Question 1

Although many companies have lowered their overall cost structure and have improved the quality of their products by dispersing their production activities to locations around the world, this activity is confined primarily to large firms.

Accepted Answer

Many small and medium-sized enterprises (SMEs) also engage in dispersing their production activities globally to benefit from lower costs and improved product quality, leveraging globalization and technological advancements to compete more effectively.

Question 2

Any firm that engages in international trade or investment is an international business.

Accepted Answer

This statement is true. Any firm that engages in international trade or investment is considered an international business, as it is involved in economic activities across international borders.

Question 3

In addition to reducing trade barriers, many countries have also been progressively removing restrictions on barriers to foreign direct investment.

Accepted Answer

Many countries have been reducing restrictions on barriers to foreign direct investment to encourage more foreign investment in their economies.

Question 4

Describe the concept of globalization.What are the major opportunities and challenges that globalization has created for business organization?

Accepted Answer

The answer of Describe the concept of globalization.What are the...

Question 5

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

Accepted Answer

Industrial goods and materials such as steel, petroleum, and chemicals serve a universal need in industries such as construction, manufacturing, and energy production. These markets have a global reach and demand, making them the most global markets currently.

Question 6

There is very little evidence that suggests that the lowering of trade barriers has facilitated the globalization of production.

Accepted Answer

The statement is incorrect. There is ample evidence that the lowering of trade barriers, such as tariffs and quotas, has facilitated the globalization of production by allowing companies to access foreign markets with greater ease and lower costs.

Question 7

The advanced nations of the East committed themselves after World War II to removing barriers to the free flow of goods, services, and capital between nations.

Accepted Answer

After World War II, it was primarily Western nations, particularly those in North America and Western Europe, that committed themselves to removing barriers to the free flow of goods, services, and capital between nations. This was part of the broader effort to establish a liberal international economic order. Eastern nations, especially those under Soviet influence, were more inclined towards economic policies that emphasized state control and were less open to free trade.

Question 8

Surprisingly, despite the importance of technology in our everyday lives, technological change has played only a minor role in the globalization of markets.

Accepted Answer

Technological change has played a significant role in the globalization of markets by enabling efficient communication, production, and transportation of goods and services across borders. Without technological advancements, it would not have been possible for companies to operate on a global scale with such ease and speed.

Question 9

The International Monetary Fund (IMF) is often seen as the leader of last resort to nation states whose economies are in economic turmoil.

Accepted Answer

This is a commonly held view of the role of the IMF, as it has provided financial assistance and policy advice to countries experiencing economic crises.

Question 10

Many of tomorrow's economic opportunities may be found in the developing nations of the world.

Accepted Answer

Developing nations have potential for economic growth and innovation, as their markets are often untapped and their populations are growing. Additionally, technological advancements have made it easier for businesses to operate in these countries.

Question 11

Most forecasts now predict a rapid rise in world output accounted for by developing nations such as China, India, and South Korea, and a rapid decline in the share enjoyed by rich industrialized countries such as Canada, Britain and the United States.

Accepted Answer

This statement accurately reflects the current trends in global economic growth and development. Developing nations, particularly in Asia, have been experiencing rapid economic growth in recent years, while many developed countries have struggled to maintain their levels of output.

Question 12

As markets globalize and an increasing proportion of business activity transcends national borders, there is a need for institutions to help manage, regulate and police the global market place.

Accepted Answer

With the increasing globalized markets, the need for global institutions to regulate and police the marketplace has become necessary. These institutions can help to manage and oversee business activities that transcend national borders, ensuring fair trade practices and protecting consumers.

Question 13

Although most international trade and investment is still conducted by large firms, small to medium sized firms are increasingly involved in international trade and investment.

Accepted Answer

The statement is true. Small to medium sized firms are playing an increasing role in international trade and investment.

Question 14

In the 1960s global business activity was dominated by large Japanese multinational corporations.

Accepted Answer

While Japan did experience significant economic growth and the rise of several large corporations during the 1960s, global business activity was still dominated by companies from the United States and Europe. The Japanese multinational corporations became more prominent in the 1970s and 1980s.

Question 15

The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire.

Accepted Answer

Both the International Monetary Fund and the World Bank were indeed created at the Bretton Woods Conference in 1944 by representatives from 44 countries.

Question 16

The stock of foreign direct investment refers to the total cumulative value of foreign assets in a country.

Accepted Answer

The stock of foreign direct investment (FDI) is the total amount of foreign investment held in a country at a given point in time. So, the statement is true.

Question 17

The volume of world output has grown faster than the volume of world trade since the 1950s, according to data from the World Trade Organization.

Accepted Answer

Since the 1950s, the volume of world trade has generally grown at a faster pace than the volume of world output, reflecting increased globalization and economic interdependence among nations.

Question 18

General Agreement on Tariffs and Trade is what the acronym GATT stands for.

Accepted Answer

The acronym GATT stands for General Agreement on Tariffs and Trade.

Question 19

It is commonly believed that globalization stimulates economic growth, creates jobs, and raises income levels.

Accepted Answer

Globalization involves the integration of economies through trade, investment, and technology. This integration can lead to increased trade which can stimulate economic growth, create jobs, and raise income levels. However, the impact of globalization on these factors can vary depending on a variety of factors such as the level of development of the countries involved and the policies implemented.

Question 20

Economists argue that increased international trade and cross-border investments will result in higher prices for goods and services, although there are many benefits to globalization.

Accepted Answer

Economists generally argue that increased international trade and cross-border investments result in lower prices for goods and services due to increased competition and economies of scale. However, there may be specific instances where prices increase due to factors such as supply chain disruptions or tariffs. Overall, the benefits of globalization often outweigh any potential drawbacks.

Quiz 1: Globalization