International Business Midterm Exam (Chapter 1)

____________ is a trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies. A) Globalization B) Internationalization C) Monetization D) Nationalization

A) Globalization

Which of the following was originally created to regulate fixed exchange rates and enforce the rules of the International monetary system? A) International Monetary Fund B) World Trade Organization C) European Union D) World Bank

A) International Monetary Fund

The ________ replaced the institution of GATT while retaining all of the former GATT agreements. A) World Trade Organization B) Federation of International Trade Association C) Commonwealth of Nations D) International Monetary Fund

A) World Trade Organization

Under the WTO agreement, ________. A) a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures B) there is no dispute resolution mechanism except for trade involving environmental products C) countries are allowed to place trade barriers on member countries with no particular justification, because like GATT the WTO has no enforcement mechanism D) tariffs are permitted to be levied by developed countries against developing countries but not against each other

A) a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures

Which of the following refers to the use of computer networks to purchase, sell, or exchange products; service customers; and collaborate with partners? A) e-commerce B) telecommuting C) data virtualization D) virtual hosting

A) e-commerce

The term ________ refers to entities cooperating across national boundaries. A) internationalization B) supranationalism C) denationalization D) multiculturalism

A) internationalization

Most companies today operate in an environment of increased transparency and scrutiny regarding their business activities. This is due to ________. A) the rise of social media B) the prosperity of developing nation C) the heterogeneity in markets D) labor market flexibility in developing nations

A) the rise of social media

________ markets are characterized by newly industrialized and developing countries whose economies have not yet reached the developed status. Often the market and economy are growing and changing due to migration to the cities by rural populations. A) Traditional B) Emerging C) Virtual D) Developed

B) Emerging

________ are all goods and services sold abroad and sent out of a country. A) Net national products B) Exports C) Gross domestic products D) Imports

B) Exports

A special region in which companies can engage in tariff-free importing and exporting is called a(n) ________. A) preferential trade area B) export-processing zone C) customs union D) economic union

B) export-processing zone

Which of the following best defines international business? A) It includes all economic flows between two or more countries. B) It includes all private economic flows between two or more countries. C) It includes all business transactions involving two or more countries. D) It includes all business transactions in countries other than your home country.

C) It includes all business transactions involving two or more countries.

Olive oil prepared in a small Italian oil press factory and sold by large supermarkets in the United States is an example of a ________. A) net national product B) U.S. export C) U.S. import D) gross domestic product

C) U.S. import

The rise of a new international entity called the ________ suggests that any company, regardless of age, experience, and resources, can engage in international business. A) transnational corporation B) multinational corporation C) born global firm D) global firm

C) born global firm

An established consumer market that primarily comprises the middle class and possesses efficient infrastructure is characteristic of ________ markets. A) emerging B) frontier C) developed D) traditional

C) developed

The value of all goods and services produced by a country's domestic and international activities over a defined period of time is the country's ________. A) gross domestic product (GDP) B) gross world product (GWP) C) gross national product (GNP) D) gross state product (GSP)

C) gross national product (GNP)

Trade unions claim that by permitting international firms to continually move to nations with ________, globalization reduces labor's bargaining power and forces overall labor standards lower. A) better factory facilities B) higher resource accessibility C) lower labor standards D) lower labor density

C) lower labor standards

A company/business that invests in/sets up manufacturing subsidiaries abroad in several countries is called a ________. A) dummy corporation B) shell corporation C) multinational corporation D) domestic corporation

C) multinational corporation

Whereas relocating production to low-cost locales traditionally meant production of goods almost exclusively, it increasingly applies to the production of ________. A) domestic products B) perishables C) services D) global brands

C) services

Supporters affirm that globalization ________. A) brings an end to practices like outsourcing B) causes worker dislocation that gradually lowers wages C) tends to increase wealth and efficiency in all countries D) curbs market flexibility in developed nations

C) tends to increase wealth and efficiency in all countries

Which of the following accurately identifies a difference between GATT and the WTO? A) GATT could enforce member compliance with agreements, but the WTO cannot. B) At its inception, GATT had more member nations than the WTO currently has. C) GATT withdrew the most-favored-nation clause, but the WTO reinstated it. D) GATT rules did not cover trade in services, but the rules of the WTO do.

D) GATT rules did not cover trade in services, but the rules of the WTO do.

The ________ is an agency created to provide financing for national economic development efforts. A) Global Financial Markets Association B) World Trade Organization (WTO) C) Financial Stability Board D) World Bank

D) World Bank

Globalization is criticized because it ________. A) does not generate labor market flexibility in developing nations B) prevents developed countries from outsourcing work to developing nations C) creates fewer manufacturing jobs in developing nations D) exploits workers in low-wage nations

D) exploits workers in low-wage nations

Goods and Services purchased from another country (abroad) and brought into one's own country are called __________ . A) gross domestic products B) exports C) gross national products D) imports

D) imports

The purpose of the General Agreement on Tariffs and Trade (GATT) was to ________. A) create an international currency B) regulate exchange rates C) create regional trade organizations D) promote free trade

D) promote free trade

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs indicates ________. A) egalitarianism B) denationalization C) marginal maintenance D) sustainability

D) sustainability

Two major forces that underlie the expansion of globalization are falling barriers to trade and investment, and ________. A) elevation of nationalism B) rise of closed economies C) political stagnation D) technological innovation

D) technological innovation