statements pertaining to changes in the global economy of the 21st century is true? a. Barriers to the free flow of goods, services, and capital have increased. b. The world is moving toward an economic system that is more favorable for international business. c. National economies are becoming more independent. d. Volume of global output has been growing more rapidly than cross-border trade and investment.

b. The world is moving toward an economic system that is more favorable for international business.

The purpose of the U.N.'s Millennium Development Goals that were established in 2000 was to a. legitimize the globalization process b. reduce the number of people living in extreme poverty c. increase the supply of consumer goods to developing countries d. increase the employment rate across all nations

b. reduce the number of people living in extreme poverty

The ________ is often seen as the lender of last resort. a. World Trade Organization b. International Development Association c. International Monetary Fund d. World Bank

c. International Monetary Fund

Foreign direct investment occurs when a firm invests resources in a. production and service technologies that will enhance globalization b. local agricultural production c. business activities out its home country d. competitor-based products

c. business activities outside its home country.

The ________ was created in 1944 by 44 nations that met in Bretton Woods, New Hampshire to promote economic development. a. International Trade Center b. United Nations c. World Trade Organization d. World Bank

d. World Bank

Which of the following factors contributed to the Great Depression of the 1930s? a. artificial fixing of currency rate by China b. problems in the U.S. subprime mortgage lending market c. outsourcing of manufacturing units to developed nations d. countries progressively raising trade barriers against each other

d. countries progressively raising trade barriers against each other

Which of the following actions was implemented in the Uruguay Round, finalized in December 1993? a. extension of the GATT to cover consumer products b. reduction in the protection for patents, trademarks, and copyrights c. enhancement of trade barriers d. establishment of the World Trade Organization

d. establishment of the World Trade Organization

Globalization critics argue that the decline in unskilled wage rates is due to the a. privatization of government owned enterprises b. regulation of the global market by WTO c. technology-induced shift toward skilled jobs d. migration of low-wage manufacturing jobs offshore

d. migration of low-wage manufacturing jobs offshore

The stock of foreign direct investment refers to a. movements of labor, capital, and other factors of production between countries b. total export or import products from other countries c. the entry of funds in a country when foreigners make purchases in the country's stock and bond markets d. the total cumulative value of foreign investments as a percentage of the country's GDP.

d. the total cumulative value of foreign investments as a percentage of the country's GDP.