Midterm Exam

Question 1

globalization

Answer 1

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

Question 2

globalization of markets

Answer 2

moving away from an economic system in which national markets are distinct entities isolated by trade barriers and barriers of distance, time, and culture, and toward a system in which national markets are merging into one global market

Question 3

globalization of production

Answer 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

Question 4

factors of production

Answer 4

inputs into the productive process of a firm, including labor, management, land, capital, and technological know-how

Question 5

General Agreement on Tariffs and Trade (GATT)

Answer 5

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

Question 6

World Trade Organization (WTO)

Answer 6

the organization that succeeded the General Agreement on Tariffs and Trade (GATT) as a result of the successful completion of the Uruguay Round of GATT negotiations

Question 7

International Trade

Answer 7

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