MGMT 425 - Exam 1

At some point, rising income levels lead to demands for greater environmental protection and, as a result, pollution levels fall. A study by Grossman and Krueger found this generally occurred before per capita income levels reached

$8,000.

In terms of conducting international business in China, it can be said that

China represents a large -- basically untapped -- market.

four reasons that explain why managing an international business is different from managing a purely domestic business.

International transactions involve converting money into different currencies., Countries are different., International business must work within government limits., The range of problems in international business is wider.

Which argument favors globalization?

Lowering international trade barriers raises the incomes of consumers.

Which statement accurately describe the global economy in the twenty-first century?

More nations are becoming part of the developed world.

four facts that describe the demographics of the global economy up until the 1960s.

Roughly half of the globe was off-limits to Western international business, U.S. dominance in the world economy and world trade, Dominance of large, multinational U.S. firms in the international business scene, U.S. dominance in world foreign direct investment

Through the 1960s, which country dominated world foreign direct investment?

U.S.

Distribution of production to separate locations has become more economical for companies because transportation costs have _____.

declined

the growth of trade as a percentage of global GDP reflects...

the globalization of markets

The series of democratic revolutions that swept the communist world, led to the downfall of the Soviet Union, and opened markets in other nations occurred around _____.

1990

What is one concern voiced by critics of globalization?

An interdependent global economy shifts economic power away from national governments and toward organizations such as the United Nations.

The presence of McDonald's in Tokyo, the opportunity to easily buy iPads in Rio and Berlin, and the ready availability of Gap jeans in Paris as well as San Francisco are examples of

the emergence of global markets for consumer products.

Which environmental concern has been found to rise steadily with higher-income levels?

Carbon dioxide emissions

Among developing nations, ______ has been the largest recipient of foreign direct investment.

China

Based on current trends, the economy of _____ could ultimately be larger than that of the United States

China

What issue might be raised at an antiglobalization demonstration?

Falling barriers to international trade results in job losses in those industries targeted by foreign competitors.

What is an accurate description of Ralph Nader's view of supranational organizations such as the World Trade Organization?

Nader believes these organizations run counter to the basis of democracy.

What is an accurate description of microprocessors?

They can decode vast amounts of information.

The text lists several reasons that stand out as the cause for economic stagnation in the world's poorest countries, including which three of the following?

Totalitarian governments, Poor property rights protection, Prolonged civil war

True or False: As emerging economies such as China, India, Russia, and Brazil continue to grow, forecasts predict a further relative decline in the share of world output and world exports accounted for by the U.S. and other long-established developed nations.

True

True or False: Supporters of globalization argue that bodies such as the World Trade Organization and the United Nations exist to serve the collective interests of member states, not to subvert those interests.

True

True or False: The development of Internet technology has lowered the barriers that small firms face in building international sales.

True

True or false: Many economists maintain that the power of organizations like the WTO is limited to what nation-states collectively agree to grant.

True

True or false: Technological innovations and low-cost transportation have reduced the cultural distance between countries and are bringing about some convergence of consumer tastes and preferences.

True

What is an accurate depiction of Latin America when considering international business?

While favorable economic trends have recently occurred, there is no guarantee that they will continue.

the commercial jet aircraft market can best be described as

a global market

Those who promote the idea of free trade say that one way for the world's poorest countries to improve their situation is to _____.

adopt economic policies based on free market economies

It is suggested by economists that the richest nations of the world can help struggling nations by reducing trade barriers especially for _____ imports.

agricultural

While U.S. firms accounted for about two-thirds of foreign direct investment in the 1960s, as of 2019, U.S. firms account for _____.

around 28%

Declining trade barriers provide?

better ability to export goods

Declining investment barriers provide?

better ability to optimize location economies

Current trends indicate that, due to the emerging economies, the world is moving _____ an economic system that is more favorable for international business.

closer to

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.

containerization

Supporters of globalization say that critics do not understand that the benefits of free trade outweigh the

costs.

In order to manage an international business efficiently, managers might have to

decide if it is ethical to accept the lower labor and environmental standards found in many less developed nations.

As figures for 2019 reflect, the globalization of the world economy has resulted in a relative _____ in the dominance of U.S. firms in the global marketplace.

decline

Boeing's 787 aircraft is produced by 50 suppliers spread around the world, a huge increase in global outsourcing as compared to the past. Boeing's strategy, like that of other multinational companies, suggest that..

declining barriers to trade and investment are facilitating global production strategies

Creating and managing a globally dispersed production system is facilitated by the ______ real costs of information processing and communication.

decrease in

Opponents of globalization are concerned that manufacturing jobs will be moved to more _____ countries.

developing

Critics of globalization protest in order to

diminish the impact of the culture of multinational enterprises on the world.

The opponents of globalization argue that falling barriers to international trade

eliminate manufacturing jobs in wealthy economies.

Colin told the management team that their Ohio-based company should produce the textiles for the new line of jackets in China because it would allow them to price the clothing line lower, which would then give consumers more money to spend on other items. Colin is making an argument for ______.

free trade

Boeing produced just 5 percent of its original 737 and 747 outside the U.S. but produces 65 percent of its newer 787 in foreign locations. Boeing's production strategy reflects the

globalization of production

An IMF study implies that the earnings gap between skilled and unskilled workers has _____ over the past two decades.

grown by 25%

Enhanced communication technologies provide?

growth in e-commerce

The risks of doing business in countries that are facing revolutions is

higher than in countries not facing revolutions.

The globalization of markets is facilitated by the

improvement in transportation technology

The outward stock of foreign direct investment has _____ for the world as a whole since 1995.

increased

A(n) ______ business is any firm that engages in cross-border trade or investment.

international

Michael works at a lawnmower manufacturing company in St. Louis, Missouri, and his company imports component parts from Thailand and also ships final product to various countries. Michael's company is an example of a(n) _____ business.

international

A manager in a(n) ______ business faces a wider and more complex range of problems than one in a(n) ______ business.

international; domestic

A debt relief movement was in full force in the late 1990s; however, in order for these programs to have a long-term impact it is necessary for those nations receiving debt assistance to

invest in public projects that boost economic growth.

In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S. position compare today?

it has diminished in power

Those who support globalization argue that increasing globalization will

lead to reduced prices for goods and services.

Beginning in the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations to developing nations with _____.

lower labor costs

Enhanced transportation technologies provide?

lowered distance between countries

Moore's Law predicts that

microprocessor technology power will double approximately every 18 months.

The problems faced while managing an international business are _____ those faced while managing a purely domestic business.

more complex than

As international trade expands, the economies of the world's nation-states are becoming ______

more intertwined

As the barriers to the free flow of goods, services, and capital fell during the 1970s, one motivation for foreign direct investment by non-U.S. firms was the desire to

move production activities to more desirable locations.

A(n) ______ is any business that has productive activities in two or more countries.

multinational enterprise

The decline of the United States' standing as a dominant industrial power is considered a(n) _____ decline because it reflects the faster economic growth of other economies.

relative

The number of mini-multinationals involved in international trade and investment is ________.

rising

From the 1990s until today, foreign direct investment inflows can best be described as

surging and slumping.

Evidence suggests that _____ has impacted the declining share of national income for unskilled labor more so than globalization has.

technological change

There have been two notable trends in the demographics of multinational enterprises since the 1960s. These include _____.

the growth of mini-multinationals, the rise of non-U.S. multinationals

In terms of economic growth, current indicators suggest that

there will be stagnation among the world's poorest nations.

Supporters of globalization suggest that a solution to the problem of slow real income growth among unskilled workers is _____ society's investment in education.

to increase

The outward stock of foreign direct investment refers to the ______ of foreign investments by firms domiciled in a nation outside of that nation's borders.

total cumulative value

While studies shw that the share of labor in national income has declined over the past two decades, experts caution that in reality the decline has only affected

unskilled labor.

According to the critics of globalization, increased free trade and investment over the past few decades have

widened the gap between the rich and poor nations.