Chapter 1: Impact of Globalization

Question 1

It is an interesting phenomenon since it is obvious that the world has been going through this process

Answer 1

GLOBALIZATION

Question 2

it is phenomenon that cannot be simply ignored

Answer 2

GLOBALIZATION

Question 3

Effect of globalization are classified into two broad categories

Answer 3

1. Global market opportunities
2. Global market threats

Question 4

It refers to the increases of market potential, trade, investment potential, and resource accesibility

Answer 4

Global market opportunities

Question 5

It refers to the increases in the number and level of competition, and the level of uncertainty?

Answer 5

Global market threats

Question 6

it enable firms to access worldwide resources and expand into many new overseas markets

Answer 6

Global market opportunities

Question 7

It can be destructive to firm performance due to an increasing number of competitors and an increase in intensity of competition coupled with higher market uncertainty.

Answer 7

Global market threats

Question 8

Threats and opportunities in the global marketplace

Answer 8

Political, cultural differences and economic environment

Question 9

What are the basic principles to underpin greater prosperity

Answer 9

• investment
• spread of technology
• strong institutions
• sound macroeconomic policies
• an educated workforce
• existence of a market economy

Question 10

a term used to describe the changes of societies and the world economy that are the result of dramatically increase trade and cultural exchange.

Answer 10

Globalization

Question 11

There is substantial evidence, from countries of different sizes and different regions, that as countries “globalize” their citizens benefit, in the form of

Answer 11

wiser variety of goods and services,
lower prices,
better paying jobs

Question 11

It is probably no mere coincidence that over the past _____, as a number of countries have become more open to global economic forces, the percentage of the developing world living in extreme poverty— defined as living on less than ______ per day has been cut in half.

Answer 11

20 years; $1

Question 11

Regional disparities persist: while poverty fell in ____________________

Answer 11

East and South Asia, it actually rose in sub-Saharan Africa.

Question 12

The __________________ notes there are still around 1 billion people surviving on less than $1 per day-with 2,6 billion living on less than $2 per day.

Answer 12

UN’s Human Development Report

Question 13

is a historical process, the result of human innovation and technological progress.

Answer 13

Economic “globalization”

Question 14

It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across interational borders.

Answer 14

Economic “globalization”

Question 15

began to be used more commonly in the 1980s, reflecting technological advances that made it easier and quicker to complete international transactions both trade and financial flows.

Answer 15

Economic “globalization”

Question 15

indicators that illustrate how goods, capital, and people,
have become more globalized.

Answer 15

• value of trade (goods and services)
• Foreign direct investment
• stock of international
• number of minutes spent on cross-border telephone calls
• number of foreign workers

Question 15

also offer greater opportunity for people to tap into more diversified and larger markets around the word.

Answer 15

Global Markets

Question 15

_______ do not necessarily ensure that the benefits of increased efficiency are shared by all.

Answer 15

Global Markets

Question 16

The value of trade (goods and services) as a percentage of world GDP increased from ___________

Answer 16

42.1 percent in 1980 to 62.1 percent in 2007.

Question 17

Foreign direct investment increased from __________

Answer 17

6.5 percent of world GDP in 1980 to 31.8 percent in 2006.

Question 18

The number of foreign workers has increased from __________

Answer 18

78 million people (2.4 percent of the world population) in 1965 to 191 million people (3.0 percent of the world population) in 2005.

Question 18

be they in business or government- can draw on ideas that have been successfully implemented in one jurisdiction and tailor them to suit their own jurisdiction.

Answer 18

Innovators

Question 18

can also create a framework for cooperation among nations on a range of non-economic issues that bave cross-border implications, such as immigration, the environment, and legal issues.

Answer 18

Globalization

Question 18

implies that information and knowledge get dispersed and shared.

Answer 18

Globalization

Question 18

a Nobel laureate and frequent critic of globalization, has nonetheless observed that globalization “has reduced the sense of isolation felt in much of the developing world and has given many people in the developing world access to knowiedge well beyond the reach of even the wealthiest in any country a century ago.

Answer 18

Joseph Stiglitz

Question 19

A core element of globalization is the expansion of world trade through the elimination or reduction of trade barriers, such as import tariffs.

Answer 19

International Trade

Question 20

often a source of
economic growth for developing nations, stimulate job creation as industries sell beyond their borders.

Answer 20

Exports

Question 21

enhances national competitiveness by driving workers to focus on those vocations where they, and their country, have a competitive advantage.

Answer 21

Trade

Question 22

promotes economic resilience and flexibility, as higher imports help to offset adverse domestic supply shocks.

Answer 22

Trade

Question 23

that is, engaging in protectionism generates adverse consequences for a country that undertakes such a policy.

Answer 23

Restricting International Trade

Question 24

tends to reward concentrated, well-organized and politically-connected groups, at the expense of those whose interests may be more diffuse (such as consumers). It also reduces the variety of goods available and generates inefficiency by reducing competition and encouraging resources to flow into protected sectors.

Answer 24

Protectionism

Question 25

the former president of Mexico, has observed that, “In every case where a poor nation has significantly overcome its poverty, this has been achieved while engaging in production for export markets and opening itself to the influx of foreign goods, investment, and technology.”

Answer 25

Ernesto Zedillo

Question 26

At the same time, __________ have risen across virtually all regions for even the poorest segments of population, indicating that the poor are
better off in an absolute sense during this phase of giobalization, atthough incomes
for the relatively well-off have increased at a faster pace.

Answer 26

per capita incomes

Question 26

As discussed in the _________issue of the _________________, one must keep in mind that there are many sources of inequality. Contrary to popular belief, increased trade globalization is associated with a decline in inequality. The spread of technological advances and increased financial giobalization and foreign direct investment in particular-have instead contributed more to the recent rise in inequality by raising the demand for skilled labor and increasing the returns to skills in both developed and developing countries.

Answer 26

October 2007 ; World Economic Outlook

Question 26

Equally important, globalization should not be rejected because its impact has left some people ________

Answer 26

UNEMPLOYED

Question 26

the Financial Times columnist, highlights one of the fundamental contradictions inherent in those who bemoan inequality, pointing out that this charge amounts to arguing “that it would be better for everybody to be equally poor than for some to become significantly better off, even if, in the long run, this will almost certaisly lead to advances for everybody.

Answer 26

Martin Wolf

Question 27

One of the most authoritative studies of the subject has been carried out by World Bank economists

Answer 27

David Dollar and Aart Kraay

Question 28

concluded that since 1980, globalization has contributed to a reduction in poverty as well as a reduction in global income inequality. Furthermore, they, found out that in “globalizing” countries in the developing world, income per person grew three-and-a-half times faster than in “non-globalizing” countries, during the 1990s.

Answer 28

David Dollar and Aart Kraay

Question 29

who denoted that “higher growth rates in globalizing developing countries have translated into higher incomes for the poor.”

Answer 29

David Dollar and Aart Kraay

Question 30

pointed out that “the main losers in today’s very unequal world are not those who are too much exposed to globalization.
They are those who have been lef out.

Answer 30

Kofi Annan

Question 30

found out that on average 64 percent of those polled in 27 out of 34 countries- held the view that the benefits and burdens of “the, economic developments of the last few years” have not been shared fairly.

Answer 30

BBC World Services

Question 30

in some developing countries, those who perceive such unfaimess are more likely to say globalization is proceeding too ______

Answer 30

slowly

Question 30

Myths about globalization

Answer 30

1. Downward pressure on wages
2. The “race to the bottom”
3. Globalization is irreversible
4. Openness to globalization will, on its own, deliver economic growth
5. The shrinking state

Question 31

intensified and spread across
asset classes and banks, precipiating a financial shock that many have charactesized
as the most serious sine the 19

Answer 31

Credit Market Strains