Chapter 1: Globalization

Which of the following expresses one of the reasons why managing an international business is different from managing a purely domestic business? -The range of problems confronted by a manager in a domestic business is wider and the problems more complex that those confronted by a manager in an international business. -International business transactions use the Euro instead of the U.S. dollar. -An international business does not need to contend with government intervention whereas a domestic business must work within the confines of their local government. -An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system.

An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system.

Which of the following factors contributed to the Great Depression of the 1930s? -Artificial fixing of currency rate by China -Problems in the U.S. subprime mortgage lending market -Countries progressively raised trade barriers against each other -Outsourcing of manufacturing units to developed nations

Countries progressively raised trade barriers against each other

Which of the following actions was implemented in the Uruguay Round, finalized in December 1993? -Reduction in the protection for patents, trademarks, and copyrights -Establishment of the World Trade Organization -Extension of the GATT to cover consumer products -Enhancement of trade barriers

Establishment of the World Trade Organization

Cultural differences have no effect on the way an international firm conducts its business around the globe.

False

Globalization resulted in a decrease in non-U.S. firms' investment across national borders.

False

Since the 1960s, a notable trend in the demographics of the multinational enterprise has been the rise of U.S. multinationals.

False

The _____ is often seen as the lender of last resort.

International Monetary Fund

Which of the following statements pertaining to changes in the global economy of the 21st century is true? -Barriers to the free flow of goods, services, and capital have increased. -Volume of global output has been growing more rapidly than cross-border trade and investment. -National economies are becoming more independent. -The world is moving toward an economic system that is more favorable for international business.

The world is moving toward an economic system that is more favorable for international business.

One of the U.N.'s Millennium Goals was to cut in half the number of people living in extreme poverty by 2015. Which of the following is an accurate statement concerning this goal or its impact? -This goal was reached five years ahead of schedule. -As of 2015, this goal had not yet been reached. -Though China and India have been rapidly integrated into the global economy, their people have seen little reduction in poverty levels. -Though approximately 1.2 billion people were pulled out of poverty, there is no connection between this achievement and globalization.

This goal was reached five years ahead of schedule.

An international business is any firm that engages in international trade or investment.

True

One concern frequently voiced by those opposed to globalization is that falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies such as the United States and Western Europe.

True

The World Bank has focused on making low-interest loans to cash-strapped governments in poor nations that wish to undertake significant infrastructure investments.

True

The agricultural reforms discussed in the Doha talks of the WTO, if implemented, would provide the world's poorer nations with access to the markets of the developed world.

True

The _____ was created in 1944 by 44 nations that met in Breton Woods, New Hampshire to promote economic development.

World Bank

Opponents of globalization argue that falling trade barriers.. -allow firms to move manufacturing activities to countries with lower wage rates. -create manufacturing jobs in wealthy advanced economies. -force countries to maintain manufacturing in their home -countries regardless of wage rates. -reduce the pool of global labor.

allow firms to move manufacturing activities to countries with lower wage rates.

Globalization has enabled organizations to reduce their costs of production by... -differentiating material culture the world over. -setting up barriers to cross-border trade. -creating manufacturing units in developing countries. -turning national economies into self-contained entities.

creating manufacturing units in developing countries.

An international business... -needs to have homogenous practices across countries. -is an MNE. -has an added layer of U.N. regulations. -is any firm that exports or imports.

is any firm that exports or imports.

Globalization critics argue that the decline in unskilled wage rates is due to the... -migration of low-wage manufacturing jobs offshore. -privatization of government owned enterprises. -regulation of the global market by WTO. -technology-induced shift towards skilled jobs.

migration of low-wage manufacturing jobs offshore.

At the Doha Round of the WTO in late 2001, an agenda was established to..

phase out subsidies to agricultural producers.

The stock of foreign direct investment refers to... -the entry of funds into a country when foreigners make purchases in the country's stock and bond markets. -the total cumulative value of foreign investments. -movements of labor, capital, and other factors of production between countries. -total export or import products from other countries.

the total cumulative value of foreign investments.