Bus5-187 Chapter 1 Quiz
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
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.
Which environmental concern has been found to rise steadily with higher-income levels?
Carbon dioxide emissions.
In terms of conducting international business in China, it can be said that..
China represents a large -- basically untapped -- market.
Supporters of globalization say that critics do not understand that the benefits of free trade outweigh the...
Costs
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.
The doubling of the power of microprocessor technology while the costs of its production decreases by half is called ______ Law.
Moore's
The problems faced while managing an international business are _____ those faced while managing a purely domestic business.
More complex than
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.
International trade occurs when a company...
Exports goods or services to consumers in another country.
Influential economists, politicians, and business leaders who favor globalization argue that...
Falling barriers to international trade drive the economy toward greater prosperity.
What issue might be raised at an anti-globalization demonstration?
Falling barriers to international trade results in job losses in those industries targeted by foreign competitors.
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
The G20 is comprised of ______ from the 19 largest economies in the world.
Finance ministers
Which statement accurately describes the globalization of markets?
National differences in tastes and preferences for consumer products is an important factor that acts as a brake on globalization.
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
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
While studies show 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
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
One of the global institutions that emerged over the past 75 years is GATT which stands for the General Agreement on Tariffs and __________...
Trade.
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
The COVID-19 pandemic caused many businesses to rethink their globalization process because...
Global supply chains were completely shut down during the height of the pandemic.
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
In the early 1990s there were fewer than 50 bilateral and regional trade agreements between two or more nations. This has changed today as there are about...
300
Boeing outsources a large portion of its production. For example, for its most recent jet airliner (the 787), nearly ______ of the total value of the aircraft is outsourced to foreign companies.
65%
During the 1920s and 1930s, when high tariffs were placed on imported manufactured goods,
An increase in trade barriers resulted.
____________ refers to the shift toward economic international integration.
Globalization
Until the COVID-19 pandemic affected the economy, the value of FDI over the last 30 years...
Had grown significantly
Based on current trends, the economy of _____ could ultimately be larger than that of the United States.
China
Which country has been the world's largest exporter since 2009?
China.
Current trends indicate that, due to the emerging economies, the world is moving _____ an economic system that is more favorable for international business.
Closer
The International Monetary Fund (IMF) has been criticized for...
Compromising the jurisdiction and decision-making powers of the receiving country.
During the early years of globalization, outsourcing was primarily confined to ____________________ activities.
Manufacturing
The development of the microprocessor has lead to _____.
A reduction in the cost of global communications
What is an example of a regional trade agreement that has reduced trade barriers between nations?
USMCA
What are three examples of factors of production?
1. Labor 2. Land 3. Capital
Beginning in the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations to developing nations with _________....
Lower Labor Costs
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.
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.
Evidence suggests that _____ has impacted the declining share of national income for unskilled labor more so than globalization has.
Technological change
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
True or false: Small and medium-sized companies do not typically benefit from the globalization of markets.
False
True or False: One outcome of the globalization of markets is a decrease in the intensity of competition among competitors.
False, because the globalization of markets has resulted in increased intensity of competition among companies.
Renata's US-based lifestyle company decides to invest in a company based in France that specializes in health and wellness. This would be an example of...
Foreign Direct Investments
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.
Select the four reasons that explain why managing an international business is different from managing a purely domestic business
1. Countries are different. 2. The range of problems in international business is wider. 3. International business must work within government limits. 4. International transactions involve converting money into different currencies.
What are the two macro factors that underlie the trend toward greater globalization?
1. Decline in trade barriers 2. Technological change
What is an accurate description of microprocesses?
They provide a low-cost way to process large amounts of information.
What are two impediments to globalization that a company might face?
1. transportation costs 2. political risk
Select all that apply: 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?
1.Poor property rights protection 2. Prolonged civil war 3. Totalitarian governments
An IMF study implies that the earnings gap between skilled and unskilled workers has _____ over the past two decades.
Grown by 25%
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.
When describing the value of FDI over the last 30 years, it can be said that...
It has grown significantly.
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.
Which global institution is the successor to GATT?
World Trade Organization
Boeing's rationale for outsourcing so much production to foreign suppliers is based on which two factors, according to the text?
1. Increasing the chance to win significant orders from airlines in those countries. 2. Using suppliers that are the best in the world at a particular activity.
Select the four facts that describe the demographics of the global economy up until the 1960s. (Check all that apply)
1. U.S. dominance in the world economy and world trade 2. Dominance of large, multinational U.S. firms in the international business scene 3. Roughly half of the globe was off-limits to Western international business 4. U.S. dominance in world foreign direct investment
What are the four purposes of the United Nations according to its charter?
1. be a center for harmonizing the actions of nations. 2. develop friendly relations among nations. 3. maintain international peace and security. 4. cooperate in solving international problems.
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?
1. super-freighters 2. commercial jets
There have been two notable trends in the demographics of multinational enterprises since the 1960s. These include _____.
1. the rise of non-U.S. multinationals 2. the growth of mini-multinationals
What are two implications that are derived from the fact that the volume of world trade has been growing faster than world GDP?
1. the world has become significantly wealthier in recent decades. 2. more companies are dispersing production processes to different locations around the globe.
While it is known for its peacekeeping role, the United Nations devotes nearly 70% of its work toward promoting conditions of...
A vibrant global economy.
What is the best description of the globalization of markets?
Bringing traditionally separate national markets into one cohesive marketplace.
Among developing nations, ______ has been the largest recipient of foreign direct investment.
China
At the shipping port in Savannah, Georgia, the large shipping boxes that arrive on the super-freighters 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
What is a challenge faced by companies entering the global market?
Differences in consumer tastes and preferences.
What is an example of an obstacle to globalization?
Differences in legal regulations among national markets.
The globalization of markets and production implies that...
Domestic firms are facing intense competition from foreign firms.
In the years leading up to the Great Depression, what practice created a barrier to international trade?
High tariffs on imports of foreign goods.
The risks of doing business in countries that are facing revolutions is....
Higher than in countries not facing revolutions.
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.
The outward stock of foreign direct investment has _____ for the world as a whole since 1995.
Increased
A company is involved in foreign direct investment when it...
Invests in business activities outside of its home country.
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.
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.
What is an accurate depiction of containerization?
It reduces the costs of shipping goods over long distances.
The purpose of the Uruguay Round negotiations was to...
Lower the trade barriers between various national markets.
Moore's Law predicts that...
Microprocessor technology power will double approximately every 18 months.
From the 1990s until today, foreign direct investment inflows can best be described as...
Surging and Slumping.
While the lowering of barriers to trade made globalization a theoretical possibility, it wasn't until the introduction of _____ that it became a reality.
Technological change
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.
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.
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.
What global institution was established on October 24, 1945 and one of its key purposes is to maintain international peace and security?
United Nations (UN)
Through the 1960s, which country dominated world foreign direct investment?
United States
The trade agreement called the __________, finalized in December 1993, established the World Trade Organization to police the international trading system.
Uruguay Round
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.
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
How did the COVID-19 affect world trade in 2020?
World trade fell off by around 8%
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%.
Due to globalization, firms follow each other around the world, thereby...
Creating some uniformity across markets.
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
Distribution of production to separate locations has become more economical for companies because transportation costs have ________.
Declined
Creating and managing a globally dispersed production system is facilitated by the ______ real costs of information processing and communication.
Decrease in
In return for offering loans, the International Monetary Fund (IMF)...
Enforces its economic policies on nations.
True or False: The International Monetary Fund (IMF) is considered less controversial than the World Bank.
False
When a company invests in a company or entity outside its home country, it is participating in...
Foreign direct investment.
The G20 was originally established to _______________.
Formulate a coordinated policy response to financial crises in developing countries
The ______ has developed into the information backbone of the global economy and reduced the constraints of location, scale, and time zone.
Internet
As international trade expands, the economies of the world's nation-states are becoming ______.
More intertwined.
Based on the fact that the volume of world trade has been growing faster than world GDP implies that the economies of the world's nation-states are becoming...
More intertwined.
By the year 2020, _____________ of the world's population were internet users.
More than 60%
By the year 2018, ____ of the world's population were Internet users.
More than half
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
When nations lowered trade barriers it made the globalization of markets a possibility. What was needed to make this possibility a reality?
Technology
Some U.S. hospitals outsource radiology work to India. This is a recent advancement that is possible because of advancements in __________...
Technology.
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.
Which organization would help out a cash-strapped government with a low-interest loan to help that country build new roads?
The Word Bank
What is the best way to characterize the impact of existing impediments to globalization?
The impediments make it difficult for companies to maximize production activities.
When examining the data from 1960 to 2018, how does the value of the world economy compare to the value of international trade?
The value of international trade had a greater increase.
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
What statement accurately describes the current membership of the United Nations?
Today, nearly every nation in the world belongs to the United Nations.
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
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
True or False: The development of Internet technology has lowered the barriers that small firms face in building international sales.
True, because the rise of the Internet is lowering the barriers faced by small firms in building international sales.