International Business Chp 1
What are the two macro factors that underlie the trend toward greater globalization?
technological change & decline in trade barriers
The text notes that there are two macro factors fueling the trend toward greater globalization. These two factors focus on a decline in trade barriers and
technological change.
True or False: The International Monetary Fund (IMF) is considered less controversial than the World Bank.
False
True or False: While there are a large number of nations that are members of the WTO, these nations account for only a small portion of world trade.
False
True or false: Small and medium-sized companies do not typically benefit from the globalization of markets
False
The development of what two transportation modes has effectively reduced the size of our world, hence simplifying the transshipment from one mode of transport to another?
Superfreighters & commercial jets
The globalization of markets and production implies that
domestic firms are facing intense competition from foreign firms.
As international trade expands, the economies of the world's nation-states are becoming ______.
more intertwined
By the year 2018, ____ of the world's population were Internet users.
more than half
What is an accurate description of the International Monetary Fund (IMF)?
The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil.
What statement accurately describes the current membership of the United Nations?
Today, nearly every nation in the world belongs to the United Nations.
One of the global institutions that emerged over the past 75 years is GATT which stands for the General Agreement on Tariffs and _____.
Trade
A small country is short on cash for much needed infrastructure development projects. It could go to the World Bank for assistance.
True
Today, nearly every nation in the world belongs to the United Nations.
True
What global institution was established on October 24, 1945 and one of its key purposes is to maintain international peace and security?
United Nations
The ________ was created in 1944 by 44 nations that met in Bretton Woods, New Hampshire to promote economic development.
World Bank
Which organization would help out a cash-strapped government with a low-interest loan to help that country build new roads?
World Bank
Which global institution is the successor to GATT?
World Trade Organization
Which organization is responsible for policing the rules of trade between nations and making sure countries adhere to the rules of trade treaties signed by member states?
World Trade Organization
The development of the microprocessor has lead to _____.
a reduction in the cost of global communications
Moore's Law predicts that
microprocessor technology power will double approximately every 18 months.
Which country has been the world's largest exporter since 2009?
China
In the 1960s, when a customer in the United States purchased a television, that television had been manufactured in the United States. Today, thanks to the fall of international trade barriers, televisions purchased in the United States might be manufactured in China or South Korea. This change has occurred as the result of _____.
Globalization
______ refers to the shift toward economic international integration.
Globalization
In the years leading up to the Great Depression, what practice created a barrier to international trade?
High tariffs on imports of foreign goods
What is an accurate depiction of containerization?
It reduces the costs of shipping goods over long distances.
What are three examples of factors of production?
Land, Labor, Capital
Which of the following statements pertaining to changes in the global economy of the 21st century is true?
The world is moving toward an economic system that is more favorable for international business.
What is an accurate description of microprocessors?
They can decode vast amounts of information.
Why do companies engage in the globalization of production?
To lower their overall cost structure or improve the quality of their product offering
An international business is defined as
any firm that engages in international trade.
What is the best description of the globalization of markets?
bringing traditionally separate national markets into one cohesive marketplace
Foreign direct investment occurs when a firm invests resources in
business activities outside its home country.
At the shipping port in Charleston, South Carolina, the large shipping boxes that arrive on superfreighters from Indonesia are unloaded directly onto a train car for transport within the United States. This demonstrates how _____ has simplified the transport of products from one mode of shipping to another.
contanierization
When a company invests in a company or entity outside its home country, it is participating in
foreign direct investment
Mallory's US-based lifestyle company decides to invest in an Italian company that specializes in health and wellness. This would be an example of
foreign direct investment.
The national differences in the quality of factors of production help companies
improve the quality or functionality of their product offering.
The globalization of markets is facilitated by the
improvement in transportation technology.
A company is involved in foreign direct investment when it
invests in business activities outside of its home country.
Historically, national markets were distinct and separate entities. Today, these separate national markets have merged. This process is known as _____.
the globalization of markets
Company ABC, based in Tennessee, sources goods from Southeast Asia to take advantage of labor cost savings. This is an example of _____.
the globalization of production
Since World War II, globalization has been driven by two major factors: the decline in barriers to the free flow of goods, services, and capital, and technological change. Business has fueled these trends and has been the beneficiary of these trends. Understanding globalization trends helps businesses identify opportunities and threats in their environment. Understanding these trends will also make the changes much more manageable. International businesses have greater flexibility, more options, and a broader scope to consider globalization of production and globalization of markets.
Declining trade barriers - better ability to export goods Declining investment barriers- better ability to optimize location economies Enhanced communication technologies - growth in e-commerce Enhanced transportation technologies - lowered distance between countries
Globalization resulted in a decrease in non-U.S. firms' investment across national borders.
False
The ________ is often seen as the lender of last resort.
International Monetary Fund
The ______ has developed into the information backbone of the global economy and reduced the constraints of location, scale, and time zone.
Internet
What is an accurate depiction of the World Bank?
It focuses on helping developing countries fight poverty through investments in the underlying structure of the country.
The doubling of the power of microprocessor technology while the costs of its production decreases by half is called ______ Law.
Moore's
Opponents of globalization argue that falling trade barriers
allow firms to move manufacturing activities to countries with lower wage rates.
During the 1920s and 1930s, when high tariffs were placed on imported manufactured goods,
an increase in trade barriers resulted.
Which of the following actions was implemented in the Uruguay Round, finalized in December 1993?
establishment of the World Trade Organization
International trade occurs when a company
exports goods or services to consumers in another country.
