GlobalBusiness CH1

Question 1

Globalization of markets leads to..?

Answer 1

Failing barriers, cross boarder trade and investment. Benefits small and large companies. Products serve a universal need (global)

Question 2

Globalization of Production leads to…?

Answer 2

factors of production = sourcing goods tp take advantage of difference in cost and quality. Transportation costs lower.

Question 3

What does the WTO focus on?

Answer 3

ensures nation states are following rules and policies. Multinational agreements.

Question 4

what does the world bank do?

Answer 4

promotes economic development through low interest loans to poor nations for infrastructure development

Question 5

what does IMF do?

Answer 5

maintain order in the international Monetary. requires nation states to follow policies to return economic growth and stability.

Question 6

what does the UN do?

Answer 6

promotes peace through international cooperation and collective security.

Question 7

what are the 4 points in the UN charter?

Answer 7

1. maintain international peace and security
2. develop friendly relations among nations
3. cooperate in solving international problems and promoting respect for human rights
4. be a center for harmonizing the actions of nations

Question 8

what is G20?

who is it made up of?

Answer 8

Group of twenty.
finance minister + central bank governor + representative of the EU + representative European central bank = 90% global GDP and 80% international global trade

Question 9

Main drivers of Globalization

Answer 9

international trade and foreign direct investment.

high tariffs resulted in relative trade policies

Question 10

Why is trade 2.6 times higher then the world population?

Answer 10

Removal of restrictions to FDI and more trade agreements.

Question 11

Moores Law

Answer 11

predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18 months.

• half the worlds population uses internet
• e- commerce sales
• internet = a equalizer

Question 12

Transportation technology are…?
impacts what…?
Implication on the market..?

Answer 12

Jets, super-freights, containers.
Implication of globalization production, more economical, world wide communication.
Depends on taste and preference.

Question 13

Change in Foreign Direct Investments

Answer 13

Non- US firms are increasing across boarders.

Question 14

Critics of Globalization

Answer 14

falling trade barriers allows firms to move manufacturing to countries with a lower wage rate –> takes away jobs leading to higher unemployment and lower living standards

Question 15

Supporters of Globalization

Answer 15

free trade will result in specialization of production of goods and services that another county can do more efficiently then to import these products. reduce cost structure and consumer benefits.

Question 16

Critics of Globalization Labour policies and environment

Answer 16

Lack of regulations can lead to abuse. Adhering to regulations can increase costs. As countries get richer then enact tougher environmental and labour relations.

Question 17

Supporters of Globalization Labour policies and environment

Answer 17

Tougher environmental regulations and stricter labour standards work together for economic progress.

Question 18

Critics of National Sovereignty

Answer 18

Shift of power from national government towards supernational organizations (WTO, EU, UN)

Question 19

Supporters of National Sovereignty

Answer 19

Power of supernational organizations is limited to what nation-states collectively agree to grant. these organizations exist to serve the collective interests of member states.

Question 20

Critics of Globalization and the Worlds poor.

Answer 20

Gap between the rich and poor has grown. Totalitarian governments, poor economic policies, corruption and lack of property rights, expanding populations in developing countries

Question 21

Supporters of Globalization and the worlds poor

Answer 21

lower barriers to trade and investments and promote free market policies.

Question 22

What do managers in a global market place need to understand?

Answer 22

How to vary practices, complex decision making, international trading and investment systems, currency exchange.

Question 23

What are the different economic systems?

Answer 23

Centrally planned: Government plans goods and services that the country produces. All businesses are state owned.
Mixed: Certain sectors are private and some are state owned with government planning.
Free Market: All productive activities are state owned and production is determined by supply and demand.