Deck 1: Globalization

Question 1

In 1995, the government of Duyat, a country in Asia, began major economic reforms that allowed free trade relations with other countries. Duyat started exporting iron ore and limestone to other countries around the world. Its domestic market strengthened, and it experienced an economic boost. This scenario best exemplifies _____.

A) nationalization
B) subsidization
C) commodification
D) globalization

Answer 1

D

Question 2

Borivia is a country in Eastern Europe that was ruled by Auleria, a country in Western Europe, for over a century. It gained independence from Auleria in 1923. Now, Borivia has its own government. Given this information, it can be said that Borivia is a(n) _____.

A) monopoly
B) monarchy
C) sovereign nation
D) emerging market

Answer 2

C

Question 3

Imperial Inc., an Irish semiconductor manufacturer, sources germanium, a raw material used in the production of semiconductors, from China. It takes advantage of differences across countries by treating them as business opportunities. This scenario best exemplifies _____.

A) arbitrage
B) privatization
C) franchising
D) licensing

Answer 3

A

Question 4

Nebula Inc. is an American smartphone manufacturer that sells smartphones in 36 countries across the globe. Nebula makes both low-end and high-end smartphones to cater to the needs of different markets across the world. There is a high demand for Nebula's low-end smartphones chiefly in developing nations. Its high-end smartphones have buyers mostly in developed nations. One of the challenges that Nebula faces is planning its sales strategy to suit different markets. Given this information, it can be said that Nebula's smartphones are an example of _____.

A) natural products
B) perishable products
C) consumer products
D) industrial products

Question 5

When the demand for smartphones increased in Preteresia, a country in Eastern Europe, the smartphone manufacturers started importing silicon, a raw material used in the manufacture of smartphones, from Abresia, a country in Africa. In return, Preteresia helped build Abresia's infrastructure to facilitate the efficient extraction of silicon. This scenario best illustrates _____.

A) monopolization
B) centralization
C) market segmentation
D) global convergence

Question 6

Which of the following examples best illustrates the globalization of production?

A) Silva Hotels & Resorts, a Brazilian hotel chain, provides hospitality services to tourists from all around the world.
B) Taupe, an Australian non-profit organization, is funded by Australian multinational companies.
C) Hazel Inc., an Irish textile company, engages in corporate social responsibility.
D) Tanner Inc., an American publishing company, outsources writing services to India.

Question 7

Desktop computers are used by people all around the world. One of the challenges faced by computer manufacturing companies is to overcome the cultural and economic differences across communities that make it difficult for them to sell their products. Given this information, it can be said that desktop computers are _____.

A) industrial products
B) consumer products
C) natural products
D) perishable products

Question 8

The Commerce Coalition (CC) is an intergovernmental organization operating in South Asia that consists of seven member nations. The CC was established to enable free trade across these seven countries of South Asia. A citizen of any of the member nations can easily purchase goods produced in another member nation without paying additional taxes. Given this information, it can be said that the large market created by the CC is an example of a(n) _____.

A) monopolistic market
B) globalized market
C) oligopolistic market
D) gray market

Question 9

Which of the following is true of arbitrage?

A) It is limited to manufacturing.
B) It involves searching for deals on production factors across geographic boundaries.
C) It treats differences across nations as constraints.
D) It involves obtaining land, labor, and capital from domestic markets.

Question 10

Spain and Italy are both members of the European Union. Nayeli, a Spaniard, is able to purchase Italian-made bags from a handbag store in Spain without paying additional taxes. The market created by the European Union is a(n) _____.

A) monopolistic market
B) oligopolistic market
C) gray market
D) globalized market

Question 11

Which of the following is true of globalization of production?

A) It includes obtaining land, labor, and capital locally.
B) It includes the component parts, skill sets, or information required to produce a product or service.
C) It is limited to manufacturing.
D) It helps companies take advantage of national differences in cost and quality.

Question 12

Which of the following best illustrates global convergence?

A) Sylvester Inc., an American car-manufacturing company, uses the Japanese business philosophy of kaizen.
B) Hexagon Corp., a steel company in the United States, has many plants in different parts of the country.
C) Hawke Inc., an American computer manufacturer, imports raw materials from Nigeria, and in return it invests in Nigeria's infrastructure development.
D) Micra Inc., an Indian mining company, engages in corporate social responsibility by providing training services to local schools.

Question 13

Niall is an assembly-line worker in a car-manufacturing firm in Detroit. Assembly-line workers like Niall constitute the _____ of the car-manufacturing firm.

A) visible artifacts
B) intangible resources
C) factors of production
D) economies of scale

Question 14

Which of the following is true of globalization?

A) It makes it difficult to buy and sell internationally.
B) It increases socioeconomic equality in emerging markets.
C) It makes it difficult for employers to move jobs to cheaper locations.
D) It builds on the principle of sovereignty to strengthen the relationships that connect us.

Question 15

Steel manufacturers use limestone as one of the raw materials in the production of steel. It can be said that limestone is a(n) _____.

A) industrial product
B) convenience product
C) unsought product
D) specialty product

Question 16

Which of the following is an effect of the Internet on globalization?

A) It triggered billion-dollar investments in fiber-optic telecommunications cables.
B) It led to the demise of traditionally local businesses.
C) It inhibited free trade.
D) It increased the barriers to competition.

Question 17

According to author Thomas Friedman, which of the following is true of the flat world?

A) Ten percent of activity is conducted globally, and the remaining ninety percent is conducted domestically.
B) The few cities that dominate international financial markets-Frankfurt, Hong Kong, London, New York, Singapore-represent the peak of global integration.
C) Most of the world's cities are much more connected at the local level than they are to any other domestic city, and more connected domestically than to any foreign city.
D) Individuals in poor countries with limited infrastructure are able to compete with people in rich, well-developed countries.

Question 18

Russet Inc., an American stainless steel manufacturer, sources iron ore from Australia for the manufacture of steel. It saves on raw material costs as iron ore is cheaper in Australia. This scenario best illustrates _____.

A) the globalization of production
B) the economies of scope
C) vertical integration
D) market segmentation

Question 19

Limestone, shells, and chalk are some of the raw materials used in the manufacture of cement. Raw materials like these constitute the _____ of the cement industry.

A) factors of production
B) visible artifacts
C) intangible resources
D) economies of scale

Question 20

Dasom Inc., a South Korean smartphone manufacturer, sells its smartphones in 64 countries around the world and has offices in 36 counties. Dasom's business expansion best exemplifies _____.

A) globalization
B) nationalization
C) subsidization
D) commodification

Question 21

Which of the following is true of the General Assembly?

A) Resolutions agreed upon by the General Assembly are binding.
B) It meets during yearly sessions to discuss issues and vote on resolutions.
C) The World Bank is the parent organization of the General Assembly.
D) It is located in The Hague, the Netherlands.

Question 22

Which of the following best illustrates a multilateral organization?

A) Tanner Inc., an American publishing company, outsources writing services to India.
B) Silva Hotels & Resorts, a Brazilian hotel chain, provides hospitality services to tourists from all around the world.
C) Universal Trade Forum, an organization that fosters international trade, is funded and managed by representatives from several governments.
D) Cherish Inc., an American apparel brand, has branches in 42 countries around the world.

Question 23

Imagine that Belseria, a developing country in South America, recently became a member of a multilateral organization that works toward preventing war by promoting economic development in poor countries. The organization assists poor countries in building their infrastructure by providing them with heavily subsidized loans. Given this information, it can be said that Belseria most likely became a member of the _____.

A) World Trade Organization
B) International Monetary Fund
C) World Bank
D) Red Cross

Question 24

Maya Inc., an Indian apparel company, now sells its apparels in the United States, Canada, Australia and New Zealand. Derek, the CEO of Maya Inc., believes that free access to markets, few barriers to competition, and uniform trade regulations have enabled Maya Inc. to expand its business operations internationally. Derek's beliefs are consistent with Thomas Friedman's theory of the _____.

A) round world
B) spiky world
C) divided world
D) flat world

Question 25

Bianca is a student of international business at the University of Phoenix. She is of the opinion that the world is not fully connected. She believes that the global financial markets are controlled only by a few cities and that most businesses still operate in domestic markets. Bianca's views are consistent with the _____ argument.

A) flat world
B) round world
C) spiky world
D) coherent world

Question 26

Which of the following is true of the United Nations?

A) It was established as a way to get countries to resolve their differences through diplomacy, with the goal of maintaining and promoting global peace.
B) It provides heavily subsidized loans to poor governments in an effort to help them build infrastructure such as roads, the private sector, and public utilities.
C) It ensures that international trade runs freely and fairly between countries and that member nations impose the minimal number of restrictions on each other.
D) It is funded by over 1,000 member companies, typically multinational corporations with more than $5 billion in revenue.

Question 27

Dustin is a lecturer at a community college in Memphis. He believes that the globalization of markets has brought the world closer. He asserts that globalization has enabled free access to markets with less barriers to competition and uniform implementation of trade laws. Dustin's beliefs are consistent with the theory of the _____ put forth by the author Thomas Friedman.

A) flat world
B) round world
C) spiky world
D) divided world

Question 28

Imagine that Maretia is a country in Eastern Europe that recently joined the World Trade Organization (WTO). As a member of the WTO, Maretia is required to:

A) impose a high number of trade restrictions on other WTO members.
B) accept the obligations of the Charter of the United Nations.
C) first ratify the WTO regulations in an international parliament.
D) uphold the multilateral trading system.

Question 29

According to critics of globalization, _____.

A) new technologies and the investment of foreign capital in developing countries may actually increase levels of inequality
B) as countries trade and do business with one another, they make products and services more expensive
C) globalization in developed markets makes it difficult for employers to move jobs to cheaper locations
D) globalization decreases the rate of development for lifesaving devices and medicines that improve living conditions

Question 30

Identify a true statement about the World Trade Organization.

A) It came about as a result of negotiations in the 2000s.
B) It was established to rescue countries from financial crises.
C) It ensures that member nations impose the minimal number of restrictions on each other.
D) It focuses on preventing war by promoting economic development in poor countries.

Question 31

According to Amartya Sen, a Nobel Prize-winning economist, globalization:

A) has enriched the world scientifically and culturally.
B) perpetuates inequality throughout the world.
C) has economic repercussions.
D) has led to the advent of the "round world."

Question 32

Which of the following best defines the 10% presumption?

A) Only about 10 percent of products produced in the United States are industrial products; the remaining 90 percent are consumer products.
B) Only about 10 percent of the world's organizations are multilateral; the remaining 90 percent are bilateral.
C) Only about 10 percent of countries are sovereign nations; the remaining 90 percent are not sovereign.
D) Only about 10 percent of activity is conducted globally; the remaining 90 percent is domestic.

Question 33

Cora, an American citizen, is a critic of globalization. She believes that globalization has done more harm than good. She contends that globalization has detrimental effects on developed markets. Which of the following statements supports her contention?

A) Globalization has increased wage-related expenses.
B) Globalization has decreased the rate of development for lifesaving devices.
C) Globalization makes products and services expensive.
D) Globalization makes it easy for employers to move jobs to cheaper locations.

Question 34

Sean, a lecturer at Oxford University, is a staunch advocate of globalization. He asserts that globalization has benefited many people scientifically, culturally, and economically. Which of the following statements supports his assertion?

A) As a result of globalization, 90 percent of all business investments are domestic.
B) As a result of globalization and the spread of new technologies, levels of socioeconomic inequality have decreased.
C) Globalization makes lifesaving devices, medicines, and technologies more readily available to the greater world population.
D) Globalization helps developed markets by making it easy for employers to move jobs to cheaper locations.

Question 35

Which of the following is true of the International Monetary Fund?

A) It provides heavily subsidized loans to poor governments in an effort to help them build infrastructure such as roads, the private sector, and public utilities.
B) It ensures that international trade runs freely and fairly between countries and that member nations impose the minimal number of restrictions on each other.
C) It audits national trade policies, oversees trade agreements, and helps developing countries create trade policy.
D) It is often considered a "lender of last resort" to nations whose economies are in trouble and whose currencies are losing value.

Question 36

Literia, a country in Asia, is experiencing a financial crisis. Its currency has lost much of its value, and the country's currency reserves are depleting. In this scenario, which of the following multilateral organizations is most likely to provide loans to Literia to rescue it from its financial crisis?

A) The International Monetary Fund
B) The World Bank
C) The United Nations
D) The World Trade Organization

Question 37

Sanctity is a non-profit group that works toward increasing female literacy globally. It strives to promote women's education in developing nations. Its members are engaged in providing training and advisory services to schools and colleges in developing nations. Sanctity is funded and managed by several governments worldwide. Given this information, it can be said that Sanctity is a _____.

A) sole proprietorship
B) limited liability company
C) multilateral organization
D) multinational corporation

Question 38

Imagine that Deslank, a developing county in Western Africa, recently became a member of a multilateral organization that was set up in the 1990s. To become the organization's member, Deslank had to ratify the organization's regulations in its own parliament. As a member nation, Deslank can now have free trade agreements with other member nations. Given this information, it can be said that Deslank most likely became a member of the _____.

A) International Trade Organization
B) World Trade Organization
C) World Trade Center
D) World Fair Trade Organization

Question 39

Which of the following is true of the World Trade Organization?

A) It was established to rescue countries from financial crises.
B) It came about as a result of negotiations in the 1990s.
C) It focuses on preventing war by promoting economic development in poor countries.
D) It is considered a "lender of last resort" to nations whose economies are in trouble.

Question 40

According to Nobel Prize-winning economist, Joseph Stiglitz, globalization:

A) has led to the advent of the "flat world."
B) benefits many people around the world economically.
C) perpetuates inequality throughout the world.
D) has enriched the world scientifically and culturally.

Question 41

Hexagon Inc. is a small advertising start-up with a global presence. It relies on LinkedIn to find talent and uses social media to conduct its day-to-day business operations. Its staffing costs are low. Given this information, it can be said that Hexagon Inc. is most likely a _____.

A) sole proprietorship
B) limited liability partnership
C) multilateral organization
D) micro-multinational corporation

Question 42

One of the factors that help identify an emerging market is:

A) a "catching-up" level of growth.
B) the presence of many rich consumers.
C) a high level of economic stability.
D) a high degree of globalization.

Question 43

Events in countries worldwide now have long-reaching, long-lasting effects-even for people who never visit those countries. Justify this argument using the example of Brazil, Russia, India, and China.

Question 44

Which of the following is true of the G20?

A) It operates with a permanent secretariat or staff.
B) It consists of finance ministers and central bank governors of the 19 largest economies in the world.
C) Its chair rotates quarterly among the members and is responsible for hosting the quarterly summit.
D) It consists of representatives from the International Monetary Fund and the World Bank.

Question 45

Which of the following is the aim of the G20 head-of-government summits?

A) To maintain and promote global peace
B) To ensure that international trade runs freely and fairly between countries
C) To coordinate financial and monetary policies to respond to financial crises
D) To improve public-private cooperation

Question 46

Asmaris is a developing nation in Africa. Its government recently formulated a free trade policy and opened doors to foreign investment in the country. Abdu, an economist, believes that Asmaris is now an emerging market. Which of the following statements supports Abdu's argument that Asmaris is an emerging market?

A) The citizens of Asmaris have an intermediate income level.
B) Asmaris has a high degree of globalization.
C) Asmaris has a high level of economic stability.
D) The average economic growth of Asmaris is around 2 percent/year.

Question 47

Behati, a Kenyan citizen, has been selected to represent Kenya at the United Nations (UN). Her speech is related to one of the issues that is central to successful globalization. This issue is also the central mandate of the UN. Which of the following is Behati's speech most likely to address?

A) How to rescue countries from financial crises
B) How to ensure that international trade runs freely and fairly between countries
C) How to increase the standard of living and reinforce human rights throughout the world
D) How to prevent war by promoting economic development in poor countries

Question 48

Which of the following is a difference between developed markets and emerging markets?

A) Developed markets have economic policies of open trade and free markets, whereas emerging markets have economic policies that restrict open trade and free markets.
B) Developed markets have an intermediate income level among citizens, whereas emerging markets have a low income level among citizens.
C) Developed markets experience average economic growth of around 2 percent/year, whereas emerging markets experience economic growth of at least 4 percent/year.
D) Developed markets have high levels of economic activity, whereas emerging markets have low levels of economic activity.

Question 49

Identify an example of an emerging market.

A) Mercau, a country in Europe, experiences average economic growth of around 2 percent/year.
B) Dirteria, a country in Africa, has economic policies that restrict foreign investment.
C) Bazula, a country in South America, has consumers with a high income level.
D) Admenia, a country in Asia, has largely untapped markets with high levels of economic activity.

Question 50

Shane works for a non-profit organization that caters to corporations and nongovernmental organizations worldwide. Shane is part of the team that provides training services to the Indian Red Cross Society. Given this information, it can be said that Shane most likely works for the _____.

A) World Trade Organization
B) Global Business School Network
C) World Economic Forum
D) United Nations

Question 51

Ervetia is a country in Europe, which has recently adopted a new economic policy. The government of Ervetia has now opened doors to foreign investments and free trade relations with other countries. The number of private companies in Ervetia has also started increasing at a fast pace. Given this information, it can be said that Ervetia is most likely a(n) _____.

A) emerging market
B) frontier market
C) developed market
D) prediction market

Question 52

Which of the following is an example of a multinational corporation?

A) Sable, a non-profit organization, is funded by countries from all over the world.
B) Educruz, a non-profit organization, provides advisory services to business schools in the developing world.
C) Falcon Inc., a German automaker, has extensive facilities and staff in 48 nations worldwide.
D) Teal Inc., an Irish steel company, imports iron ore from China.

Question 53

Which of the following is an example of an emerging market?

A) Mercau, a country in Europe, experiences average economic growth of around 2 percent/year.
B) Breulik, a country in Africa, has formulated political policies that support free trade and private ownership.
C) Bazula, a country in South America, has consumers with a high income level.
D) Sehkiztan, a country in Asia, has markets with low levels of economic activity.

Question 54

Which of the following is an example of a multinational corporation?

A) Sable, a non-profit organization, is funded by countries from all over the world.
B) Educruz, a non-profit organization, provides advisory services to business schools in the developing world.
C) Teal Inc., an Irish steel company, imports iron ore from China.
D) Crayola Inc., an American smartphone company, operates in 36 countries across the globe.

Question 55

Aramis Inc. is a small Canadian software firm that develops online learning platforms for clients across the globe. It has operations in Australia and New Zealand. It increasingly uses technology tools to communicate and coordinate its activities. It has easy access to talent, and its staffing costs are low. Given this information, it can be said that Aramis Inc. is most likely a _____.

A) sole proprietorship
B) limited liability partnership
C) micro-multinational corporation
D) multilateral organization

Question 56

Which of the following is an example of a micro-multinational corporation?

A) Teal Inc., an Irish steel company, imports iron ore from China.
B) Turquoise Inc., a beverage company, has a highly centralized organizational structure.
C) Tatum Corp., an e-commerce start-up, uses social media to recruit employees from around the world.
D) Educruz, a non-profit organization, provides advisory services to business schools in the developing world.

Question 57

Caleb is a senior journalist. He is a member of an independent non-profit organization that works toward improving the state of the world through public-private cooperation. The members of the organization meet annually in the Swiss mountain resort of Davos to discuss issues related to gender equality, geopolitics, the future of the Internet, global talent gaps, global financial systems, and other business-related topics. Given this information, it can be said that Caleb is a member of the _____.

A) United Nations
B) G20
C) Global Business School Network
D) World Economic Forum

Question 58

Mira is an economics professor. She is a critic of the World Economic Forum (WEF). She believes that the "Davos man" is globally connected, but he is out of touch with his own people. Which of the following statements supports Mira's belief?

A) Elitist positions of the WEF are not representative of the majority of the world's population.
B) The WEF does not address issues related to gender equality.
C) The WEF does not have its foundation in business.
D) Most of the objectives of the WEF are conflicting with the objectives of other global groups.

Question 59

Which of the following is one of the reasons why the United States and other developed countries no longer dominate the global market the way they once did?

A) The ease of becoming a multinational
B) The political policies of developed markets
C) The increasing price of products and services
D) The increasing presence of new technologies

Question 60

Justify the argument that we don't live in a perfectly flat world.

Question 61

It has been argued that the World Economic Forum's (WEF's) elitist, "Davos man" mentality does little to represent the interests of the general populace. Evaluate this argument.

Question 62

According to you, is globalization a positive or negative change? Give reasons to support your answer.