Global Economy

Question 1

Refers to the increasing interdependence of world economies as a result of the growing scale of cross-boarder trade of commodities and services, flows of international capital and wide and rapid spread technologies.

Answer 1

Economic Globalization

Question 2

It reflects the continuing expansion and mutual integration of market frontiers, and is an
irreversible trend for the economic development in the whole world at the turn of the
millennium

Answer 2

Economic Globalization

Question 3

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

Answer 3

Economic globalization

Question 4

It refers to the increasing integration of economies around the world, particularly through the movements of goods, services, services, and capital across boarders.

Answer 4

Economic Globalization

Question 5

It also refers to that movement of people (Labor) and knowledge (technology) across international borders.

Answer 5

Economic Globalization

Question 6

A process making the world economy an organic system by extending transnational economic process and economic relations to more and more countries and by deepening the economic interdependencies among them.

Answer 6

Globalization

Question 7

Two major driving forces for Economic Globalization:

Answer 7

1. Rapid growing of information in all types of productive activities 2.Marketization

Question 8

A restructuring process that enables state enterprises to operate as market-oriented firms by changing the legal environment in which they operate.

Answer 8

Marketization

Question 9

can be achieved through reduction of state subsidies, organizational restructuring of management such as corporatization, decentralization, and privatization

Answer 9

Marketization

Question 10

Dimensions of Economic Globalization

Answer 10

The globalization of trade of goods and services
The globalization of financial and capital markets
Tye globalization of technology and communication
The globalization of production

Question 11

Is a functional integration of internationally dispersed activities which means it a qualitative transformation rather than a quantitate change.

Answer 11

Economic globalization

Question 12

An extension of economic activities between internationally dispersed activities.

Answer 12

Internationalization

Question 13

Economic globalization produces its own major players in the form of____________

Answer 13

Transnational Corporations (TNC’s)

Question 14

Also known as Multi-national corporations

Answer 14

Transnational Corporations

Question 15

A corporation that has a home base, but is registered, operates, and has assets or other facilities in at least one other country at one time.

Answer 15

Transnational Corporations or Multi-national Corporations

Question 16

A process that creates an organic system of the world economy.

Answer 16

Economic Globalization

Question 17

Example of archaic globalization

Answer 17

Silk road

Question 18

started in western China, reached the boundaries of the Parthian empire, and continued onwards towards Rome. It also connected Asia, Africa, and Europe

Answer 18

Silk road

Question 19

In this century, century global economy exist only in trade and exchange rather production as the world export (world GDP did not reached 1-2%)

Answer 19

17th and 18th century

Question 20

In the 17th and 18th century it only exist in trade and exchange rather than production as the world export to GDP did not reach 1-2%

Answer 20

Global Economy

Question 21

The advent of globalization approaching its modern form is witnessed.

Answer 21

19th century

Question 22

Refers to a system that forms rules and standards for facilitating international trade among the nations

Answer 22

International Monetary System (IMS)

Question 23

It helps in reallocating the capital and investment from one nation to another.

Answer 23

International Monetary System (IMS)

Question 24

It is the global network of the government and financial institutions that determine the exchange rate of different currencies for international trade.

Answer 24

International Monetary System (IMS)

Question 25

It is a governing body that sets rules and regulations by which different nations exchange currencies with each other.

Answer 25

International Monetary System (IMS)

Question 26

It also reflects economic power and interests, as money is inherently political, an integral part of high politics or diplomacy.

Answer 26

International Monetary System (IMS)

Question 27

In 1870-1914 with the help of_______________trade was carried without any institutional support

Answer 27

gold and silver

Question 28

During this time monetary system was decentralized while market based and money played a minor role in international trade in contrast to gold.

Answer 28

1870 - 1914

Question 29

believed to guarantee a non-inflationary, stable economic environment, a means for accelerating international trade

Answer 29

Gold

Question 30

It functioned as a fixed exchange rate regime, with gold as the only international reserve.

Answer 30

Gold standard

Question 31

system of backing a country’s currency with its gold reserves.

Answer 31

Gold standard

Question 32

The use of gold decline due to increase expenditure and inflation which was caused by war.

Answer 32

After world war l

Question 33

In 1944, ____ representative of ____ nations met at the Bretton Woods, New Hampshire, United States to create a new international monetary system called as the _______________

Answer 33

77 representative | 44 Nations **Bretton Woods System**

Question 34

The aim of this system is to create a stabilized international currency system and ensure a monetary stability for all the nations.

Answer 34

Bretton Woods System

Question 35

_________________ ended in ________ as the trade deficit and growing inflation undermined the value of dollar in the whole world.

Answer 35

Bretton Woods System | In 1971

Question 36

Also known as flexible exchange rate system

Answer 36

Floating Exchange Rate

Question 37

This was developed in 1973 that was a market based

Answer 37

Floating Exchange Rate

Question 38

It has never worked satisfactorily in controlling inflation or maintaining equilibrium in international transactions.

Answer 38

The Gold Standard

Question 39

To assess whether the gold standard was successful, the following roles of a properly designed IMS must be considered:

Answer 39

To provide order and stability to international exchange market. To encourage the elimination of balance of payment. Provide access to international credit during the events of disruptive shock.

Question 40

Refers to a 30 year long process that began at the end of the 1960’s.

Answer 40

European Monetary Integration

Question 41

Form of monetary cooperation intended to reduce the excessive influence of US dollar on domestic exchange rate, and led, through various attempts, to the creation of a monetary union and a common currency.

Answer 41

European Monetary Integration

Question 42

This union brings benefits to member states.

Answer 42

Monetary Union

Question 43

In ______ arrangements between several European countries which links their currencies in an attempt to stabilized the exchange rate.

Answer 43

1979 **(European Monetary System)**

Question 44

This system was succeeded by the European Economic and Monetary Union

Answer 44

The European Monetary Union

Question 45

It is an Institution which established a common currency called Euro.

Answer 45

European Union

Question 46

European Union established a currency called?

Answer 46

Euro

Question 47

It originated to stabilized the inflation and stop the large exchange rate fluctuations between European countries.

Answer 47

European Monetary System

Question 48

European Bank Was established

Answer 48

June 1998

Question 49

Unified currency called______ was born___________ and came to be used by most EU member countries

Answer 49

Euro | January 1999

Question 50

Unified currency called______ was born___________ and came to be used by most EU member countries

Answer 50

Euro | January 1999

Question 51

Permanent fund created by the European Union to provide emergency assistance to members state within the union.

Answer 51

European Financial Stability Mechanism (EFSM)

Question 52

An organization created by European Union to provide assistance to members state with unstable communities.

Answer 52

European Financial Stability Facility (EFSF)

Question 53

It is a special purpose vehicle (SPV) managed by the European Investment Bank.

Answer 53

European financial stability facility

Question 54

A lending institution

Answer 54

European investment bank

Question 55

The exchange of goods, services, and capital across national boarders.

Answer 55

International trade

Question 56

It is a multi million dollar activity-central to gross domestic product (GDP) of many countries

Answer 56

International trade

Question 57

It is the only way for many people in many countries to acquire resources.

Answer 57

International trade

Question 58

is the exchange of goods or services along international borders.

Answer 58

International trade

Question 59

This type of trade allows for a greater competition and more competitive pricing in the market

Answer 59

international trade

Question 60

Two key concepts in the economics of international trade:

Answer 60

Specialization and comparative advantage

Question 61

comes in; so long as the two countries have different relative efficiencies, the two countries can benefit from trade.

Answer 61

Comparative Advantage

Question 62

The country with this advantage will still benefit by redirecting its resources to those goods where it is most productive and trading for the others

Answer 62

Absolute Advantage

Question 63

It refers to this process; countries as well as individual businesses can maximize their welfare by specializing in the production of those goods where they are most efficient and enjoy the largest advantages over rivals.

Answer 63

Specialization

Question 64

This products for the consumer is also the result of competition

Answer 64

Affordable Products

Question 65

More affordable products for the consumer is also the result of____________

Answer 65

Competition

Question 66

gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries.

Answer 66

Trading Globally

Question 67

allows wealthy countries to use their resources such as labor, technology, or capital more efficiently.

Answer 67

Global Trade

Question 68

This happens in international trade happens if a country cannot efficiently produce an item and obtain it by trading with another country that can.

Answer 68

Specialization

Question 69

refer to the regulations and agreement of foreign countries.

Answer 69

Trade Policies

Question 70

It defines standards, goals, rules, and regulations that pertain to trade relation between countries.

Answer 70

Trade policies

Question 71

imposes on import and export, inspection, regulations, tariffs and quotas are all part of country’s trade policy.

Answer 71

Taxes

Question 72

These are taxes or duties paid for a particular class of imports or exports. Imposing taxes on imported and exported goods is a right of every country.

Answer 72

Tariffs

Question 73

Imposing this on imported and exported goods is a right of every country.

Answer 73

Taxes

Question 74

Imposing this on imported goods are levied by some nations for the protection of their local industries.

Answer 74

Heavy Tariffs

Question 75

These are measures that governments or public authorities introduce to make imported goods or services less competitive than locally produced goods and services

Answer 75

Trade Barries

Question 76

They are state-imposed restrictions on trading a particular product or with a specific nation.

Answer 76

Trade Barriers

Question 77

It can be linked to the product, service like technical requirement and it can also be administrative in nature such as rules and procedures of transactions.

Answer 77

Trade Barriers

Question 78

Most common types of trade barriers

Answer 78

Tariffs, duties, subsidies, embargoes and quotas.

Question 79

This ensures that imported products in the country are of high quality.

Answer 79

Safety

Question 80

Inspection regulations laid down by public officials ensure the safety and quality standards of imported products.

Answer 80

Safety

Question 81

This safeguards the best interest of its trade and citizen.

Answer 81

National Trade Policy

Question 82

To regulate the trade and business relations between two nations, this policy is formed.

Answer 82

Bilateral Trade Policy

Question 83

This defines the_______________________ their charter like the International economic organizations, such as **Organization for Economic Corporations and Development (OECD), World Trade Organization (WTO) and International Monetary Fund (IMF).The best interests of both developed and developing nations are upheld by the policies.**

Answer 83

International Trade Policy

Question 84

deals with the global rules of trade between nations with the main function of ensuring that trade flows smoothly, predictably and freely.

Answer 84

World Trade Organization

Question 85

is viewed as the means by which industrialized countries can gain access to the markets of developing countries.

Answer 85

World trade organization

Question 86

an activity that requires search for a partner and relation-specific investments that are governed by incomplete contracts.

Answer 86

Outsourcing

Question 87

is a central element of the new economy.

Answer 87

Subcontracting

Question 88

It is the practice of assigning part of the obligations and tasks under a contract.

Answer 88

Subcontracting

Question 89

prevalent in areas where complex projects are the norm like construction and information technology.

Answer 89

Subcontracting

Question 90

is a means of finding a partner with which a firm can establish a bilateral relationship and having the partner undertake relationship-specific investments so that it becomes able to produce goods and services that fit the firm’s particular needs.

Answer 90

Outsourcing

Question 91

One of the most rapidly growing components of international trade.

Answer 91

Outsourcing

Question 92

Size of the country can affect the_____________

Answer 92

“thickness” of its markets

Question 93

Possible Determinants of the location of the Outsourcing

Answer 93

1. Size of the country can affect the “thickness” of its markets. 2. The technology for search affects the cost and likelihood of finding a suitable partner. 3. The technology for specializing components determines the willingness of a partner to undertake the needed investment in a prototype. 4. The contracting environments can impinge on a firm’s ability to induce a partner to invest in the relationship.