ib midterm questions

A political system includes all of the following EXCEPT​ ________.

A. the structures by which a nation governs itself B. the processes by which a nation governs itself C. the laws by which a nation governs itself *D. the language by which a nation governs itself* E. the activities by which a nation governs itself

Critics of the WTO and the IMF role believe that these global​ organizations' policies cause the erosion of​ ________.

the ability of governments to have control over their own economics and societies

iplc: 2. maturing product stage

the domestic market and markets abroad become fully aware of the existence of the product and its benefits

iplc: 1. the new product stage

the high purchasing power and demand of buyers in an industrialized country drive a company to design and introduce a new product concept

According to​ ________, as a company increases the extent to which it specializes in the production of a particular​ good, output rises because of gains in efficiency

the new trade theory

​________ is the study of how a country manages its affairs by using its​ political, economic, and legal systems.

political economy

Which of the following is the likelihood that a society will undergo political change that negatively affects local business​ activity?

political risk

Which of the following is NOT a characteristic of a market​ economy?

price setting

Companies that sell global products can reduce costs by​ ________.

standardizing certain marketing activities

Some allege​ that, when a manufacturing job is lost in a wealthy​ nation, the new job pays less than the previous one. As a result those opposed to globalization say this decreases all of the following EXCEPT​ ________.

*A. fear* B. job security C. trade barriers D. employee morale E. employee loyalty

Global products and global competition characterize many industries and​ markets, including all of the following EXCEPT​ ________.

*A. environmentally harmful products* B. consumer goods C. semiconductors D. aircraft E. automobiles

Innovations that have had a considerable impact on globalization include all of the following EXCEPT​ ________.

*A. increasing the number of intermediaries* B. ​e-mail C. intranets D. the Internet E. videoconferencing

Some say that globalization erodes national sovereignty. National sovereignty does not mean that a​ nation-state ________.

A. cannot intervene in the affairs of other nations B. is autonomous *C. cannot enter into binding international agreements* D. can freely select its government E. can control movements across its borders

The main aspects of the debate about inequality include all EXCEPT​ ________

. A. inequality within nations *B. gender inequality* C. global inequality D. worldwide inequality E. inequality between nations

Governments intervene in international trade for the following reasons EXCEPT​ ________.

. A. protecting national identity B. protecting jobs *C. promoting free trade* D. protecting national security E. protecting infant industries

What forces underlie the globalization of markets and​ production?

. Falling barriers to trade and investment and technological innovation

Which of the following is NOT an argument in the debate over​ globalization's influence on​ culture?

A. Deeper values that embody the essence of cultures are resistant to a global consumer culture. B. Local values and traditions are being replaced by U.S. companies promoting​ "Western" values. C. Global​ consumer-goods companies destroy cultural diversity by putting local companies out of business. *D. A poor marketing effort can cause great products to fade into obscurity.* E. Globalization fosters two important​ values: tolerance and diversity.

Which of the following is NOT stated by the new trade​ theory?

A. Government may play a role in assisting its home companies. B. The companies first to market can create barriers to entry. *C. Government should play no role in assisting home companies.* D. There are gains to be made from increasing economies of scale. E. There are gains to be made from specialization.

Which of the following is NOT a method of managing political​ risk?

A. Information gathering B. Partnerships *C. Conducting market research* D. Adaptation E. Political influence

Which of the following is NOT an instrument of trade​ restriction?

A. Local content requirements B. Administrative delays C. Currency controls *D. Special government agencies* E. Embargoes

A government may nationalize an industry to do all EXCEPT​ ________

A. use subsidies to protect an industry for ideological reasons B. invest in​ sectors, such as public​ utilities, that private companies cannot afford C. control industry profits so they cannot be transferred to low​ tax-rate countries *D. encourage globalization* E. save local jobs in an ailing industry to gain political clout

Which of the following can best describe born global​ firms?

A. Companies that employ thousands of workers B. Import firms C. Multinational corporations D. Custom brokers *E. Companies that adopt a global perspective and engages in international business from the start*

Which of the following is NOT a benefit that companies obtain from the globalization of​ production?

A. Technical expertise B. Low-cost labor C. Raw materials D. Production inputs *E. High-cost labor*

A born global​ firm, a company that adopts a global perspective and engages in international business from​ inception, does NOT​ ________.

A. sell traditional products and benefit from technology B. become international competitors in less than three​ years' time. *C. wait at least a year before exporting products and expanding operations globally* D. tend to have an innovative culture and​ knowledge-based organizational capabilities E. use electronic distribution for digitized products

Which of following options helps companies reduce costs when they sell consumer goods​ globally?

A.Hiring international staff to have better control and operate more efficiently B.Receiving payment in U.S. dollars only *C.Standardizing certain marketing activities* D.Outsourcing most of their business E.Considering foreign direct investment

In​ _________, the government makes nearly all​ economy-related decisionslong dash—including who produces what and what the prices of​ products, labor, and capital will be

Centrally planned economy

Which of the following is NOT an ethical issue facing international​ companies?

Changing a​ nation's political system

The international product life cycle theory follows the path of a good through its life cycle in order to determine where it will be produced. Which of the following BEST defines the standardized product​ stage?

Competition pressures companies to lower prices in order to maintain sales levels.

Which of the following BEST describes an emerging​ economy?

Developed some​ (but not​ all) of their operations and export capabilities

Which of the following statements supports the opponents of​ globalization's viewpoint on its effect on​ income? Globalization increases income inequality among people within nations

Freer trade and investment allows international companies to close factories in​ high-wage, developed nations and cause income inequality

Which of the following is a treaty designed to promote free trade by reducing tariffs and nontariff barriers to international​ trade?

GATT

Which of the following was NOT a benefit of the General Agreement on Tariffs and Trade​ (​GATT)?

GATT defined protection of intellectual property rights. B. GATT reduced average tariffs on merchandise trade. *C. GATT covered trade in services.* D. GATT lowered subsidies for agricultural products. E. GATT significantly improved the climate for trade

What is the name given to the trend toward greater​ economic, cultural,​ political, and technological interdependence among national institutions and​ economies?

Globalization

India became attractive as a location for​ software-writing operations because of its​ low-cost, well-trained,​ English-speaking technicians. What is this an example​ of?

Globalization advancing developing​ nations' economies

What is any commercial transaction that crosses the borders of two or more​ nations?

International business

What are the benefits of doing business in a totalitarian​ nation?

International companies can be relatively less concerned with local political opposition to their activities.

Which of the following is the main issue raised by critics of​ globalization?

It eliminates jobs and lowers wages in developed nations

What is the major flaw of the original​ GATT, which led to the creation of the​ WTO?

Lacked the power to enforce world trade rules

Which of the following is claimed by supporters of​ globalization?

Openness of international trade increases​ production, wealth, and efficiency

What is the name for the selling of​ government-owned economic resources to private​ operators?

Privatization

When IBM USA sources computer materials from different locations around the world to reduce the cost of​ production, this is called​ ________.

globalization of production

Which of the following BEST describes the ideology of a centrally planned​ economy?

achieving economic equality

Opponents of globalization argue that freer trade and​ companies' continuous tendency to reduce costs has led companies to move into lower wage cost locations. This has resulted in​ ________

an increase in the wage gap between​ white-collar and​ blue-collar occupations in rich nations

Political economies of nations differ in the degree of​ openness, individualism,​ equality, transparency, and flexibility. Which of the following political economic systems stresses the primacy of the group over individual​ needs?

collectivism

iplc: 3. standardized product stage

competition from other companies selling similar products pressures companies to lower prices in order to maintain sales levels

The term​ ________ refers to an increase in the economic​ well-being, quality of​ life, and general welfare of a​ nation's people

economic development

The new trade theory states that​ companies' specialization and output increase because of gains in efficiency that lowers the unit cost of production. This is a benefit from​ ________.

economies of scale

Which of the following is NOT part of the World Trade​ Organization's (WTOs)​ mandate?

environmental protection

Multinational corporations do NOT​ ________.

few employees

Arguments against globalization state that​ ________.

gains to national economies are not worth the lost livelihoods of individuals

Arguments in favor of globalization state that​ ________.

globalization increases wealth and efficiency in both developed and developing nations

Globalization supporters argue that developing countries can boost incomes for its poorest citizens and reduce income inequality by​ ________.

integrating into the global economy

The main sources of political risk do NOT include​ ________.

international content requirements

​________ says that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle

international product life cycle theory

​Globalization's detractors say that​ ________

it homogenizes our world and destroys its rich diversity of cultures

Innovation in the shipping industry is helping globalize markets and production by​ ________.

making shipping more efficient and dependable

A​ nation's ability to enter into binding international agreements is referred to as having​ ________

national sovereignty

Why are embargoes rarely used​ today?

they are difficult to enforce

If we compare average incomes in​ high-income countries with average incomes in​ middle- and​ low-income nations, we find a​ ________ gap

widening