MGT 302: Chapter 1

Which of the following is a challenge faced by companies entering the global market?

Differences in consumer tastes and preferences

_____ refers to the shift toward economic international integration.

Globalization

What is a benefit of the internet?

It makes it easier for buyers and sellers to connect.

Which of the following statements is TRUE about 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 one of the following statements is TRUE about microprocessors?

They're able to decode a vast amount 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 global institution was established on October 24, 1945 and one of its key purposes is to maintain international peace and security?

United Nations

Through the 1960s, which country dominated world foreign direct investment?

United States

The trade agreement called the _____, finalized in December 1993, established the World Trade Organization to police the international trading system.

Uruguay Round

In terms of international business, which of the following statements accurately describes Latin America?

While favorable economic trends have recently occurred, there is no guarantee that they will continue.

Which of the following organizations is responsible for policing the rules of trade between nations and making sure countries adhere to the rules of trade treaties?

World Trade Organization

Critics of globalization point out that free trade

allows firms to abuse the weak labor and environmental laws in developing countries.

When high tariffs are placed on imported manufactured goods,

an increase in trade barriers results.

While U.S. firms accounted for about two-thirds of foreign direct investment in the 1960s, as of 2017, U.S. firms account for _____.

around 25%

Moore's Law predicts that

computer power will double approximately every 18 months.

At the shipping port in Charleston, South Carolina, the large shipping boxes that arrive on super freighters from Indonesia are unloaded directly onto a train car for transport within the United States. This demonstrates how _____ has simplified the transport of products from one mode of shipping to another.

containerization

What are the four purposes of the United Nations according to its charter?

cooperate in solving international problems, be a center for harmonizing the actions of nations, maintain international peace and security, and develop friendly relations among nations

Supporters of globalization say that critics do not understand that the benefits of free trade outweigh the

costs.

Due to globalization, firms follow each other around the world, thereby

creating some uniformity across markets.

As figures for 2017 reflect, the globalization of the world economy has resulted in a relative _____ in the dominance of U.S. firms in the global marketplace.

decline

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

decline in trade barriers and technological change

Distribution of production to separate locations has become more economical for companies because transportation costs have _____.

declined

Creating and managing a globally dispersed production system is facilitated by the _____ costs of information processing and communication.

decrease in

Opponents of globalization are concerned that manufacturing jobs will be moved to more _____ countries.

developing

Critics of globalization protest in order to

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

The opponents of globalization argue that falling barriers to international trade

eliminate manufacturing jobs in wealthy economies.

In return for offering loans, the International Monetary Fund (IMF)

enforces its economic policies on nations.

International trade occurs when a company

exports goods or services to consumers in another country.

Influential economists, politicians, and business leaders who favor globalization argue that

falling barriers to international trade drive the economy toward greater prosperity.

The G20 is compromised of _____ from the 19 largest economies in the world.

finance ministers

Marilyn's U.S.-based shoe company has decided to invest in a British company that specializes in clasps and buckles. This would be an example of

foreign direct investment.

The stock of foreign direct investment has _____ in the United States, China, Japan, and the United Kingdom since 1995.

increased

Boeing's rationale for outsourcing so much production to foreign suppliers is based on which two of the following factors, according to the text?

increasing the chance to win significant orders from airlines in those countries and using suppliers that are the best in the world at a particular activity

Select the four reasons that explain why managing an international business is different from managing a purely domestic business.

international business must work within government limits, countries are different, the range of problems in international business is wider, and international transactions involve converting money into different currencies

What are three examples of factors of production?

land, capital and labor

During the early years of globalization, outsourcing was primarily confined to _____ activities.

manufacturing

The problems faced while managing an international business are _____ those faced while managing a purely domestic business.

more complex than

As international trade expands, the economies of the world's nation-states are becoming _____.

more intertwined

As the barriers to the free flow of goods, services, and capital fell during the 1970s, one motivation for foreign direct investment by non-U.S. firms was the desire to

move production activities to more desirable locations.

The number of mini-multinationals involved in international trade and investment is _____.

rising

In terms of transportation technology, the development of _____ has effectively reduced the size of our world, hence simplifying the transshipment from one mode of transportation to another.

superfreighters and commercial jets

While the lowering of barriers to trade made globalization a theoretical possibility, it wasn't until the introduction of _____ that it became a reality.

technological change

The presence of McDonald's in Tokyo, the opportunity to easily buy iPads in Rio and Berlin, and the ready availability of Gap jeans in Paris as well as San Francisco are examples of

the emergence of global markets for consumer products.

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

the globalization of markets

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

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

Supporters of globalization suggests that a solution to the problem of slow real income growth among unskilled workers is _____ society's investment in education.

to increase

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 text lists several reasons that stand out as the cause for economic stagnation in the world's poorest countries, including which three of the following?

prolonged civil war, poor property rights protection, and totalitarian governments

What are the two implications that are derived from the fact that the volume of world trade has been growing faster than world GDP?

the world has become significantly wealthier in recent decades and more companies are dispersing production processes to different locations around the globe

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

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

From the 1990s until today, foreign direct investment inflows can be best described as

surging and slumping.

Current trends indicate that, due to the emerging economies, the world is moving _____ an economic system that is more favorable for international business.

closer to

The International Monetary Fund (IMF) has been criticized for

compromising the jurisdiction and decision-making powers of the receiving country.

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

Over the past 20 years, more countries have been _____ barriers to foreign direct investment.

removing

Which of the following is a concern voiced by critics of globalization?

An interdependent global economy shifts economic power away from national government and toward organizations such as the United Nations.

Which environmental concern has been found to rise steadily with higher-income levels?

Carbon dioxide emissions

As of 2017, _____ has the highest percentage of world exports of goods and services.

China

Which country has been the world's largest exporter since 2009?

China

Which of the following describes the impact of existing impediments to globalization?

The impediments make it difficult for companies to maximize production activities.

James works at a lawn mower manufacturing company in St. Louis, Missouri, and his company imports component parts from Thailand and also ships final product to various countries. James's company is an example of a(n) _____ business.

international