Inter bis chapter 1
What is implied by the fact that in today's marketplace, the volume of world trade has been growing faster than world GDP?
The economies of the world's nation-states are becoming more intertwined.
A macro factor underlying the trend toward greater globalization is the
dramatic developments in information processing and other technologies.
One result of the Uruguay Round was
enhanced protection for patents, trademarks, and copyrights.
The main goal of GATT was to
reduce trade barriers.
One advancement that has lowered the barriers many small firms face when building international sales is
the Internet.
While the lowering of trade barriers made globalization of markets and production a theoretical possibility, what has made it a tangible reality?
the advances in communication, information processing, and transportation technologies
Growing income inequality between the skilled and unskilled workers in advanced nations, such as the United States, is a result of the
wages for skilled workers being bid up by the labor market and the wages for unskilled workers being discounted.
The WTO arbitrates trade disputes between its member states. What is one power of particular interest that the WTO can use?
It can issue a ruling instructing a member-state to change trade policies that violate GATT regulations.
Sanjay purchased a computer for $500 in 2018. Compared to the $900 computer that he purchased in 2011, the new one seems better in terms of the price he has paid and the power of the microprocessor technology. This is best explained by
Moore's law.
Which of these companies is taking advantage of the globalization of production?
Seamless Fabrics, an American textile manufacturer, buys fabric from France and exports it to India for garment production.
Econometric studies show a hump-shaped relationship between income levels and pollution levels. Which of these statements reflects that relationship?
As an economy grows and income levels rise, initially pollution levels also rise.
Which scenario best demonstrates foreign direct investment?
Domesticity, a U.S.-based office furniture company, has set up its own assembly plant in Japan to cater to the needs of the Asian market.
Which statement reflects the changing demographics of the global economy?
U.S. dominance in export markets has waned as Japan, Germany, and a number of newly industrialized countries have taken a larger share of world exports.
Xavier is the executive general manager of a U.S.-based multinational corporation. Midge is a manager in a similar position but works for an American company that operates only in the U.S. and does not engage in international business. In this context, which business function will be most typically exclusive to Xavier?
choosing an appropriate mode for entering a particular foreign country
When trade barriers began to fall, what was the motivation for much of the foreign direct investment by non-U.S. firms?
desire to disperse production activities to optimal locations
According to the UN Charter, one of the four purposes of the UN is to
develop friendly relations among nations.
Morning Fresh Skin Care, a U.S.-based beauty products manufacturer, has set up a manufacturing plant in Hong Kong. This is an example of
foreign direct investment.
Simpson Manufacturing produces high-end kitchen appliances and currently sources component parts for these machines from fifteen different companies around globe. They use these sources to take advantage of lower costs. This demonstrates the idea of
globalization of production.
When compared to the past, the gap between rich and poor nations today has
gotten bigger.
Opponents to globalization believe that when U.S. companies outsource service activities, such as call centers, to a lower-cost foreign supplier, it results in
higher unemployment in wealthy advanced economies such as the United States.
UN-sponsored talks concerning the reduction of carbon dioxide emissions has resulted in
little success in achieving goals for reducing carbon emissions.
Globalization critics argue that the decline in unskilled wage rates in advanced economies is due to the
migration of low-wage manufacturing jobs offshore.
Christian bought his son, Eric, a computer two years ago. Recently, he decided to buy his daughter, Brigette, a computer of her own. When applying Moore's Law to the two-year gap between the purchase of the computers, it is most likely that
the microprocessor in Brigette's computer would be more advanced in terms of power than that of Eric's.
The outward stock of foreign direct investment refers to
the total cumulative value of foreign investments by firms domiciled in a nation outside of that nation's borders.
A supporter of globalization would agree that
tougher environmental regulations ultimately result in economic progress.
