HW1: Globalization

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General Agreement on Tariffs and Trade (GATT)

A series of treaters that reduced barriers to trade.

UN (United Nations)

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

Driving Force: Declining trade barriers

Implication for Business: better ability to export goods

Driving Force: Declining investment barriers

Implication for Business: better ability to optimize location and economies

Driving Force: Enhanced communication technologies

Implication for Business: growth in e-commerce

Driving Force: Enhanced transportation technologies

Implication for Business: lowered distance between countries.

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

International Monetary Fund

World Trade Organization (WTO)

Primarily responsible for policing world trading system.

[T/F] Today, nearly every nation in the world belongs to the United Nations.

True The United Nations was established in 1945, by 51 countries in which nearly every nation in the world belongs to the United Nations.

[T/F] A small country is short on cash for much needed infrastructure development projects. It could go to the World Bank for assistance.

True. The World Bank has focused on making low-interest loans to cash-strapped governments in poor nations that wish to understand significant infrastructure investments (ie. dams or roads)

The commercial jet aircraft market

can best be described as a global market

Boeing's 787 aircraft is produced by 50 suppliers spread around the world, a huge increase in global outsourcing as compared to the past. Boeing's strategy, like that of other multinational companies, suggests that

declining barriers to trade and investment are facilitating global production strategies

The purpose of the U.N.'s Millennium Development Goals that were established in 2000 was to

reduce the number of people living in extreme poverty.

The growth of trade as a percentage of global GDP

reflects the globalization of markets

Which of the following expresses one of the reasons why managing an international business is different from managing a purely domestic business?

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

[T/F] Globalization resulted in a decrease in non-U.S. firms' investment across national borders.

False. As the barriers to the free flow of goods, services, and capital fell, and as other countries increased their shares of world output, non-U.S. firms increasingly began to invest across national borders.

[T/F] Cultural differences have no effect on the way an international firm conducts its business around the globe.

False. Differences among countries require that an international business vary its practices country by country.

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

False. Since the 1960s, two notable trends in the demographics of the multinational enterprise has been: 1. the rise of non-U.S. multinationals 2. the growth of mini-multinationals

G20

Finance ministers and central bank governors of major economics coordinate policy financial crises.

Bretton Woods institutions: IMF and the World Bank

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

Which of the following statements pertaining to changes in the global economy of the 21st century is true?

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

An international business is defined as

any firm that engages in international trade

Foreign direct investment occurs when a firm invests resources in

business activities outside its home countries

Which of the following factors contributed to the Great Depression of the 1930s?

countries progressively raising trade barriers against each other

Globalization has enabled organizations to reduce their costs of production by

creating manufacturing units in developing countries

Which of the following actions was implemented in the Uruguay Round, finalized in December 1993?

establishment of the World Trade Organization

Boeing produced just 5 percent of its original 737 and 747 outside the United States but produces 65 percent of its newer 787 in foreign locations. Boeing's production strategy

reflects the globalization of production

The stock of foreign direct investment refers to

the total cumulative value of foreign investments as a percentage of the country's GDP


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