Mkt 310

When Jerry started his small appliance manufacturing company in the 1950s, every component part was made in the USA and the product was assembled in the USA. Today, he sources the components from China. The change at this company is an example of the _____.

globalization of production

FlexFabric is a medium-sized company based in Virginia. Over the past five years, the company has increased its international trade efforts and now 35% of its business takes place overseas. FlexFabric is an example of a(n) _____. Multiple choice question.

mini multinational

The International Monetary Fund (IMF) has been criticized for

minimizing a nation's sovereignty

As international trade expands, the economies of the world's nation-states are becoming

more intertwined

Technological innovation and low-cost transportation have _____ the cultural distance between countries

reduced

Companies rely on containerization to _____.

simplify the transfer of shipments from one form of transport to another

A country with high _____ has a barrier to international trade.

tariffs on imports of foreign goods

How did nation-states react to the economic environment of the 1920s and 1920s?

trade barriers were increased

Brite-Way Lighting is based in California and sells products within the United States as well as to ten foreign countries. Brite-Way Lighting is an example of a(n) _____ business.

International

When NAFTA was first introduced, what was the biggest argument opponents presented?

U.S. firms would move manufacturing to Mexico and feel free to pollute the air and employ child labor

The United Nations was established by _____ countries committed to preserving peace through economic cooperation and trade support.

51

We live in an ever-increasing knowledge society. How does this affect international trade?

Consumers know more about goods made worldwide which drives demand for those goods

A refrigerator parts manufacturer in China receives an order and loads the goods into a large receptacle that is then loaded on a ship headed for the United States. When the ship docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in Iowa. This scenario shows how _____ made the delivery of goods in the global marketplace much easier. Multiple choice question.

Containerization

In today's marketplace, distribution of production to separate locations has become more economical because transportation costs have _____.

Declined

What is a challenge faced by companies entering the global market?

Differences in consumer taste and preferences

True or false: Experts forecast that world trade will continue to decline more rapidly than world production.

False

The World Trade Organization (WTO) is the successor to ______.

GATT

It is common practice for people today to use products that are produced or assembled in various nations around the world. This is a reflection of _____.

Globalization

A country's stock of foreign direct investment is the total cumulative value of foreign investments that are taken as a percentage of that country's _____. Multiple choice question.

Gross domestic product

What is an accurate description of the World Bank?

It focuses on helping developing countries to 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 industrial power

What is an accurate description of the globalization of production?

Locating each stage of production where it can be done most economically

Land, labor, capital, and energy are all examples of factors of _____.

Production

Advances in information processing and communication are two ways _____ has made the globalization of markets a reality.

Technology

Which statement best describes 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 ensures that nation-states comply to the rules associated with trade treaties signed by member states?

The World Trade Organization

True or False: The development of Internet technology has lowered the barriers that small firms face in building international sales.

The development of Internet technology has lowered the barriers that small firms face in building international sales

Why would a company engage in the globalization of production?

To lower their overall cost structure

The stock of foreign direct investment refers to the ______ of foreign investments.

Total cumulative value

What can be an impediment to the globalization of production?

Transportation costs

True or False: The International Monetary Fund (IMF) was established to ensure the stability of the international monetary system. True false question.

True

During the 1960s, which country was the predominant world power in terms of foreign direct investment?

United States

When global institutions were introduced in the 1940s, governments in struggling nations would turn to the _____ for low-interest loans needed for infrastructure projects such as building roads.

World Bank

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

falling barriers to international trade drive the economy toward greater prosperity

The globalization of markets is facilitated by the

improvement of markets is facilitated by the

If you were to describe the global economy of the twenty-first century, it would be accurate to say that Multiple choice question.

more nations are becoming part of the developed world.

Evidence suggests that _____ has impacted the declining share of national income enjoyed by labor more so than globalization has.

technological change

The decline of the United States standing in industrial power since the 1960s, is considered a relative decline because it is a reflection of Multiple choice question.

the faster economic growth of other economies

What are the four basic purposes of the United Nations?

1. Maintaining international peace 2. Being a center for harmonizing the actions of nations 3. Solving humanitarian, cultural, and social issues 4. Developing friendly relations between nations

Select the four facts that described the demographics of the global economy up until the 1960s.

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

According to the critics of globalization, what are two results from falling trade barriers?

1. The destruction of manufacturing jobs in advanced economies 2. A depression of wages in developed nations

There have been two notable trends in the demographics of multinational enterprises since the 1960s. These include

1. the rise of non-US multinationals 2. the growth of mini-multinationals

During the 1960s, US firms created just over _____ of worldwide foreign direct investment and British firms were second accounting for just over 10 percent.

65%

The increasing number of trade agreements in place around the world creates a(n) _____ in world trade

increase

Since 1970, the average yearly outflow of foreign direct investment has _____.

increased

Studies exploring the share of labor in national income over the last two decades show that the share of national income accounted for by skilled labor has

increased

Global markets for industrial goods such as oil and wheat are more typical than those for consumer products because _____.

industrial good serve universal needs

Global markets for industrial goods such as oil and wheat are more typical than those for consumer products because _____.

industrial goods serve universal needs

Those who support globalization argue that increasing globalization will Multiple choice question.

lead to reduced prices for goods and services

Early outsourcing efforts were mostly limited to _____ activities while today numerous business activities can be outsourced.

manufacturing

As the barriers to the free flow of goods, services, and capital fell during the 1970s, one motivation for foreign direct investment by non-US firms was the desire to

move production activities to more desirable locations

Some demonstrations against globalization are based on the idea that falling barriers to international trade

result in job losses in industries targeted by foreign competitors

Based on several studies, the data suggest that real wages for Unskilled workers have ______ while real wages for skilled workers have_______

skilled, unskilled

Global institutions are needed to

stabilize and monitor the global marketplace

Supporters of globalization suggest that a solution to the problem of slow real income growth among the unskilled is _____.

to increase investments in education

True or false: The first web browser was introduced to the public in the 1970s and started the explosive growth of the Internet in foreign transactions.

False

The division between rich and poor nations has (increased or decreased?) with the advent of globalization?

Increased

Just a few decades ago, it would have cost a business much more money to find buyers in a foreign country. What has helped lower the cost of this process and allows buyers and sellers to easily find each other regardless of their location?

Internet

What is one benefit of the Internet?

It makes it easier to for buyers and sellers to connect

Based on rankings by Forbes in 2003, the second-largest source country of multinational enterprises was _____.

Japan

The globalization of _____ is the term used to describe the merging of national markets into one large global place.

Markets

Which of these companies is facing an impediment to the globalization of production?

US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an overseas company.

When global institutions were introduced in the 1940s, governments in struggling nations would turn to the _____ for low-interest loans needed for infrastructure projects such as building roads

World Banks

Critics of globalization point out that free trade

allows firms to abuse the weak labor and environmental laws in developing countries.

Using the results from Figure 1.1 in the text, it is evident that as the number of regional trade agreements goes up, world trade across country borders tends to _____.

also go up

One concern voiced by critics of globalization is that

an interdependent global economy shifts economic power away from national governments and toward organizations such as the united nations

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

broadened the gap between the rich and poor nations.

Current trends indicate that, due to the emerging economies, the world is moving _____ an economic system that is more favorable for international business.

closer to

Advances in _____ technology make it possible for companies to outsource customer service operations to another country.

communication

While managing an international business, one of the tasks of managers is to

decide if it is ethical to accept the lower labor and environmental standards found in many less developed nations

The globalization of the world economy has resulted in a relative _____ in the dominance of US firms in the global marketplace.

decline

The globalization of the world economy has resulted in a relative _____ in the dominance of US firms in the global marketplace. Multiple choice question.

decline

Creating and managing a globally dispersed production system is made easier by the ______ in costs of information processing and communication

decrease

Why are consumer products less likely than industrial products to be a source for the global marketplace?

differences in consumer tastes

One reason why a global market does not fully exist is _____.

differences in legal regulations among national markets

Critics of globalization protest in order

diminish the impact of the culture of multinational enterprises on the world

The globalization of markets and production implies that

domestic firms are facing intense competition from foreign firms.

The opponents of globalization argue that falling barriers to international trade will

eliminate manufacturing jobs in wealthy economies

In return for offering loans, the International Monetary Fund (IMF)

enforces its economic policies on nations

International trade occurs when a firm _____.

exports goods or services to consumers in another country

The Johnson Automotive Group recently closed two of its US manufacturing facilities and opened a new facility in Asia to take advantage of lower labor costs and savings in energy costs. The company made this change in order to benefit from _____.

factors of production

A United States-based shoe company has decided to invest in a British company that specializes in clasps and buckles. This would be an example of

foreign direct investment

Some say that the only way for highly indebted poorer countries to get out of poverty is to implement _____.

free trade

The International Monetary Fund and the World Bank are both examples of _____ that help govern the global business system.

global institutions

Renata is traveling across Europe and is surprised to find Starbucks, McDonald's, and Coca-Cola in nearly every city she visits. This shows a convergence of consumer tastes which creates a _____.

globalization of markets

Paragon Corp., based in Ohio, sources goods from Southeast Asia to take advantage of labor cost savings. This company is benefiting from _____.

globalization of production

In terms of innovation in transportation technology occurring since the 1950s, the development of _____ has essentially reduced the size of our entire world. (Check the two that apply.)

1. Commercial jets 2. Superfreighters

What are three things that result from the fact that the volume of world trade has been growing faster than world GDP?

1. Economies of nation-states are becoming more intertwined 2. More firms are dispersing parts of their production process around the globe 3. World has become significantly wealthier

True or false: While lowering trade barriers initially made global production possible, the advent of technology made globalization a reality.

True

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

The range of problems in international business is wider.International transactions involve converting money into different currencies.International business must work within government limitsCountries are different.

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 false question.

True

True or false: Containerization made the process of moving goods from one country to another less labor intensive. True false question.

True