Chapter 1- Globalization

Question 1

trend away from distinct national economic units and toward one huge global market

Answer 1

globalization

Question 2

moving away from an economic system in which national markets are distinct entities and toward a system where national markets are merging into one global market

Answer 2

globalization of markets

Question 3

trend by individual firms to disperse parts of their productive processes to different locations around the globe to take advantage of differences in cost and quality of factors of production

Answer 3

globalization of production

Question 4

any firm that engages in international trade or investment

Answer 4

international business

Question 5

international treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO

Answer 5

General Agreement on Tariffs and Trade (GATT)

Question 6

the organization that succeeded the GATT as a result of the successful completion of the Uruguay Round of GATT negotiations

Answer 6

World Trade Organization (WTO)

Question 7

international institution set up to maintain order in the international monetary system

Answer 7

International Monetary Fund (IMF)

Question 8

international institution set up to promote general economic development in the world’s poorer nations

Answer 8

World Bank

Question 9

an international organization made up of 193 countries headquartered in New York City, formed in 1945 to promote peace, security and cooperation

Answer 9

United Nations

Question 10

established in 1999 and comprises the finance ministers and central bank governors of the 19 largest economies in the world plus representatives from the European Union and European Central Bank

Answer 10

Group of Twenty (G20)

Question 11

occurs when a firm exports goods or services to consumers in another country

Answer 11

international trade

Question 12

direct investment in business operations in a foreign country

Answer 12

foreign direct investment (FDI)

Question 13

the power of microprocessor technology doubles and its costs of production fall in half every 18 months

Answer 13

Moore’s law

Question 14

the total accumulated value of foreign-owned assets at a given time

Answer 14

stock of foreign direct investment (FDI)

Question 15

a firm that owns business operations in more than one country

Answer 15

multinational enterprise (MNE)