BUSI 303 -Chapter 1

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

$8,000

Which statement regarding conducting international business in China is accurate?

China represents a large - basically untapped - market.

The international monetary fund (IMF) has been criticized for

Compromise in the jurisdiction and decision-making powers of the receiving country.

Why do companies engage in the globalization of production?

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

Supporters of globalization argue that bodies such as the world trade organization and the united nations exist to serve the collective interest of member states, not to subvert those interest.

True

Colin told the management team that the company should produce the textiles for 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. Colin is making an argument for free trade.

free trade

The national differences in the quality of factors of production help companies

improve the quality or functionality of their product offering

Land labor capital and energy are all examples of factors of

production

Critics of globalization argue that falling trade barriers

create manufacturing jobs in low-wage countries. Destroy manufacturing jobs in advanced economies. Depress wages in developed nations.

Which of the following is a challenge faced by companies entering the global market?

Differences in consumer tastes and preferences

The obstacles to globalization include

Differences in legal regulations among national markets

Critics of globalization protest in order to

Diminish the impact of the culture of multinational enterprises on the world.

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

Eliminate manufacturing jobs and wealthy economies.

In return for offering loans, the international monetary fund (IMF)

Enforces its economic policies on nations

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

Internet

Foreign direct investment occurs when an investment is made by an

Investment is made by a company based in one country into a company or entity based in another country.

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

It has diminished in power.

Beginning in the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations to developing nations with more optimal

Labor costs

What technological advancements have a made the globalization of markets and production a reality?

Transportation technology, communication technology, and information processing.

As emerging economies such as China, India, Russia, and Brazil continue to grow, forecast predict a future relative decline in the share of world output and world exports accounted for by the U.S. and other long-established developed nations.

True

The United Nations focuses on basic fundamental issues such as refugee protection sustainable development and disaster relief

True

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

True

The international monetary fund (IMF) was established to ensure the stability of the international monetary system.

True

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

True

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 employee child labor.

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

widened the gap between the rich and poor nations

One characteristic of containerization is that

It reduces the cost of shipping goods over long distances.

What occurred when high tariffs were placed on importing manufactured goods during the 1920s and 1930s?

An increase in trade barriers

One concern voice by critics of globalization is that

An interdependent global economy chefs economic power away from national governments and toward organizations such as the United Nations.

Influential economist, politicians, and business leaders to favor globalization argue that

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

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

False

Marilyn's U.S. base 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.

The text note 6 countries that are considered the most important national sources in terms of foreign direct investment. What are those questions?

France, United Kingdom, Netherlands, United States, Japan, Germany.

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.

What factor creates a barrier to international trade?

High tariffs on imports of foreign goods

What is an accurate description of the globalization of markets?

National differences and taste and preferences for consumer products is an important factor that acts as a brake on globalization.

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

Production.

The development of the microprocessor has

Reduced the cost of global communications

The four basic purposes of the united nations include

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

Global institutions are needed to

Stabilize and monitor the global marketplace.

From the 1990s until today, foreign direct investment inflows can best be described as

Surging in slumping.

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

These include the growth of mini-multinationals. The rise of the non-U.S. multinationals

Company XYZ sources goods from South East Asia to take advantage of labor cost savings. This is called

The globalization of production.

Which of the following describes The impact of substantial impediments to globalization that still exist?

The impediments make it difficult for companies to maximize productive activities.

Which organization is responsible for dealing with the rules of trade between nations?

World trade organization

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

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

Due to globalization, firms follow each other around the world, thereby

Creating some uniformity across markets.

What is an accurate description of the world bank?

It focuses on helping a developing countries to fight poverty through investments and the underlying structure of the country.

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

U.S. dominance in the world economy and world trade. Dominance of large, multi national U.S. firms in international business scene. Roughly half of the globe was off-limits to western international business. U.S. dominance in world foreign direct investment.

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

War, Totalitarian government, and poor property rights protection

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

What is the benefit of the Internet?

It makes it easier for buyers and sellers to connect.