Deck 1: Globalization

Question 1

According to WTO data,the volume of world merchandise trade has grown faster than the world economy since 1950.

Answer 1

True

Question 2

According to the United Nations most changes between 1992 and 2005 to laws governing FDI have resulted in a less favorable environment for FDI.

Answer 2

False

Question 3

Efficiency gains associated with containerization have caused transportation costs to fall dramatically.

Answer 3

True

Question 4

One of the UN central mandates is the promotion of higher standards of living,full employment,and conditions of economic and social progress and development.

Question 5

The expansion of world trade implies that nations are becoming less dependent on each other for important goods and services.

Question 6

Outsourcing is a process that is limited to manufacturing enterprises.

Question 7

Moore's Law predicts that the power of microprocessor technology doubles and its cost of production falls by half every 18 months.

Question 8

Today global communication networks and global media are creating a worldwide culture.

Question 9

The most global markets currently are markets for industrial goods and materials that serve a universal need the world over.

Question 10

Declining barriers to cross-border trade and investment cannot be taken for granted.

Question 11

The majority of U.S.firms that export are large multinationals that employ 500 or more people.

Question 12

The notion that national economies are relatively self-contained entities is on the rise.

Question 13

In the period 1950-1990,the world GDP showed a consistent decline as opposed to the volume of exports.

Question 14

In the early 1960s,the United States was by far the world's dominant industrial power.However by 2006,it lost its dominant position and now,is no longer the world's largest industrial power.

Question 15

Underlying the trend towards greater globalization is technological change and a decline in barriers to the free flow of goods,services,and capital.

Question 16

During the period 1990 - 2000,the volume of total exports was more than twice the world GDP.

Question 17

The merging of historically distinct and separate markets into one huge global marketplace is known as the globalization of markets.

Question 18

Because of their nature,service activities cannot be outsourced to other companies.

Question 19

The shift toward a more integrated and interdependent world economy is referred to as globalization.

Question 20

The globalization of markets and production and the resulting growth of world trade,foreign direct investment,and imports all imply that firms are finding their home markets protected from foreign competitors.

Question 21

Today,the risks involved in doing business in countries such as Russia are low,but so are the returns.

Question 22

By 2008,the U.S.had seen its share of exports fall to almost half its share in the 1960s.

Question 23

Many economists,politicians,and business leaders believe that the shift toward a more integrated and interdependent global economy is a positive trend.

Question 24

Studies have shown that wage rates for unskilled workers in many advanced economies have fallen in recent years.

Question 25

Debt continues to be a major burden for poorer nations as they strive to get ahead.

Question 26

Supporters of debt relief argue that new democratic governments in poor nations should not be forced to honor debts that their corrupt and dictatorial predecessors incurred and mismanaged long ago.

Question 27

The antiglobalization effort is created and supported only by a small group of hard-core anarchists.

Question 28

A current trend in international business is the growth of medium-sized and small multinationals,known as mini-multinationals.

Question 29

According to forecasts,a further relative decline in the share of world output and world exports accounted for by the United States and other long-established developed nations is unlikely.

Question 30

An international business is any firm that engages in international trade or investment.

Question 31

The managers of an international business must decide whether it is ethical to adhere to the lower labor and environmental standards found in many less developed nations.

Question 32

In general,managing an international business is a more complex task than managing a business that serves only the local market.

Question 33

Recent evidence indicates that the solution to the problem of stagnant incomes among the unskilled is to be found in increasing society's investment in education to reduce the supply of unskilled workers.

Question 34

Critics of globalization suggest that over the last century,the gap between the rich and poor nations of the world has shrunken.

Question 35

According to critics of globalization,today's interdependent global economy limits a nation's national sovereignty.

Question 36

A source of concern of critics of free trade is that it usually encourages firms from advanced countries to move manufacturing facilities to less developed countries that lack adequate regulations to protect labor and the environment from abuse.

Question 37

If the free market reforms in China continue for two more decades,China may move from Third World status to industrial superpower status even more rapidly than Japan did.

Question 38

Some critics argue that outsourcing has caused wage rates of poorer Americans to fall significantly over the past quarter of a century.

Question 39

According to supporters of free trade,as countries get richer they enact tougher environmental and labor regulations.

Question 40

Current trends indicate that the world is moving rapidly towards an economic system that is more favorable for international business.

Question 41

Which of the following statements regarding cross-border trade and investment is not true?

A)"Protection" from foreign competitors has been,at times,demanded by the United States.
B)Forecasts indicate a return to the restrictive trade policies of the 1920s and 30s.
C)If trade barriers decline no further they will put a brake upon the globalization of both markets and production.
D)It is not clear whether the political majority in the industrialized world favors further reductions in trade barriers.

Question 42

Since 1980,the world's containership fleet has more than _____,reflecting in part the growing volume of international trade.

A)doubled
B)tripled
C)quadrupled
D)quintupled

Question 43

Since the collapse of communism at the end of the 1980s,the erstwhile communist nations have transformed their economies by encouraging all of the following except:

A)privatizing state-owned enterprises.
B)regulating markets.
C)increasing competition.
D)welcoming investment by foreign businesses.

Question 44

Which of the following is not characteristic of globalization?

A)National economies are turning into independent economic systems.
B)Material culture is starting to look similar the world over.
C)Perceived distance is shrinking due to advances in transportation and telecommunications.
D)Barriers to cross-border trade and investment are declining.

Question 45

Although the characteristics of the global economy have changed dramatically over the past 30 years,as late as the 1960s all of the following demographic characteristics were true,except:

A)the U.S.dominated the world economy.
B)small,U.S.entrepreneurial firms dominated the international business scene.
C)the U.S.dominated the world foreign direct investment picture.
D)roughly half the world was governed by centrally planned economies of the Communist world.

Question 46

In the U.S.,_____ percent of firms that export are small companies employing fewer than 100 people.

A)90
B)75
C)50
D)30

Question 47

At the Doha Round of the WTO in late 2001,

A)the WTO was established.
B)GATT was extended to include services.
C)world trade volume increased.
D)an agenda was established to phase out subsidies to agricultural producers.

Question 48

The ______ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states.

A)International Development Association
B)World Bank
C)International Court of justice
D)World Trade Organization

Question 49

The most global markets currently are markets for:

A)services.
B)consumer goods.
C)consumer durables.
D)industrial goods.

Question 50

The growing integration of the world economy is:

A)increasing the intensity of competition in a wide range of manufacturing and service industries.
B)decreasing the intensity of competition in manufacturing industries,and increasing the intensity of competition in services.
C)increasing the intensity of competition in manufacturing industries,and decreasing the intensity of competition in services.
D)narrowing the scope of competition in a wide range of service,commodity,and manufacturing industries.

Question 51

Identify the incorrect statement concerning globalization.

A)It has been blamed for unemployment in developed nations,environmental degradation and the Americanization of popular culture.
B)It has created new threats for businesses accustomed to dominating their domestic markets.
C)It is transforming industries and is highly welcomed by those who believed their jobs were protected from foreign competition.
D)According to most economists it is a very beneficial process where gains outweigh the losses by a wide margin.

Question 52

The reduction in the average tariff rates on manufactured products since 1950 implies all of the following except that

A)firms are dispersing parts of their production process to global locations to drive down production costs and increase product quality.
B)the economies of the world's nation states are becoming more intertwined.
C)nations are becoming increasingly independent of each other for important goods and services.
D)the world has become significantly wealthier since 1950.

Question 53

Identify the incorrect statement pertaining to the World Wide Web.

A)It makes it much easier for buyers and sellers to find each other.
B)Viewed globally,it is emerging as an equalizer.
C)It rolls back all of the constraints of location,scale,and time zones.
D)It allows businesses to expand their global presence at a lower cost than ever before.

Question 54

The institution,created in 1944 at Bretton Woods,responsible for maintaining order in the international monetary system is the

A)IMF.
B)WTO.
C)UN.
D)UNESCO.

Question 55

The _____ was created in 1944 by 44 nations that met in Breton Woods,New Hampshire to promote economic development.

A)World Bank
B)International Trade Center
C)World Trade Organization
D)United Nations

Question 56

Which of the following is not an impediment that makes it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe?

A)Reduced transportation costs.
B)Government regulations.
C)Issues associated with economic and political risk.
D)Barriers to foreign direct investment.

Question 57

Technological innovations have facilitated all of the following except:

A)globalization of production.
B)globalization of markets.
C)creation of electronic global marketplaces.
D)creation of absolutely homogeneous consumer markets.

Question 58

_____ occur(s)when a firm exports goods or services to consumers in another country.

A)International trade
B)Foreign direct investment
C)Inward investment
D)Merger and acquisitions

Question 59

Globalization has _____ the opportunities for a firm to expand its revenues by selling around the world and _____ its costs by producing in nations where key inputs are cheap.

A)reduced,reduced
B)increased,increased
C)increased,reduced
D)reduced,increased

Question 60

The _____ was established to remove barriers to the free flow of goods,services,and capital between nations.

A)UN
B)IMF
C)GATT
D)IDA

Question 61

By 2006 some 24 of the world's 100 largest non-financial multinationals were:

A)Chinese enterprises.
B)British enterprises.
C)U.S.enterprises.
D)Japanese enterprises.

Question 62

Which of the following observations concerning Latin American countries is true?

A)Complete restrictions on direct investment by foreign firms.
B)Characterized by low growth,high debt,and hyperinflation.
C)Debt and inflation are up compared to previous decades.
D)Substantial opportunities exist,but are accompanied by substantial risks.

Question 63

Which of the following statement pertaining to changes in the global economy of the 21^st century is not true?

A)Barriers to the free flow of goods,services,and capital have been coming down.
B)Volume of cross-border trade and investment has been growing more rapidly than global output.
C)National economies are becoming more independent and moving away from the global economic system.
D)As economies advance,more nations are joining the ranks of the developed world.

Question 64

According to World Bank numbers,

A)developing nations currently account for more than 60 percent of world economic activity.
B)rich nations currently account for more than 70 percent of world economic activity.
C)today's rich nations may account for 55 percent of world economic activity by 2020.
D)today's developing nations may account for more than 60 percent of world economic activity by 2020.

Question 65

Which of the following nation's world output has declined the least over the last 40 years?

A)France
B)United States
C)United Kingdom
D)Canada

Question 66

The share of the total FDI stock accounted for by which of the following countries increased markedly from 1980 to 2005?

A)United States
B)France
C)United Kingdom
D)Netherlands

Question 67

Which of the following statements pertaining to the changing demographics of world GDP and trade from 1963 to 2006 is not true?

A)As emerging economies continue to grow,a relative decline in the share of world output and world exports accounted for by the U.S.seems unlikely.
B)Forecasts predict a rapid rise in the share of world output accounted for by some developing nations.
C)A decline in the share enjoyed by rich industrialized countries such as Great Britain,Germany,Japan,and the U.S.is likely.
D)If current trends continue,the Chinese economy could be larger than that of the U.S.on a purchasing power parity basis.

Question 68

Which of these statements pertaining to cross-border FDI flows is true?

A)The growth of FDI resumed in 2004 and continued through 2006.
B)A surge in FDI from 1995 to 1997 was followed by a slump from 1998 to 2000.
C)Among developing nations,the largest recipient of FDI has been Russia.
D)The dramatic increase in FDI reflects the decreasing internationalization of business corporations.

Question 69

Critics of globalization maintain that the apparent decline in real wage rates of unskilled workers

A)owes far more to a technology-induced shift within advanced economies toward jobs that require significant education and skills.
B)is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers.
C)has been impacted most by technological change.
D)can be checked by increasing society's investment in education to reduce the supply of unskilled workers.

Question 70

What is the total cumulative value of foreign investments best referred to as?

A)Accumulation of foreign shares
B)Portfolio investments
C)Stock of foreign direct investments
D)Stock market investments

Question 71

Firms based in _____ accounted for 14.7 percent of the stock of foreign direct investment in 2007,up from only 1.1 percent in 1980.

A)Asia
B)developing countries
C)United Kingdom
D)NAFTA region

Question 72

Which of the following countries has been the largest recipient of foreign direct investment and received about $70 billion a year in inflows in 2005 and 2006?

A)Brazil
B)Russia
C)India
D)China

Question 73

If the critics of globalization are correct,all of the following things must be shown except:

A)the share of national income received by labor,as opposed to the share received by the owners of capital should have declined in advanced nations.
B)even though labor's share of the economic pie may have declined,living standards need not deteriorate if the size of the total pie has increased sufficiently to offset the decline in labor's share.
C)the decline in labor's share of national income must be due to moving production to low-wage countries,as opposed to improving production technology and productivity.
D)economic growth in developed nations has offset the fall in unskilled workers' share of national income,raising their living standards.

Question 74

In the 1970s,many Japanese firms invested in North America and Europe

A)to avoid a highly competitive domestic market.
B)to exploit high domestic tariff barriers.
C)as a hedge against unfavorable currency movements.
D)to take advantage of low labor costs.

Question 75

When a company "exports jobs" overseas,the company is:

A)helping domestic workers by pushing up wage rates.
B)increasing the demand of qualified domestic workers.
C)taking advantage of lower wages in foreign markets.
D)deceiving the supporters of globalization.

Question 76

Identify the incorrect statement regarding the former Communist nations of Europe and Asia.

A)The economies of most of the former Communist states are very strong and developed.
B)Many of the former Communist nations of Europe and Asia share a commitment to free market economies.
C)As a result of disturbing signs of growing unrest and totalitarian tendencies,the risks involved in doing business in these countries is very high.
D)For about half a century these countries were essentially closed to Western international business.

Question 77

Which of the following does not help create an economic system that is favorable to international business?

A)Decreased privatization
B)Widespread deregulation
C)Open markets
D)Falling trade and investment barriers

Question 78

A study by the OECD,whose members include the 20 richest economies in the world,noted all of the following except:

A)the gap between the poorest and richest segments of society in some OECD countries widened.
B)in almost all countries real income levels rose over the 20-year period studied.
C)falling unemployment rates brought gains to low-wage workers and fairly broad-based wage growth.
D)the gap between rich and poor had narrowed in all OECD countries.

Question 79

Before NAFTA was passed

A)Mexico agreed to establish a higher minimum wage.
B)the U.S.agreed to limit the number of jobs that could be exported to Mexico.
C)Mexico committed to tougher enforcement of environmental protection regulations.
D)Canada committed to establish new limits of FDI.

Question 80

Which of the following countries has had the maximum relative decline in its share of world output since 1963?

A)Canada
B)United States
C)Japan
D)Germany