IBUS311 Chapter 1: Globalization

What are three examples of factors of production? Select all that apply: - Advertising - Capital - Labor - Sales - Land

- Capital - Labor - Land

Boeing's rationale for outsourcing so much production to foreign suppliers is based on which two factors, according to the text? Select all that apply: - Using suppliers that are the best in the world at a particular activity - Capitalizing on its advanced foreign exchange mechanism to minimize risk - Increasing the chance to win significant orders from airlines in those countries - Earning recognition for having a multinational staff

- Using suppliers that are the best in the world at a particular activity - Increasing the chance to win significant orders from airlines in those countries

What are two impediments to globalization that a company might face? Select all that apply: - transportation costs - domestic human relations - political risk - tragedy of the commons

- transportation costs - political risk

What is an accurate description of the International Monetary Fund (IMF)? a) The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil b) In return for loans, the IMF does not mandate nation-states to adopt specific economic policies c) Unlike the World Trade Organization, the IMF does not usurp the sovereignty of nation-states d) The IMF is considered less controversial than the World Bank

a) The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil

What is the best way to characterize the impact of existing impediments to globalization? a) The impediments make it difficult for companies to maximize production activities b) The impediments increase the economic and political stability among various countries c) The impediments reduce the national differences in consumer tastes and preferences d) The impediments make it significantly easier for firms to sell their products and services internationally

a) The impediments make it difficult for companies to maximize production activities

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 a) True b) False

a) True Reason why it is this option: As of 2019, there were 164 nations that were members of WTO and they accounted for 98% of world trade

What is the best description of the globalization of markets? a) bringing traditionally separate national markets into one cohesive marketplace b) introduction of increased trade barriers to limit cross-border trade c) division of an existing market into smaller, independent market segments d) an economically independent market that operates without competition

a) bringing traditionally separate national markets into one cohesive marketplace

During the early years of globalization, outsourcing was primarily confined to _______ activities. a) manufacturing b) service c) promotion d) technology

a) manufacturing

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. a) 25% b) 65% c) 95% d) 10%

b) 65%

Which country has been the world's largest exporter since 2009? a) Mexico b) China c) Italy d) United States

b) China

What is a challenge faced by companies entering the global market? a) Increased homogeneity of products across national markets b) Differences in consumer tastes and preferences c) Diversity being replaced by uniformity d) Falling barriers to cross-border trade

b) Differences in consumer tastes and preferences

True or false: Small and medium-sized companies do not typically benefit from the globalization of markets. a) True b) False

b) False Reason why it's not the other option: Companies of all sizes benefit from the globalization of markets. In the U.S. alone, more than 300,000 smaller firms accounted for 98% of companies that exported in 2017

True or False: The International Monetary Fund (IMF) is considered less controversial than the World Bank. a) True b) False

b) False Why it is not the other option: Both the IMF and the World Bank were established at Bretton Woods. The World Bank is the less controversial of the two institutions.

What is an accurate depiction of the World Bank? a) It is more controversial than the International Monetary Fund (IMF) b) It focuses on helping developing countries fight poverty through investments in the underlying structure of the country c) It provides financial assistance only to countries whose currencies are gaining value against those of other nations d) It was established to promote the globalization of services among member nations

b) It focuses on helping developing countries fight poverty through investments in the underlying structure of the country

What statement accurately describes the current membership of the United Nations? a) Today, very few nations have become members of the United Nations b) Today, nearly every nation in the world belongs to the United Nations c) Only the developed countries belong to the United Nations d) Only the developing countries belong to the United Nations

b) Today, nearly every nation in the world belongs to the United Nations

What global institution was established on October 24, 1945 and one of its key purposes is to maintain international peace and security? a) International Monetary Fund b) United Nations c) G20 d) World Bank

b) United Nations

The International Monetary Fund (IMF) has been criticized for a) helping only those nations that wish to undertake infrastructure investment b) compromising the jurisdiction and decision-making powers of the receiving country c) lowering the barriers to cross-border trade d) not forcing nations to adopt its economic policies

b) compromising the jurisdiction and decision-making powers of the receiving country

Some U.S. hospitals outsource radiology work to India. This is a recent advancement that is possible because of advancements in _____. a) customer service b) technology c) legislation d) tariffs

b) technology

Hanson Housewares Inc., based in Tennessee, sources goods from Southeast Asia to take advantage of labor cost savings. This is an example of ______. a) intrastate investment b) the globalization of production c) licensing d) the tragedy of the commons

b) the globalization of production

What is an example of an obstacle to globalization? a) An increase in cross-border trade b) Similarities in the business systems used in national markets c) Differences in legal regulations among national markets d) A decrease in the overhead expenses incurred by firms

c) Differences in legal regulations among national markets

________ refers to the shift toward international economic integration. a) Customization b) Centralization c) Globalization d) Repatriation

c) Globalization

Which global institution is the successor to GATT? a) The World Bank b) The United Nations c) The World Trade Organization d) The International Monetary Fund

c) The World Trade Organization

Why do companies engage in the globalization of production? a) To increase the barriers to cross-border trade b) To lower their profit margin by outsourcing, which allows them to compete more effectively c) To lower their overall cost structure or improve the quality of their product offering d) To increase the overall cost structure of their business operations

c) To lower their overall cost structure or improve the quality of their product offering

While it is known for its peacekeeping role, the United Nations devotes nearly 70% of its work toward promoting conditions of a) political freedoms across the nations b) religious mandates c) a vibrant global economy d) gender equality

c) a vibrant global economy

In return for offering loans, the International Monetary Fund (IMF) a) raises barriers to cross-border trade b) maintains the sovereignty of nation-states c) enforces its economic policies on nations d) settles trade disputes

c) enforces its economic policies on nations

The national differences in the quality of factors of production help companies a) increase the barriers to cross-border trade b) increase the overall cost structure of their business operations c) improve the quality or functionality of their product offering d) lower their profit margin thus allowing them to compete more effectively

c) improve the quality or functionality of their product offering

One of the global institutions that emerged over the past 75 years is GATT which stands for the General Agreement on Tariffs and _______. a) targets b) time c) trade d) taxes

c) trade

Which statement accurately describes the globalization of markets? a) Most global markets currently are not markets for industrial goods and materials but are markets for consumer products b) The globalization of markets increases the barriers across various countries to prevent cross-border trade c) Companies entering global markets never confront the same firms as their competitors in nation after nation d) National differences in tastes and preferences for consumer products is an important factor that acts as a brake on globalization

d) National differences in tastes and preferences for consumer products is an important factor that acts a brake on globalization

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? a) International Monetary Fund b) World Bank c) United Nations d) World Trade Organization

d) World Trade Organization

Due to globalization, firms follow each other around the world, thereby a) increasing barriers cross-border trade b) reducing foreign direct investment c) replacing conformity with greater diversity d) creating some uniformity across markets

d) creating some uniformity across markets

Historically, national markets were distinct and separate entities. Today, these separate national markets have merged. This process is known as _______. a) cottage industries b) the tragedy of the commons c) mass customization d) the globalization of markets

d) the globalization of markets