BUSB 342 MID-TERM 1 Flashcards
The shift toward a more integrated and interdependent world economy is referred to as globalization. T or F
True
A company does not need to be large in size to facilitate the globalization of markets. T or F
True
Companies hope to lower their overall cost structure to improve the quality or functionality of their product offering through globalization of production. T or F
True
The largest of all global markets, currently, are markets for consumer products. T or F
False
Outsourcing is a process that is limited to manufacturing enterprises.
False
The health care sector in the U.S. cannot avail the benefits of outsourcing to low-cost producers in other nations because of the nature of the work. T or F
False
The World Bank has focused on policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties. T or F
False (WTO)
The World Bank is known as the lender of last resort. T or F
False (IMF)
A few of the UN’s central mandates are the promotion of higher standards of living, full employment, and conditions of economic and social progress and development. T or F
True
In 2008 and 2009, the GATT became the forum through which major nations attempted to launch a coordinated policy response to the global financial crisis, which started in America. T or F
False
The expansion of world trade implies that nations are becoming less dependent on each other for important goods and services. T or F
False
Over the past 30 years the flow of FDI has accelerated faster than the growth in the world trade and world output. T or F
True
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 homes markets protected from foreign competitors. T or F
False
In a totalitarian country, there are safeguards to protect an individual’s right to freedom of expression, opinion, and organization. T or F
False
It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged. T or F
True
In a market economy, if demanded for a product exceeds supply, prices will rise, signaling to producers to produce more. T o F
True
The number of command economies has fallen dramatically since the demise of communism in the late 1980s. T or F
True
The objective of the government in a command economy is to encourage free and fair competition between private producers. T or F
False
In a command economy, enterprises have little incentive to control costs and be efficient, because they cannot go out of business. T or F
True
In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests. T or F
True
Gross National Income per-capital data take into account differences in the cost of living. T or F
False
GNI per capita can be adjusted by purchasing power to account for differences in the cost of living. T or F
True
GNI allows a more direct comparison of living standards in different countries. T or F
False
The base for the purchasing power parity adjustment of the GNI is the cost of living in the United States. T or F
True
GNI and PPP data are useful because they provide a dynamic analysis of economic development. T or F
False
Since the collapse of communism at the end of the 1980s, the erstwhile communist nations have transformed their economies by globalizing their markets. This involves:
A. regulating markets
B. privatizing state-owned enterprises
C. decreasing competition
D. reducing foreign investment
B. privatizing state-owned enterprises
Which of the following is a consequence of globalization?
A. Decreasing interdependence between national economies
B. Increasing outsourcing of services
C. Differentiation of material culture
D. Increase in barriers to cross-border trade
B. Increasing outsourcing of services
Which of the following has enabled globalization of markets?
A. Differentiation amongst national markets
B. Falling barriers to cross border trade
C. Reduced homogeneity of material culture across the world
D. Increased government ownership of fasctors of productions
B. Falling barriers to cross border trade
Which of the following factors hinders globalization of consumer goods market?
A. National differences in tastes and preferences
B. Higher production costs in developed nations
C. Homogenization of material culture
D. Increasing outsourcing of goods and services
A. National differences in tastes and preferences
Globalization of markets results in markets becoming___.
A. less interdependent
B. less diverse
C. more protected
D. less competitive
B. less diverse
The relative decline of the United States in the share of world output and world exports reflects___.
A. an increase in the barriers to foreign trade in the U.S.
B. the deepening of the global financial crisis
C. the reduced industrialization of developing nations
D. the growth in the economic development of the world economy
D. the growth in the economic development of the world economy
In the 1970s, many Japanese firms invested in North America and Europe:
A. to avoid 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
C. as a hedge against unfavorable currency movements
Which of the following countries has been the largest recipient of foreign direct investment and received about $60 billion to $100 billion a year in inflows in 2004-2009?
A. Brazil
B. Russia
C. India
D. China
D. China
A multinational enterprise (MNE) is a firm that____.
A. exports its products to multiple countries
B. has production units in more than two countries
C. does most of its business on the Internet
D. lists its securities on a public exchange
B. has production units in more than two countries
The World Trade Organization has estimated that the developed nations of the world can raise global economic welfare by $128 billion by:
A. removing subsidies given to their agricultural producers
B. increasing tariff barriers to trade in agriculture
C. increasing outsourcing of manufacturing processes
D. reducing defense expenditure
A. removing subsidies given to their agricultural producers
Interdependent political, economic, and legal systems of a country make up its:
A. administrative agenda
B. Socioeconomic fabric
C. Cultural environment
D. Political economy
D. Political economy
A political system that prioritizes the needs of the society over individual freedoms is called___.
A. Totalitarianism
B. Collectivism
C. Capitalism
D. Egalitarianism
B. Collectivism
Modern socialism has been popularized largely through the work of____.
A. Adam Smith
B. Karl Marx
C. David Hume
D. THomas Hobbes
B. Karl Marx
The ___ believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.
A. existentialists
B. social democrats
C. communists
D. anarchists
C. communists
In several Western democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to____.
A. privatization
B. nationalization
C. liberalization
D. socialization of production
A. privatization
GNI per person figures can be misleading because___.
A. they also include batter agreements
B. they provide a dynamic picture of development
C. they don’t consider differences in the cost of living
D. they don’t consider exchange rate
C. they don’t consider differences in the cost of living
Which of the following helps in adjusting GNI such that it accounts for the differences in the cost of living?
A. Purchasing power parity (PPP) adjustment
B. Human Development Index
C. Debt to GNI ratio
D. Consumer Price Index
A. Purchasing power parity (PPP) adjustment
In some countries, the official GNI per capita measured at PPP data does not reflect the actual total annual income because:
A. it doesn’t consider differences in the cost of living
B. it gives a static picture of development
C. it fails to include income earned from other countries in the form of dividends
D. large amounts of economic activity may be in the form of barter agreements
D. large amounts of economic activity may be in the form of barter agreements
Which of the following is a measure that is developed by the United Nations to measure the quality of life in different nations?
A. Gross national income
B. Human Development Index
C. Purchasing power parity
D. Gross domestic product
B. Human Development Index
The HDI is based on all of the following measures EXCEPT:
A. life expectancy at birth
B. political freedom
C. educational attainment
D. whether average incomes are sufficient to meet the basic needs of life
B. political freedom
