ECO310 quiz 1 and 2

impediments to globalization

-Formal and informal trade barriers -Barriers to foreign direct investment -Transportation costs -Economic and political risk -Managerial challenge

global institutions

-help manage, regulate, and police the global marketplace -promote the establishment of multinational treaties to govern the global business system

drivers of globalization

1. Declining trade and investment barriers 2. Technological change

What institution was established as a result of the Uruguay Round GATT?

World Trade Organization

globalization

a shift towards more integrated and interdependent word economy two facets: markets and production

a ______________ economy follows the principles of collectivism as resources are allocated based on "the common good"

command economy

what was the motivation for non-US firms to begin investing across national borders in the 1970s?

desire to disperse production activities to optimal locations

Texas-based Cowboy Food Groups has invested resources in business activities in Mexico. What type of business activity does this represent?

foreign direct investment

According to globalization supporters, what is an advantage of globalization?

globalization helps create jobs in all countries that participate in the global trading system

in a pure command economy, the prices at which goods and services are sold are planned by the

government

international monetary fund

maintains order in the international monetary system

international trade

occurs when a firm exports goods or services to consumers in another country

foreign direct investment

occurs when a firm invests resources in business activities outside its home country

globalization of markets

the merging of historically distinct and separate national markets into one huge global marketplace

globalization of production

the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor, energy, land, capital)

Why was the World Trade Organization established?

to police the international trading system