MKT 4550 Chapter 1

As much as 70 percent of its work is devoted to establishing higher standards of living, full employment, and conditions of economic and social progress and development.

UN

Select the four facts that described the demographics of the global economy up until the 1960s

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

Declining trade barriers

Better ability to export goods

Declining investment barriers

Better ability to optimize location economies

The IMF and World Bank were created in 1944 by 44 nations that met to maintain order in the international monetary system and promote economic growth.

Bretton Woods Institutions: IMF and the World Bank

The Changing World Order

China

The Changing World Output and World Trade Picture

Developing countries

The Johnson Automotive Group recently closed two of its US manufacturing facilities and opened a new facility in Asia to take advantage of lower labor costs and savings in energy costs. The company made this change in order to benefit from _____.

Factors of production

A series of treaties that reduced barriers to trade.

GATT

During the 1960s, which country was the predominant world power in terms of foreign direct investment?

United States

Primarily responsible for policing world trading system.

WTO

The Changing Nature of the Multinational Enterprise

Wanda Group

Critics of globalization point out that free trade

allows firms to abuse the weak labor and environmental laws in developing countries.

Enhanced transportation technologies

Lowered distance between countries

The Changing FDI Picture

Toyota

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

While lowering trade barriers initially made global production possible, the advent of technology made globalization a reality.

True

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 will

eliminate manufacturing jobs in wealthy economies.

Influential economists, politicians, and business leaders who favor globalization argue that

falling barriers to international trade drive the economy toward greater prosperity.

The International Monetary Fund and the World Bank are both examples of _____ that help govern the global business system.

global institutions

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

higher than in countries not facing revolutions.

Foreign direct investment occurs when a(n)

investment is made by a company based in one country into a company or entity based in another country.

If you were to describe the global economy of the twenty-first century, it would be accurate to say that

more nations are becoming part of the developed world.

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

move production activities to more desirable locations.

Some demonstrations against globalization are based on the idea that falling barriers to international trade

result in job losses in industries targeted by foreign competitors.

Advances in information processing and communication are two ways _____ has made the globalization of markets a reality.

technology

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-US multinationals

The ______ has developed into the information backbone of the global economy and reduced the constraints of location, scale, and time zone.

Internet

Finance ministers and central bank governors of major economies coordinate policy on global financial crises.

GTO

It is common practice for people today to use products that are produced or assembled in various nations around the world. This is a reflection of _____.

Globalization

Renata is traveling across Europe and is surprised to find Starbucks, McDonald's, and Coca-Cola in nearly every city she visits. This shows a convergence of consumer tastes which creates a _____.

Globalization of markets

Enhanced communication technologies

Growth in e-commerce

Brite-Way Lighting is based in California and sells products within the United States as well as to ten foreign countries. Brite-Way Lighting is an example of a(n) _____ business.

International

The development of the microprocessor has

Reduced the cost of global communications

The decline of the United States standing in industrial power since the 1960s, is considered a relative decline because it is a reflection of

The faster economic growth of other economies

What is an accurate description of microprocessors?

They can decode vast amounts of information.

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

broadened the gap between the rich and poor nations.

Moore's Law predicts that

computer power will approximately double every 18 months.