Chapter 4 TB questions

Although many firms conduct business across national boundaries, most global commerce is carried out by a small number of powerful firms.

True

Even small local businesses often compete with global companies from around the world.

True

The importing of foreign goods by U.S. firms is called foreign direct investment.

False

A society where economic power is concentrated in the hands of government officials and political authorities is called: A. A central state control system. B. A social democracy. C. A political control system. D. A military dictatorship.

A. A central state control system.

The primary purpose of the International Monetary Fund is to: A. Lend foreign currency to member countries. B. Exchange one currency for another. C. Consolidate the debt facing third world nations. D. Collect the interest on loans made by the World Bank to third-world nations.

A. Lend foreign currency to member countries.

A critic of globalization might argue that companies decide to manufacture in China mainly because of China's: A. Strict law enforcement. B. High environmental standards. C. Weak health and safety regulations. D. Strong worker unions.

C. Weak health and safety regulations.

Assets that a person accumulates and owns at a certain point in time are called: A. Income. B. Equity. C. Wealth. D. Microfinance.

C. Wealth

According to the United Nations, a feature of democracy is: A. Fair elections. B. An independent media. C. A government with power balanced among executive, legislative, and judicial branches. D. All of the above.

D. All of the above.

An example of an international financial and trade institution is: A. World Bank. B. International Monetary Fund. C. World Trade Organization. D. All of the above.

D. All of the above.

Globalization is accepted worldwide and creates little controversy.

False

According to the United Nations, how many transnational corporations operate in the global economy? A. 49,000. B. 104,000. C. 290,000. D. 900,000.

B. 104,000.

Under the World Trade Organization's most-favored nation rule: A. All import restrictions imposed by other nations on their goods are illegal unless a cultural waiver is issued. B. All import restrictions are illegal unless proven scientifically. C. Most-favored nations can impose heavy tariffs on other nations. D. Most-favored nations can oppose the dumping of goods by any nation in their home market.

B. All import restrictions are illegal unless proven scientifically.

The World Bank makes currency exchange easier for member countries so that they can participate in global trade.

False

Single-party rule by communist parties still remains in: A. Lithuania. B. Vietnam. C. Thailand. D. Russia.

B. Vietnam.

Global market channels involve a firm producing goods in: A. Their home country and exporting them to other countries. B. Their home country to sell at home. C. A foreign country to sell at home. D. A foreign country to sell abroad.

A. Their home country and exporting them to other countries.

The Heritage Foundation scored which nation of the world among the most repressed in 2012? A. Hong Kong. B. Australia. C. North Korea. D. Singapore.

C. North Korea.

An example of a Global Action Network, or GAN, is: A. The World Trade Organization. B. Nongovernmental organizations. C. The Kimberley Process. D. The Heritage Foundation.

C. The Kimberley Process.

The percentage of global wealth concentrated at the Bottom of the Pyramid is: A. 8 percent. B. 22 percent. C. 60 percent. D. 70 percent.

D. 70 percent.

The World Trade Organization conducts negotiations, called "cycles," on various topics, rotating its meetings among different cities.

False

The term sector refers to broad divisions of a whole.

True

The main purpose of inversion is to reduce corporate income tax obligations.

True

Which statement(s) below are true about global income? A. Income is how much one earns in a day or a year. B. Income at the bottom of the pyramid varies from place to place. C. Around 400 billion people globally sit at the bottom of the pyramid. D. Both A and B, but not C.

D. Both A and B, but not C.

The primary goal of a "vulture fund" is to: A. Provide countries with debt-relief. B. Pay back loans in default. C. Increase global financial stability. D. Make a profit.

D. Make a profit.

A firm that has global operations has: A. All of their manufacturing and service operations abroad. B. Some or all of their manufacturing or service operations abroad. C. Manufacturing but not service operations abroad. D. Service but not manufacturing operations abroad.

B. Some or all of their manufacturing or service operations abroad.

Experts attribute the growth of nongovernmental organizations to: A. The creation of global stock exchanges and enhanced currency transactions. B. The globalization of marketing and converging consumer preferences. C. Greater openness in many societies. D. All of the above.

C. Greater openness in many societies.

Government has distinctive resources and competencies including: A. Knowledge of public policy. B. Ability to enforce the rules. C. Revenue from taxation. D. All of the above.

D. All of the above.

Globalization directly and indirectly influences the politics, environment, geopolitics, and economics of virtually every country in the world.

True

Productivity rises more quickly when countries produce goods and services for which they have a natural talent.

True

The three strategies of globalization can be summarized using what three words? A. Channels, operations, and chains. B. Export, locate, and purchase. C. Sell, make, and buy. D. Ethics, import, and sell.

C. Sell, make, and buy.

The theory of comparative advantage states that: A. Productivity rises more quickly when countries produce goods and services for which they have a natural talent. B. Productivity decreases when countries produce goods and services based on their natural resources. C. All countries start out on an equal playing field. D. Countries that operate under a policy of isolationism have a comparative advantage.

A. Productivity rises more quickly when countries produce goods and services for which they have a natural talent.

Microfinance refers to: A. Banks lending money to a very small number of businesses. B. Banks lending money to low-income businesses. C. Banks lending very small amounts of money to wealthy businesses. D. Banks charging low fees for all business loans.

B. Banks lending money to low-income businesses.

The purpose of the World Trade Organization is to: A. Impose barriers to free trade among nations. B. Eliminate barriers to free trade among nations. C. Develop trading partnerships between rich and poor nations. D. Decrease globalization and free trade.

B. Eliminate barriers to free trade among nations.

The term "race to the bottom" refers to: A. Seeking to mine valuable minerals from the bottom of the ocean. B. Moving production jobs to the country with the lowest labor cost. C. Efforts to deconstruct the assembly process in manufacturing industries. D. An old concept of globalization that is no longer relevant.

B. Moving production jobs to the country with the lowest labor cost.

A free enterprise system refers to: A. Economic assets that are privately owned and exchanged in an open market. B. Property ownership by a centralized government. C. A mix of privately owned and government controlled economic assets. D. An index of economic freedom.

B. Property ownership by a centralized government.

Representation on the World Bank's board of directors is based on: A. The size of the member nation's population. B. The size of the member nation's economy. C. The size of the member nation's land mass. D. Equal representation of all member nations.

B. The size of the member nation's economy.

A firm that would like to develop a global supply chain would: A. Manufacture components or supplies in other countries. B. Sell raw materials, components or supplies produced at home abroad. C. Purchase raw materials, components, or supplies from sellers in other countries. D. Check products that were manufactured abroad for defects in their home country.

C. Purchase raw materials, components, or supplies from sellers in other countries.

The most important agreement which codifies human rights is the: A. The American Civil Liberties Act. B. The Versailles Treaty. C. The Universal Declaration of Human Rights. D. The U.S. Declaration of Independence.

C. The Universal Declaration of Human Rights.

What U.S. company is the best example of using globalization to reduce the price of its products? A. K-Mart. B. Toys R Us. C. Walmart. D. Macy's.

C. Walmart.

An individual who is a supporter of globalization would argue that it helps the developing world by: A. Giving entrepreneurs access to foreign investment funds to support economic development. B. Allowing new ideas and technological innovations to spread quickly. C. Providing people in developing countries with more jobs. D. All of the above.

D. All of the above.

Which of the following statements accurately describe the practice of tax inversion? A. A company shifts their headquarters to a foreign country. B. A company decreases cash holdings in a foreign country. C. A company increases debt in their home country. D. Both A and C, but not B.

D. Both A and C, but not B.

Under the World Trade Organization's most favored nation rule, member countries may not discriminate against foreign products for any reason.

True