BEC 5 M6: Impact of Globalization

Question 1

globalization is often measured using

Answer 1

world trade growth as a percentage of GDP

Question 2

globalization is frequently associated with:

Answer 2

1. comparative advantage

2. increased specialization

Question 3

globalization is made possible by

Answer 3

1. reduced transportation costs
2. technological advancements including improved communications
3. deregulation of international financial markets

Question 4

concept of a global economic balance of power

Answer 4

distribution of power and influence that ensures that no one nation/group of nations will dominate/interfere with the activities of others

Question 5

Sourcing requirements

Answer 5

content or value added limits on the % of labor/materials used in imported products

Question 6

Country risk

Answer 6

emcompases political risk, ecnomic risk, transfer risk, sovereign risk and exchange rate risk associated in engaging in business with foreign countries

Question 7

interest rate risk

Answer 7

relates to the fluctuation in the value of an investment as a result of changes in interest rates

Question 8

Commodity price risk

Answer 8

market values and future cash inflows that are affected by fluctuations in commodity prices

Question 9

Principal risk

Answer 9

risk of losing an investment (money)

Question 10

unipolar distribution of power

Answer 10

power concentrated in a single nation

Question 11

multilateral distribution of power

Answer 11

power that is not only distributed, but shared cooperatively among nations

Question 12

Unilateral

Answer 12

single nation acting on its own. not relevant to distribution of power topic

Question 13

multipolar distribution of power

Answer 13

power distributed amongst multiple nations

Question 14

BRIC nations that are associated with shift in economic balance of power

Answer 14

Brazil
Russia
India
China

Question 15

global sourcing

Answer 15

use of worldwide supply chain

Question 16

systematic interdependence

Answer 16

global warming and nuclear proliferation issues

Question 17

functional interdependence

Answer 17

greenhouse gas emissions issues

Question 18

dumping

Answer 18

when price charged to foreign customers on exported goods is less than either the price charged in the domestic market or less than the production cost

Question 19

foreign trade zone

Answer 19

a physical location in which tariffs are waived on imported products until they leave the zone