GDB Midterm Exam Ch 1-2

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

1. Poor property rights protection 2. Prolonged civil war 3. Totalitarian government

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 world foreign direct investment 2. Roughly half of the globe was off-limits to Western international business 3. Dominance of large, multinational U.S. firms in the international business scene 4. U.S. dominance in the world economy and world trade

What are the three broad types of economic systems?

1. command economy 2. mixed economy 3. market economy

What three systems make up the political economy of a country?

1. legal system 2. economic system 3. political system

The development of what two transportation modes has efficiently reduced the size of our world hence simplify the transshipment from one mode of transport to another?

1. superfreighters 2. commercial jets

If you were asked to provide a fact about a common law system, what should you say?

A common law system has a degree of flexibility that other legal systems lack.

What condition must be present to create an ideal representative democracy?

A nonpolitical state bureaucracy

What is the objective of a pure command economy?

Allotment of resources for the overall good of society

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

increased

Michael wrote a screenplay and he is traveling to Los Angeles next week to pitch his idea to a movie studio. The screenplay is an example of _____ property.

intellectual

Michael works at a lawnmower manufacturing company in St. Louis, Missouri, and his company imports components parts from Thailand and also ships final product to various countries. Michaelś 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

When describing the value of FDI over the last 30 years, it can be said that

it has grown significantly.

Those who support globalization argue that increasing globalization will

lead to reduced prices for goods and services

Antitrust laws are put into place in a market economy in order to

limit monopolies.

In a pure ______ economy, all productive activities are owned privately -- not by the state.

market

Mooreś Law predicts that

microprocessor technology power will double approximately every 18 months.

In a ______ economy, both private enterprise and some state monopoly co-exist.

mixed

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

more complex than

By the year 2018, ___ of the worldś population were Internet users.

more than half

The system of government in a nation is called the ______ system.

political

Collectivism refers to a political system that

restricts an individual's right to do something on the grounds that it runs counter to the "good of society"

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

Compared to contracts drafted in a common law system, contracts in a civil law system

tend to be much shorter and less specific.

The presence of McDonaldś 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.

What does individualism emphasize?

the importance of guaranteeing one's freedom and self-expression

In a pure market economy, production of goods is determined by

the interaction of supply and demand.

In a totalitarian country, you would find that

the ruler's decisions are not questioned by individuals.

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

total cumulative value

On the democracy and totalitarianism continuum, ___ represents the form of government in which one political party exerts absolute control over all spheres of human life.

totalitarianism

A(n) ______ is a recognizable sign, design or name, often officially registered, that identifies products or services from a particular source.

trademark

To guarantee that elected representatives can be held accountable for their actions by the electorate, an ideal representative democracy has a number of safeguards. What is one of those safeguards?

universal adult suffrage

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

widened the gap between the rich and the poor nations.

There has 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.

Property rights violation that occurs through theft or piracy is an example of _____ action.

private

As used in the text, the term ______ refers to a resource that an individual or business legally owns.

property

Under a(n) _____, authoritarian elements are used to attempt to deny basic political and civil liberties to individuals.

pseudo-democracy

High levels of corruption tend to affect a nation by

reducing foreign direct investment.

A country that is ruled based on theocratic totalitarianism is governed based on

religious principles.

In a(n) ______ democracy, elected representatives represent the citizens and make decisions on behalf of the electorate.

representative

The CISG establishes rules that govern contracts specifically between

sellers and buyers who have companies in different nations.

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

technological change

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

China represents a large -- basically untapped -- market

True or false: To date, all major trading nations have accepted the United Nations Convention on Contracts for the International Sale of Goods.

False

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

Internet

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

It has diminished in power.

What is one way high levels of corruption affect a country?

It reduces the return on investment of a business.

Which one of these individuals should apply for a copyright?

Jude, a musician who is composing his maiden album

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 example of facilitating payment under U.S. law and the Organization for Economic Cooperation and Development (OECD) convention?

Payments that are made for the purpose of speeding up the issuance of a driver's license.

What is a difference between the contracts drafted in a common law framework and those in a civil law system?

Resolving contract disputes in a common law system tends to be more adversarial than in civil law systems.

Which of the following statements about political systems is TRUE?

Typically, political systems that place a high emphasis on individualism tend to be democratic.

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

United States

Which statement accurately describes a civil law system?

Unlike a common law system, a civil law system relies on detailed codes, and therefore, can be less adversarial.

The development of microprocessor has lead to ___.

a reduction in the cost of global communications

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

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%

One way to describe collectivism is to say that it

believes that welfare of the society is best served by a governing body dictating what is in the society's best interest.

The Cold War is an example of how _____ can shape the course of history.

collectivism vs. individualism

A government plans the quantity of goods and services produced as well as the prices at which they are sold in a pure ___ economy.

command

In a _____ economy, dynamism and innovation are absent because private ownership does not exist and there is no incentive for individuals to look for a better way to serve customers.

command

A(n) ______ is a document that specifies the conditions under which an exchange is to occur, detailing the rights and obligations of the involved parties.

contract

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 its ethical to accept the lower labor and environmental standards found in many less developed nations.

As digures for 2019 relfect, 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.

decreased 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 culture of multinational enterprises on the world

The opponents of globalization argue that falling barriers to international trade

eliminate manufacturing jobs in wealthy economies.

In a market economy, the government's role is to

encourage free and fair competition and minimize restrictive business practices.

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

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

Colin told the management team 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. Collin is making an argument for ___.

free trade

Peter, a research associate at a biotechnology firm, develops a diagnostic kit for the rapid detection of malaria. In order to prevent his competitors from duplicating his invention, Peter should apply for a

patent.

According to Aristotle's philosophy on individualism,

private property receives greater care compared to communal property.

Under the government of Vladimir Putin in Russia, elections are held for political office while there are also systems in place that limit the civil liberties of opposition groups. What type of government does this represent?

pseudo-democracy

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 the other economies.

relative

The three main types of legal systems found around the world include common law, civil law, and _____ law.

theocratic

The globalization of markets is facilitated by the:

improvement in transportation technology.

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

lower labor costs

Organized crime, such as the "Russian Mafia" that existed following the collapse of communism in Russia and extorted money from businesses is an example of _____ action.

private

Lax enforcement of intellectual property rights in the computer software industry has lead to stealing of software applications. This illegal process is also known as

piracy.

In terms of economic growth, current indicators suggest that

there will be stagnation among the worldś poorest nations.

Supporters of globalization suggest that a solution to the problem of slow real income growth among unskilled workers is ___ societyś investment education.

to increase

When discussing a common law system, a country's legal history is known as ______.

tradition

Carrie's professor asked her to describe democracy. Which of these statements should she use?

The pure form of democracy believes that laws and policies should be made directly by citizens.

What statement characterizes social democrats?

They believed in achieving socialism through non-violent means.

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: 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: 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 interest.

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

True or false: Communism is in decline worldwide.

True

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

$8,000

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

1. International business must work within government limits. 2. International transactions involve converting money into different currencies. 3. Countries are different. 4. The range of problems in international business is wider

In terms of international business, what is a benefit of the Internet?

It makes it easier for buyers and sellers to connect.

What issue might raised at an antiglobalization demonstration?

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

True or False: Unlike the economic system of a country, the legal system is NOT influenced by the prevailing political system.

False