MGT 302 - Chapter 1

Which of the following statements regarding conducting international business in China is TRUE?

China represents a large -- basically untapped -- market.

What are the two macro factors that underlie the trend toward greater globalization?

Technology Change + Decline in Trade Barriers

Historically, national markets were distinct and separate entities. Today, these separate national markets have merged. This process is known as

The Globalization of Markets

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

USA

Opponents of globalization are concerned that manufacturing jobs will be moved to more _____ countries.

developing

When a company invests in a company or entity outside its home country, it is participating in

foreign direct investment

A(n) ______ business is any firm that engages in cross-border trade or investment.

international

The globalization of _____ refers to the fact that producers can source goods and services from anywhere in the world to take advantage of cost savings.

production

Which of the following statements accurately describe the global economy in the twenty-first century?

More nations are becoming part of the developed world.

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 interests.

True

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

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

In terms of international business, which of the following statements accurately describes Latin America?

While favorable economic trends have recently occurred, there is no guarantee that they will continue.

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

Those who support globalization argue that increasing globalization will

lead to reduced prices for goods and services.

A(n) ______ is any business that has productive activities in two or more countries.

multinational enterprise

Company XYZ, based in Idaho, sources goods from Southeast Asia to take advantage of labor cost savings. This is an example of _____.

the globalization of production

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

the rise of non-U.S. multinationals the growth of mini-multinationals

The stock of foreign direct investment refers to the ______ of foreign investments as a percentage of the country's GDP.

total cumulative value

What are the two macro factors that underlie the trend toward greater globalization?

Decline in Trade Barriers + Technology Change

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 falling barriers to international trade

eliminate manufacturing jobs in wealthy economies.

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

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

Which one of the following statements is TRUE about microprocessors?

They can decode vast amounts of information.

Which of the following issues are raised by antiglobalization demonstrations?

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

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

False

Which of the following is a concern voiced by critics of globalization?

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

Marilyn's U.S.-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

In the 1960s, when a customer in the United States purchased a television, that television had been manufactured in the United States. Today, thanks to the fall of international trade barriers, televisions purchased in the United States might be manufactured in China or South Korea. This change has occurred as the result of _____.

Globalization

______ refers to the shift toward economic international integration

Globalization

Company XYZ, based in Idaho, sources goods from Southeast Asia to take advantage of labor cost savings. This is an example of

The Globalization of Production

The stock of foreign direct investment has _____ in the United States, China, Japan, and the United Kingdom since 1995

Increased

James works at a lawn mower manufacturing company in St. Louis, Missouri, and his company imports component parts from Thailand and also ships final product to various countries. James's company is an example of a(n) _____ business.

International

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 in power.

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

Poor property rights protection Totalitarian Governments Prolonged Civil War

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 other economies.

Relative

The development of the microprocessor has lead to

a reduction in the cost of global communications

Critics of globalization point out that free trade

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

What is the best description of the globalization of markets?

bringing traditionally separate national markets into one cohesive marketplace

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