MKT 310 Exam 1

The Changing World Order

China continues to move toward greater free market reforms. If this continues for two more decades, China may move from third-world to industrial superpower status more rapidly than Japan did.

A monotheistic religion—the belief in one God.

Christianity

A major factor leading to Argentina's current economic problems is its

lack of strong governance.

Russians tend to rank ________ on individualism and _______ on uncertainty avoidance.

low; high

Which is not a factor contributing to economic growth in China since the 1970s?

nationalization of most vital industrial sectors

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

technological change

Suffering originates in a person's desire for pleasure.

Buddhism

The changing World Output and world trade picture

It's estimated that today's developing nations may account for more than 60% of world economic activity by 2030, while rich nations' economic activity, currently at 55%, may decline to 38%.

technology: transportation

faster and cheaper shipping and optimal production

. A moral force requires the acceptance of certain responsibilities.

Hinduism

How have tariff rates for manufactured goods been affected by the global efforts of GATT? Multiple choice question.

Tariff rates fell significantly since 1950.

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

free trade

Those who support globalization argue that increasing globalization will

lead to reduced prices for goods and services.

Political Trends

-The Internet is allowing democratic ideals to penetrate closed societies as never before. -The end of the Cold War ushered in a "new world order." -Privatization is a way to stimulate growth and efficiency by offering private investors the incentive of profits. -Privatization can mean increases in productivity, entering new markets, and leaving losing ones.

Public Action Examples

-You face demands from government officials that will be required before you are allowed to do business. Payments are to be made to individuals, not the government. -A government official is demanding trips, education payments for his children, and a new car before he will allow your firm to be considered for a procurement bid. -You've learned your firm will face very expensive new licensing fees in addition to a new tax regulation that targets foreign firms (you) in a specific industry.

The IMF and World Bank were created in 1944 by 44 nations that met to maintain order in the international monetary system and promote economic growth.

Bretton woods institutions: IMF and the World Bank

What do critics argue about economic and human welfare?

Exploitation of lesser developed country citizens Loss of manufacturing jobs in developed countries Growing gap between the rich and the poor Leads to a "race to the bottom"

The globalization of markets is facilitated by the

improvement in transportation technology.

Arguments for globalization

-Increased efficiency of the whole economy. -Tougher environmental regulations follow economic progress. -Real power resides with nation-states. -Living standards improve.

How have tariff rates for manufactured goods been affected by the global efforts of GATT?

Tariff rates fell significantly since 1950.

The Changing FDI Picture

Toyota rapidly increased its investment in auto production facilities in the United States and Europe during the late 1980s and early 1990s.

Smiling is an example of

Unspoken Language

The political system in Venezuela reflects the ideals of

communist totalitarianism.

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

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

Many Russians feel that smiling when nothing funny has happened is odd. Smiling is an example of

unspoken language.

A series of treaties that reduced barriers to trade.

GATT

Which is not an accurate depiction of globalization?

The number of people living on farms has increased

Freedom to have democratically free market capitalism:

Value

The way a society views the role of women:

Value

An American businessperson in Russia who recognizes that a lack of a smile by their Russian counterpart does not indicate that the American has done anything wrong might have

a high degree of cross-cultural literacy.

China's state-owned enterprises

are less productive than its private sector businesses.

China's economic growth from the late 1970s to the present can largely be attributed to

its shift toward more private enterprises.

declining trade barriers

lower tariffs and increased international trade in goods and services

Venezuela's economic system can best be described as a

mixed economy.

A major factor contributing to the fraying of globalization since 2008 is

more regulations limiting credit.

Globalization has

negatively impacted both blue-collar and white-collar jobs.

The general acceptance by Russians of hierarchy and power differentials arising from social status reflects their

values.

For companies, Venezuela

would likely be considered a highly risky destination for doing business.

Most countries have laws against theft:

Mores

Spread of Market-Based Systems

-Deregulation: Price controls are replaced by supply and demand. Restrictions on private enterprise are removed, and restrictions on foreign investment and trade are eased. -Legal system protecting property rights: Private property rights must be protected, and an enforcement mechanism put into place. Commercial codes must be improved, and courts must be made effective. -Privatization: The economy and former state monopolies must be opened to competition. Governance must also change from state to private owners and managers.

New World Order and Terrorism

-Huntington: A noted author envisioned a world split into different civilizations with different value systems and ideologies. This vision suggests a world hazardous to business with global terrorism. -Fukuyama: A noted author suggests the war of ideas may be at an end, and liberal democracy will be the way of the future. It is a vision of a harmonious world.

Argument Against Globalization

-Manufacturing jobs move to low-wage countries. -Lack of adequate regulations to protect the environment. -The gap between the rich and the poor nations of the world has gotten wider. -

Economic Trend's

-Markets move more freely, and private enterprise grows in a supportive environment. -States choose their levels of participation in the economic system. The number of centrally planned economies—centrally planned by the state—is declining. -Privatization is a way to stimulate growth and efficiency by offering private investors the incentive of profits. Privatization can mean increases in productivity, entering new markets, and leaving losing ones.

Evaluate Risks

-The current leader of the country has been in power for decades, but his health is failing. Social unrest may affect the leadership transition, and there are several opposition groups -Social unrest has been triggered by rising prices for food and essentials. The government, which already has a large debt burden, may need to borrow more.

Evaluate Costs

-The laws on business practices are evolving, but you see potential problems in ensuring contract disputes are resolved fairly. -Political entities in the government expect to receive what may be considered bribes in order to be able to get the necessary business licenses and permits. -Distribution systems are not well developed, and you may have to create your own. While this could create a competitive advantage, it is expensive to set up.

Spread of Democracy

-Totalitarianism failure: Brutal regimes have found citizens protesting, rebelling, and at times removing leaders of the country. -Emergence of middle and working classes: Once citizens experience new freedoms that come with increasing prosperity and dispassionate enforcement of contracts, they push for democratic reform. -New information and communication technologies: These technologies have created new conduits for the spread of democratic ideals and information from free societies.

Private Actions

-You face demands from government officials that will be required before you are allowed to do business. Payments are to be made to individuals, not the government. -Your business is told to pay a group of individuals or face violent retribution. You have learned other similar businesses have faced similar demands. -A group of hackers based in the country where your firm wishes to conduct business has broken into your database and is demanding payment or they will destroy your firm's records. -You thought your contract would protect your rights, but your customer is now refusing to pay for merchandise already received, and the courts don't seem willing to help you.

Evaluate Benefits

-You see an opportunity to establish a strong market presence before your competitors, and you will be able to set product standards. -Property rights seem to be well protected as part of a total system that shows few signs of state control of key sectors. -You are looking at a country's population growth. You are concerned not only about the total population, but also about the growth of the middle class and its consumers.

According to the World Trade Organization, the COVID-19 pandemic will affect world trade and cross-border investment may fall by as much as _____. Multiple choice question.

40 percent

Which best characterizes the political system in China?

China is a one-party state.

How time is viewed when conducting business meetings in Western countries as opposed to Latin American and Middle Eastern countries

Folkways

Recognizing that Russians typically only smile in response to something funny reflects an understanding of which part of Russia's culture?

Folkways

The importance of ritualistic and symbolic behavior of bowing when meeting Japanese business executives:

Folkways

Finance ministers and central bank governors of major economies coordinate policy on global financial crises.

GTO

Which two items have reduced the cultural distance between countries?

Global communication networks Low-cost transportation

The Changing Nature of the Multinational Enterprise

In 1970, China's Hisense started with 10 employees. Today, it has sales of $7 billion, with overseas anufacturing subsidiaries in Algeria, Hungary, Iran, Pakistan, and South Africa.

Ben has very loose ties with his family and enjoys wearing provocative T-shirts to express a sense of freedom and uniqueness. He shows no interest in joining the family business.

Individualism/ Collectivism

Which best describes what takes place when a Chinese supplier of bicycle parts exports bike seats to Detroit Bikes?

International Trade

In order to escape growing opposition, the prophet Muhammad left Mecca.

Islam

What do supporters of economic and human welfare argue?

Leads to global economic development, including development of lesser developed countries Improved human welfare Provides opportunities to people in emerging markets

Critics of Globalization

Loss of local retailers Promotion of consumerist culture Uncontrolled access leading to marketing of harmful products uneducated populations (cigarettes) Unregulated production opening the consumers to risk (lead in toys, melamine in powder milk, antibiotic in fish, genetic engineering

National Sovereignty and Cultural Identity

Loss of national identity (undue influence of WTO, Worldbanl, IMF) Imposing Western values as "universal"

Which two items have reduced the cultural distance between countries?

Low-cost transportation Global communication networks

Jiro is extremely driven and assertive. His goal is to become the most powerful man in the company.

Masculinity vs. Feminity

The use of alcohol is not permitted in Saudi Arabia

Mores

What are some companies reportedly considering regarding their production efforts and minimizing catastrophes like the COVID-19 pandemic?

Moving production closer to home to avoid future disruptions

What are some companies reportedly considering regarding their production efforts and minimizing catastrophes like the COVID-19 pandemic? Multiple choice question.

Moving production closer to home to avoid future disruptions

Ming is from a powerful family, and because of this, she will be in an authoritative position in the workplace.

Power Distance

Trade agreements between nations are another way in which trade barriers have been reduced. Which statement accurately depicts the current state of trade agreements in the world?

Since the 1990s, trade agreements have increased dramatically.

Trade agreements between nations are another way in which trade barriers have been reduced. Which statement accurately depicts the current state of trade agreements in the world? Multiple choice question.

Since the 1990s, trade agreements have increased dramatically.

Consumer Welfare- Supporters of Globalization

Supporters of globalization Benefit consumers worldwide, through... A wider choice of products More affordable products A wide reach to consumers

Detroit Bike's strategy has been impacted by tariffs imposed by Donald Trump on parts imported from China. Which institution is responsible for ensuring countries adhere to their trade treaties?

The World Trade Organization

Which statement accurately describes the prediction for changes in the share of world output?

There will be a decline in the share of world output associated with rich, industrialized nations.

Which statement accurately describes the prediction for changes in the share of world output? Multiple choice question.

There will be a decline in the share of world output associated with rich, industrialized nations.

Bill works very hard in his job and expects to see the reward of his labor quickly.

Time Orientation

The text lists several reasons that stand out as the cause for economic stagnation in the world's poorest countries. What are three of those reasons?

Totalitarian governments War Poor property rights protection

As much as 70 percent of its work is devoted to establishing higher standards of living, full employment, and conditions of economic and social progress and development.

UN

Elena has worked at the same company for more than 15 years. She parks in the same parking spot every day and values routine and predictability.

Uncertainty Avoidance

Primarily responsible for policing world trading system.

WTO

What is a key factor contributing to the feeling that some people have been left behind by globalization?

advances in technology

Detroit Bike is located in the United States, assembles its product in the United States, but imports components from China and other countries. Which best describes Detroit Bikes?

an international business

technology; computing and communicatipn

explosive growth of high-power, low cost computing and growth in services

Which best describes Detroit Bike's sourcing of components from other countries for assembly in the United States?

globalization of production

Argentina's economic development has been hampered because since 1950, Argentina

has consistently run a budget deficit.

According to the supporters of globalization, falling barriers to international investment

help to create employment opportunities in countries that participate in the global trading system.

Which was not a factor contributing to Argentina's prosperous economy in the early 1900s?

high barriers to foreign investment

After many months of communicating via email and telephone, Jade is eager to meet her Russian colleague, Irina, at a trade show in St. Petersburg, Russia. Jade is upset and offended, however, when Irina fails to return her warm smile when they finally meet in person. Jade

is demonstrating a lack of cross-cultural literacy.

In just a few years, thanks to the policies and actions of its undemocratic and authoritarian economy, Venezuela has gone from being a prosperous country to a nation with widespread poverty. We use the term ________ to indicate that a country's political, economic, and legal system are interdependent, and influence the country's level of economic well-being.

political economy

declining investment barriers

rapid FDI growth and new production opportunities and new markets

From 2003 to 2015, ___________ in Argentina.

state intervention increased

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

technological change

A common complaint among those pushing back against globalization is that

the benefits of globalization are not evenly distributed among socioeconomic classes.

Based on predictions for the future share of world output, businesses should seek economic opportunities in _____.

the developing nations of the world

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

to increase investments in education

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

to increase investments in education