International Business Chapter 1

factors of production

inputs into the productive process of a firm, including labor, management, land, capital, and technological know-how

jet travel.. why important

made the world smaller in the way it reduced time for transportation

single most important technological invention and what it did

microprocessor... sped up computing and made processing info much faster

globalization of markets

moving away from an economic system in which national markets are distinct entities, isolated by trade barriers of distance, time, and culture, and toward a system in which national markets are merging into one global market

International Trade

occurs when a firm exports goods or services to consumers in another country

Moore's Law

the power of microprocessor technology doubles and its cost of production falls in half every 18 months

Stock of Foreign Direct Investment

the total accumulated value of foreign-owned assets at a given time

World Trade Organization (WTO)

thew organization that succeeded the General Agreement on Tariffs and Trade (GATT) as a result of the successful completion of Uruguay round of GATT negotiations

globalization

trend away from distinct national economic units and toward one huge global market

globalization of production

trend by individual firms to disperse parts of their productive process to different locations around the globe to take advantage of differences in cost and quality of factors of production

Protests of Globalization include

us jobs/income labor policies and the environment national sovereignty poor poorer,

worlds most important FDI (6)

US, UK, Germany, Netherlands, France, Japan

Which of the following is a macro factor underlying the trend toward greater globalization? A) Rise of communism across the globe B) Increasing nationalization of private organization C) Increasing diversity in the tastes and preferences of consumers in different nations D) Increasing trade regulations across the globe E) Dramatic developments in recent years in information processing and other technologies

E) Dramatic developments in recent years in information processing and other technologies

containerization

- simplifies transportation of goods ect from one transport to another (quicly, ess labor involved etc) * made transport costs much lower

Multinational Enterprise (MNE)

A firm that owns business operations in more than one country

Which of the following is most likely to be the best suited product for a global market? A) Microprocessors B) Fast food like hamburgers C) Clothes and accessories D) Bank and other personal services E) Household furnishings

A) Microprocessors

Which of the following countries has seen a relative decline in its share of world output between 1960 and 2010? A) The United States B) Thailand C) Japan D) China E) South Korea

A) The United States

Which of the following organizations was established at the 1993 Uruguay Round? A) World Trade Organization B) International Court of Justice C) International Trade Enforcement Agency D) United Nations E) World Bank

A) World Trade Organization

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: A) globalization of production. B) localization of markets. C) increasing differences in tastes and preferences of consumers across the world. D) nationalization of private enterprises. E) rise of communism throughout the globe.

A) globalization of production.

Since 1980, the world's containership fleet has more than quadrupled, reflecting in part the: A) growing volume of international trade. B) decreasing productivity of labor. C) rising costs of containerization. D) increasing transportation costs. E) decreasing employment opportunities across the globe.

A) growing volume of international trade.

International Business

Any firm that engages in international trade or investment

In the present times, many of the former Communist nations of Europe and Asia: A) are closed for Western international businesses. B) are committed to democratic politics. C) are against free market economics. D) have prohibited the use of the Internet by small multinationals. E) have highly developed economies.

B) are committed to democratic politics.

For foreign direct investment (FDI) to occur, a firm should primarily: A) conduct cross-border bartering with neighboring countries. B) invest resources in business activities outside its home country. C) export goods or services to consumers in another country. D) import goods or services from producers in another country. E) erect formidable barriers to international trade.

B) invest resources in business activities outside its home country.

The motive behind the high tariffs imposed by nations on imports of manufactured goods, prior to World War II, was to: A) deter any possible attempts to promote communism. B) protect domestic industries from foreign competition. C) prevent the occurrence of the Great Depression. D) safeguard patents, copyrights, and trademarks. E) promote the trade of services over the trade of manufactured goods.

B) protect domestic industries from foreign competition.

Which of the following falls under the functions of the WTO? A) It can restrict the membership of nations in other supranational organizations such as the United Nations. B) It can grant loans to cash-strapped governments in poor nations. C) It supercedes IMF and has complete authority over IMF's actions. D) It can issue a ruling instructing a member-state to change trade policies that violate GATT regulations. E) It can take decisions related to international trade without considering the collective interests of member-states.

D) It can issue a ruling instructing a member-state to change trade policies that violate GATT regulations.

_____ was the world's most dominant industrial power in the early 1960s. A) India B) Brazil C) Spain D) The United States E) China

D) The United States

The _____ refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors such as labor, energy, land, and capital. A) globalization of markets B) augmentation of products C) amplification of production D) globalization of production E) capitalization of markets

D) globalization of production

Foreign District Investment (FDI)

Direct investment in business operations in a foreign country

Which of the following has been declining in the developing nations of the world such as China, India, Russia, Indonesia, Thailand, South Korea, Mexico, and Brazil A) Economic opportunities for international trade B) Industrialization C) Contribution toward the share of world output D) The stock of foreign direct investment E) Barriers to the free flow of goods, services, and capital

E) Barriers to the free flow of goods, services, and capital

Which of the following reasons contributed to the Great Depression of the 1930s? A) Inability to meet the increasing world demand for products B) Several countries accepting General Agreement on Tariffs and Trade C) Increasing attack from foreign competitors on domestic industries D) Privatization of state-owned organizations E) Countries progressively raising trade barriers against each other

E) Countries progressively raising trade barriers against each other

Which of the following statements is true about the trends in the changing nature of multinational enterprises? A) Global business activity is increasingly being dominated by large U.S. multinational corporations. B) The number of medium-size and small multinationals is decreasing continuously. C) The ranks of the world's largest 100 multinationals are dominated by firms from developing economies. D) The Internet is increasing the barriers that small firms face in building international sales. E) International business is conducted not just by large firms but also by medium-size and small enterprises.

E) International business is conducted not just by large firms but also by medium-size and small enterprises.

G20

Established in 1999, the G20 comprises the finance ministers and central bank governors of the 19 largest economies in the world, plus representatives from the European Union and the European Central Bank.

Beginning in the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations from developing nations to their home countries where labor costs were lower. True False

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 the attack of foreign competitors. True False

False

International Monetary Fund (IMF)

International institution set up to maintain order in the international monetary system

World bank

International institution set up to promote general economic development in the world's poorer nations

General Agreement on Tariffs and Trade (GATT)

International treaty that committed signatories to lowering barriers to the free flow of goods across national boarders and led to WTO

The World Trade Organization, the International Monetary Fund and its sister institution the World Bank, and the United Nations were all created by voluntary agreement between individual nation-states. True False

True

Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country. True False

True

United Nations

an international organization made up of 193 countries headquartered in NYC, formed in 1945 to promote peace, security, and cooperation