Midterms

Question 1

Globalization refers to the complete elimination of all barriers to cross-border trade and investment, resulting in identical markets with no differences between national markets.

Answer 1

False

Question 2

GATT means General Agreement on Taxes and Tariffs.

Answer 2

False

Question 2

Globalization of Production involves sourcing goods to take advantage of cost and quality differences in factors like labor, energy, and capital.

Answer 2

True

Question 2

The World Trade Organization polices the global trading system and ensures that nation-states follow established rules.

Answer 2

True

Question 3

The International Monetary Fund was established to control global trade and does not require nation-states to adopt specific economic policies in exchange for loans.

Answer 3

False

Question 4

The United Nations promotes conflict through isolation and has 150 member countries.

Answer 4

False

Question 4

The World Bank promotes economic development by providing high-interest loan to wealthy nations for non-infrastructure projects.s

Answer 4

False

Question 5

The UN Charter’s purposes include promoting international conflict, discouraging cooperation, and limiting respect for human rights.

Answer 5

False

Question 6

The Group of Twenty (G20) consists of finance ministers and central bank governors from the 19 largest economies in the world, along with representatives from the European Union and the European Central Bank.

Answer 6

True

Question 7

Trade in goods and services, along with foreign direct investment, has been growing faster than world output, with more firms dispersing production processes to various locations worldwide.

Answer 7

True

Question 8

Moore’s Law predicts that the power of microprocessor technology halves, and its cost of production doubles every 18 months.

Answer 8

False

Question 9

Technological change has played a significant role in communications, with the development of the microprocessor being the single most important innovation since World War II.

Answer 9

True

Question 10

Role of Technological Change: Implications for the Globalization of Markets – Cultural distance has increased, leading to greater divergence in consumer tastes and preferences.

Answer 10

False

Question 11

A multinational enterprise (MNE) is any business that conducts productive activities in two or more countries.

Answer 11

True

Question 12

Free trade leads to countries specializing in the production of goods and services they can produce most efficiently, while importing those they cannot produce as efficiently.

Answer 12

True

Question 13

The International Monetary Fund (IMF) is:

a) A trade organization focused on regulating tariffs between nations.
b) Established to maintain order in the international monetary system and often seen as the lender of last resort.
c) A global organization focused solely on promoting human rights.

Answer 13

B

Question 14

The World Bank:

a) Primarily provides financial assistance to large multinational corporations.
b) Promotes economic development by offering low-interest loans to governments in poor nations for infrastructure investments.
c) Focuses on promoting military power among developing nations.

Answer 14

B

Question 15

The Changing Foreign Direct Investment Picture:

a) As barriers to trade increased, U.S. firms stopped investing abroad.
b) Non-U.S. firms are increasingly investing across national borders to optimize production activities and establish a direct presence in foreign markets.
c) Foreign Direct Investment (FDI) is only beneficial to U.S. firms, and not for companies in other countries.

Answer 15

B

Question 16

The Globalization of Production:

a) Sourcing goods only from the local market, without considering cost or quality.
b) Sourcing goods to take advantage of differences in cost and quality of factors of production.
c) Focusing solely on production within one country, without international involvement.

Answer 16

B

Question 17

Group of Twenty (G20):

a) A group of the top 5 global economies meeting every year to discuss trade policies.
b) Finance ministers and central bank governors of the 19 largest economies in the world, plus representatives from the European Union and the European Central Bank.
c) Finance ministers and central bank governors of the 10 largest economies in the world, plus representatives from the United Nations.

Answer 17

B

Question 18

ole of Technological Change continued:

a) Transportation technology has increased the cost of shipping, making it harder to globalize production.
b) Commercial jets, superfreighters, and containerization have made it more economical to locate production in geographically separate locations.
c) Commercial jets, superfreighters, and containerization have all “shrunk the globe,” making global production more challenging.

Answer 18

b

Question 19

Implications for the Globalization of Markets:

a) Cultural distance has increased, causing a greater divide in consumer tastes and preferences.
b) Cultural distance has remained the same, with no impact on global consumer preferences.
c) Cultural distance has been reduced, leading to some convergence of consumer tastes and preferences.

Answer 19

c

Question 20

The Changing World Output and World Trade Picture:

a) In 2018, the U.S. accounted for 10 percent of world output.
b) In 1960s, the U.S. accounted for 38.3 percent of world output.
c) In 1960s, the U.S. accounted for 50 percent of world output.

Answer 20

B

Question 21

The Changing Foreign Direct Investment Picture:

a) U.S. firms were the only ones investing across national borders.
b) Non-U.S. firms increasingly invested across national borders.
c) Non-U.S. firms increasingly invested within the U.S. only.

Answer 21

B

Question 22

The Changing Nature of the Multinational Enterprise: a) Multinational enterprise (MNE) is restricted to businesses that are only involved in exporting goods. b) Multinational enterprise (MNE) operates only within one country. c) Multinational enterprise (MNE) is any business that has productive activities in two or more countries.

Answer 22

C

Question 23

Antiglobalization Protests: a) Antiglobalization protests started in 2010 and focus on local economic issues. b) Protestors usually demonstrate at local government meetings. c) Antiglobalization protests began with the 1999 protests at the WTO meeting in Seattle and now occur at major global institutions' meetings.

Answer 23

C

Question 24

Protestors believe globalization causes detrimental effects on living standards, wage rates, and the environment: a) Protestors believe globalization only has positive effects on global economies. b) Protestors believe globalization improves living standards, wage rates, and the environment. c) Protestors believe globalization causes detrimental effects, but theory and evidence suggest these fears may be exaggerated.

Answer 24

C

Question 25

Globalization, Jobs, and Income: a) Critics of globalization believe that lower wage rates in other countries lead to job creation in developed nations. b) Critics of globalization argue that falling trade barriers allow firms to move manufacturing activities to countries with much lower wage rates. c) Critics of globalization argue that trade barriers should be raised to encourage more job opportunities.

Answer 25

B

Question 26

Globalization, Jobs, and Income continued: a) Data suggests the share of labor in national income has remained stable, with no changes in income distribution between skilled and unskilled labor. b) Data suggests the share of labor in national income has declined over the past two decades, with a rise in the share of national income for skilled labor. c) Data suggests the share of labor in national income has increased, and both skilled and unskilled labor have experienced a rise in income.

Answer 26

B

Question 27

Managers: a) International business is any firm that only engages in international investment. b) International business is any firm that engages in international trade or investment. c) International business is any firm that only engages in international trade.

Answer 27

B

Question 28

Early outsourcing was mainly in_____________, but __________now supports outsourcing services.

Answer 28

manufacturing:modern technology