ib midterm questions
A political system includes all of the following EXCEPT ________.
A. the structures by which a nation governs itself B. the processes by which a nation governs itself C. the laws by which a nation governs itself *D. the language by which a nation governs itself* E. the activities by which a nation governs itself
Critics of the WTO and the IMF role believe that these global organizations' policies cause the erosion of ________.
the ability of governments to have control over their own economics and societies
iplc: 2. maturing product stage
the domestic market and markets abroad become fully aware of the existence of the product and its benefits
iplc: 1. the new product stage
the high purchasing power and demand of buyers in an industrialized country drive a company to design and introduce a new product concept
According to ________, as a company increases the extent to which it specializes in the production of a particular good, output rises because of gains in efficiency
the new trade theory
________ is the study of how a country manages its affairs by using its political, economic, and legal systems.
political economy
Which of the following is the likelihood that a society will undergo political change that negatively affects local business activity?
political risk
Which of the following is NOT a characteristic of a market economy?
price setting
Companies that sell global products can reduce costs by ________.
standardizing certain marketing activities
Some allege that, when a manufacturing job is lost in a wealthy nation, the new job pays less than the previous one. As a result those opposed to globalization say this decreases all of the following EXCEPT ________.
*A. fear* B. job security C. trade barriers D. employee morale E. employee loyalty
Global products and global competition characterize many industries and markets, including all of the following EXCEPT ________.
*A. environmentally harmful products* B. consumer goods C. semiconductors D. aircraft E. automobiles
Innovations that have had a considerable impact on globalization include all of the following EXCEPT ________.
*A. increasing the number of intermediaries* B. e-mail C. intranets D. the Internet E. videoconferencing
Some say that globalization erodes national sovereignty. National sovereignty does not mean that a nation-state ________.
A. cannot intervene in the affairs of other nations B. is autonomous *C. cannot enter into binding international agreements* D. can freely select its government E. can control movements across its borders
The main aspects of the debate about inequality include all EXCEPT ________
. A. inequality within nations *B. gender inequality* C. global inequality D. worldwide inequality E. inequality between nations
Governments intervene in international trade for the following reasons EXCEPT ________.
. A. protecting national identity B. protecting jobs *C. promoting free trade* D. protecting national security E. protecting infant industries
What forces underlie the globalization of markets and production?
. Falling barriers to trade and investment and technological innovation
Which of the following is NOT an argument in the debate over globalization's influence on culture?
A. Deeper values that embody the essence of cultures are resistant to a global consumer culture. B. Local values and traditions are being replaced by U.S. companies promoting "Western" values. C. Global consumer-goods companies destroy cultural diversity by putting local companies out of business. *D. A poor marketing effort can cause great products to fade into obscurity.* E. Globalization fosters two important values: tolerance and diversity.
Which of the following is NOT stated by the new trade theory?
A. Government may play a role in assisting its home companies. B. The companies first to market can create barriers to entry. *C. Government should play no role in assisting home companies.* D. There are gains to be made from increasing economies of scale. E. There are gains to be made from specialization.
Which of the following is NOT a method of managing political risk?
A. Information gathering B. Partnerships *C. Conducting market research* D. Adaptation E. Political influence
Which of the following is NOT an instrument of trade restriction?
A. Local content requirements B. Administrative delays C. Currency controls *D. Special government agencies* E. Embargoes
A government may nationalize an industry to do all EXCEPT ________
A. use subsidies to protect an industry for ideological reasons B. invest in sectors, such as public utilities, that private companies cannot afford C. control industry profits so they cannot be transferred to low tax-rate countries *D. encourage globalization* E. save local jobs in an ailing industry to gain political clout
Which of the following can best describe born global firms?
A. Companies that employ thousands of workers B. Import firms C. Multinational corporations D. Custom brokers *E. Companies that adopt a global perspective and engages in international business from the start*
Which of the following is NOT a benefit that companies obtain from the globalization of production?
A. Technical expertise B. Low-cost labor C. Raw materials D. Production inputs *E. High-cost labor*
A born global firm, a company that adopts a global perspective and engages in international business from inception, does NOT ________.
A. sell traditional products and benefit from technology B. become international competitors in less than three years' time. *C. wait at least a year before exporting products and expanding operations globally* D. tend to have an innovative culture and knowledge-based organizational capabilities E. use electronic distribution for digitized products
Which of following options helps companies reduce costs when they sell consumer goods globally?
A.Hiring international staff to have better control and operate more efficiently B.Receiving payment in U.S. dollars only *C.Standardizing certain marketing activities* D.Outsourcing most of their business E.Considering foreign direct investment
In _________, the government makes nearly all economy-related decisionslong dash—including who produces what and what the prices of products, labor, and capital will be
Centrally planned economy
Which of the following is NOT an ethical issue facing international companies?
Changing a nation's political system
The international product life cycle theory follows the path of a good through its life cycle in order to determine where it will be produced. Which of the following BEST defines the standardized product stage?
Competition pressures companies to lower prices in order to maintain sales levels.
Which of the following BEST describes an emerging economy?
Developed some (but not all) of their operations and export capabilities
Which of the following statements supports the opponents of globalization's viewpoint on its effect on income? Globalization increases income inequality among people within nations
Freer trade and investment allows international companies to close factories in high-wage, developed nations and cause income inequality
Which of the following is a treaty designed to promote free trade by reducing tariffs and nontariff barriers to international trade?
GATT
Which of the following was NOT a benefit of the General Agreement on Tariffs and Trade (GATT)?
GATT defined protection of intellectual property rights. B. GATT reduced average tariffs on merchandise trade. *C. GATT covered trade in services.* D. GATT lowered subsidies for agricultural products. E. GATT significantly improved the climate for trade
What is the name given to the trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies?
Globalization
India became attractive as a location for software-writing operations because of its low-cost, well-trained, English-speaking technicians. What is this an example of?
Globalization advancing developing nations' economies
What is any commercial transaction that crosses the borders of two or more nations?
International business
What are the benefits of doing business in a totalitarian nation?
International companies can be relatively less concerned with local political opposition to their activities.
Which of the following is the main issue raised by critics of globalization?
It eliminates jobs and lowers wages in developed nations
What is the major flaw of the original GATT, which led to the creation of the WTO?
Lacked the power to enforce world trade rules
Which of the following is claimed by supporters of globalization?
Openness of international trade increases production, wealth, and efficiency
What is the name for the selling of government-owned economic resources to private operators?
Privatization
When IBM USA sources computer materials from different locations around the world to reduce the cost of production, this is called ________.
globalization of production
Which of the following BEST describes the ideology of a centrally planned economy?
achieving economic equality
Opponents of globalization argue that freer trade and companies' continuous tendency to reduce costs has led companies to move into lower wage cost locations. This has resulted in ________
an increase in the wage gap between white-collar and blue-collar occupations in rich nations
Political economies of nations differ in the degree of openness, individualism, equality, transparency, and flexibility. Which of the following political economic systems stresses the primacy of the group over individual needs?
collectivism
iplc: 3. standardized product stage
competition from other companies selling similar products pressures companies to lower prices in order to maintain sales levels
The term ________ refers to an increase in the economic well-being, quality of life, and general welfare of a nation's people
economic development
The new trade theory states that companies' specialization and output increase because of gains in efficiency that lowers the unit cost of production. This is a benefit from ________.
economies of scale
Which of the following is NOT part of the World Trade Organization's (WTOs) mandate?
environmental protection
Multinational corporations do NOT ________.
few employees
Arguments against globalization state that ________.
gains to national economies are not worth the lost livelihoods of individuals
Arguments in favor of globalization state that ________.
globalization increases wealth and efficiency in both developed and developing nations
Globalization supporters argue that developing countries can boost incomes for its poorest citizens and reduce income inequality by ________.
integrating into the global economy
The main sources of political risk do NOT include ________.
international content requirements
________ says that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle
international product life cycle theory
Globalization's detractors say that ________
it homogenizes our world and destroys its rich diversity of cultures
Innovation in the shipping industry is helping globalize markets and production by ________.
making shipping more efficient and dependable
A nation's ability to enter into binding international agreements is referred to as having ________
national sovereignty
Why are embargoes rarely used today?
they are difficult to enforce
If we compare average incomes in high-income countries with average incomes in middle- and low-income nations, we find a ________ gap
widening