187 Chapter 1

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

technological change decline in trade barriers

The text notes that there are two macro factors fueling the trend toward greater globalization. These two factors focus on a decline in trade barriers and

technological change.

One of the global institutions that emerged over the past 75 years is GATT which stands for the General Agreement on Tariffs and _____.

trade

The doubling of the power of microprocessor technology while the costs of its production decreases by half is called ______ Law.

Moore's

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

False

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

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

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

Critics of globalization protest in order to _____.

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

International trade occurs when a company

exports goods or services to consumers in another country.

What is an accurate description of 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 global institution is the successor to GATT?

The World Trade Organization

Select the four facts that describe the demographics of the global economy up until the 1960s. (Check all that apply.)

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

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?

World Trade Organization

______ refers to the shift toward economic international integration.

Globalization

In terms of international business, what is a benefit of the Internet?

It makes it easier for buyers and sellers to connect.

What is an accurate description of microprocessors?

They can decode vast amounts of information.

Why do companies engage in the globalization of production?

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

What is the best description of the globalization of markets?

bringing traditionally separate national markets into one cohesive marketplace

Mallory's US-based lifestyle company decides to invest in an Italian company that specializes in health and wellness. This would be an example of

foreign direct investment.

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

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

A company is involved in foreign direct investment when it

invests in business activities outside of its home country.

Those who support globalization argue that increasing globalization will

lead to reduced prices for goods and services.

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

the globalization of markets

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

the globalization of production

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

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