Deck 18: Globalization

Question 1

In 1900, 14% of the U.S. population had been born in a foreign country. Today, that number is about

A) 1%
B) 5%
C) 8%
D) 14%
E) 20%

Answer 1

8%

Question 2

In the second half of the twentieth century, technological change greatly reduced ____ costs, which enhanced globalization.

A) financing
B) exchange rate
C) communication
D) derivation
E) portfolio

Answer 2

communication

Question 3

Which of the following countries is not one of the most globalized countries as measured by Foreign Policy magazine (2007 rankings)?

A) Brazil
B) Singapore
C) Switzerland
D) Hong Kong
E) Ireland

Answer 3

Brazil

Question 4

Trade based on comparative advantage

A) reduces the need for Asian tigers.
B) turns NICs into WHIPs.
C) reduces transaction costs.
D) facilitates political control.
E) raises living standards.

Question 5

The movement of people across international borders is

A) an alternative to globalization.
B) a result of the race to the bottom.
C) greatly limited by government policies.
D) a buffer against speculative attacks.
E) all of these.

Question 6

The forces that drive globalization

A) focus on fairness and equality.
B) are a result of World War II.
C) have existed as long as humans have been around.
D) were initiated in the United States.
E) are all of these.

Question 7

After the September 11, 2001 terrorist attacks in the United States,

A) world trade fell.
B) political engagement increased.
C) international telephone calls increased.
D) Internet usage increased.
E) all of these occurred.

Question 8

Even though transportation is much easier today and people have the right to move, many choose to stay in a particular area because

A) job opportunities are always better near home.
B) family, language and customs tie people to particular areas.
C) immigration laws are very strict.
D) it is very expense of moving to another location.
E) of fears of terrorism.

Question 9

Globalization is characterized by increased trade in

A) goods.
B) services.
C) financial assets.
D) technology.
E) all of these.

Question 10

The substantial increase in the volume of international telephone calls is due to all of the following except:

A) the decrease in price of international telephone calls.
B) the increase in the number of Internet users.
C) concerns about safety of international travel.
D) the increase in technology
E) the demise of telegram services.

Question 11

Today, world trade as a fraction of world GDP is about the same as it was

A) at the end of the 19^th century
B) at the beginning of World War I
C) at the end of World War I
D) at the beginning of World War II
E) at the end of World War II

Question 12

Most of the countries that are closed to global trade are

A) social democracies.
B) among the poorest countries in the world.
C) oil-rich countries.
D) among the largest economies and therefore do not need to trade with other countries.
E) geographically isolated from the rest of the world.

Question 13

In addition to economic dimensions, globalization has ____ and ____ dimensions.

A) chemical; biological
B) accounting; intuitive
C) clerical; art history
D) friendly; unfriendly
E) political; social

Question 14

European exploration and colonization of the Americas could be interpreted as

A) intraindustry trade.
B) globalization.
C) increasing returns-to-scale tariffs.
D) quantity-value subsidies of exploration.
E) a race to the bottom.

Question 15

Which of the following is not one of the categories used in the Foreign Policy globalization rankings?

A) Political engagement
B) Technology
C) Personal contact
D) Personal economics
E) Economic integration

Question 16

The economic basis for trade is

A) the race to the bottom.
B) speculative attacks.
C) insourcing.
D) comparative advantage.
E) none of these.

Question 17

During the period between World War I and World War II, the value of international trade

A) shifted from goods to services.
B) expanded with the creation of the Internet.
C) neither increased nor decreased.
D) was controlled by the United Nations.
E) declined.

Question 18

The pace of globalization is affected by technological change and

A) population control.
B) environmental movements.
C) declining transportation costs.
D) education levels.
E) political stability.

Question 19

For countries with large domestic markets, international trade is usually

A) not important.
B) more important than ever.
C) a relatively small fraction of GDP.
D) limited to technical goods.
E) controlled by domestic market policies.

Question 20

Over time, globalization has progressed at an uneven rate due to the uneven pace of ____ and ____.

A) technological change; wars
B) government support; airline schedules
C) economic integration; social contact
D) personal digitalization; interpersonal communication
E) organizational commitment; social acceptance

Question 21

After opening their economies in the 1960s and 1970s, the Asian tiger economies experienced

A) rapid growth and increased living standards.
B) domination by multinational corporations.
C) subsidies from world development organizations.
D) reduced incomes because workers were displaced.
E) no noticeable changes.

Question 22

The World Bank is often criticized by opponents to globalization for

A) financing projects benefiting multinational corporations.
B) investing too much in micro enterprises.
C) supporting free trade agreements.
D) providing too much investment to the United States.
E) forcing austerity programs on monetary authorities in developing countries.

Question 23

Which of the following is not an international organization involved in globalization?

A) World Trade Organization
B) International Monetary Fund
C) World Bank
D) Asia-Pacific Economic Cooperation
E) None - all of these are international organizations involved in globalization.

Question 24

When laws protecting domestic businesses are eliminated, the businesses that suffer the most are

A) manufacturers.
B) those that competed directly with multinational corporations.
C) those that existed only because of protection.
D) tourist-oriented businesses because of the influx of business travelers.
E) only agricultural businesses.

Question 25

The evidence from globalization studies is that the real losers in globalization are

A) those countries that have not participated.
B) agrarian countries.
C) industrial workers.
D) social democracies.
E) none of these; there have been no losers.

Question 26

Free trade helps developing countries when

A) multinational corporations take over government infrastructure projects.
B) the government subsidizes local production.
C) the government blocks foreign investment.
D) workers lose their jobs.
E) restrictions on goods that developing countries produce efficiently are removed.

Question 27

During the 1970s, 1980s, and 1990s, economic growth in the newly industrialized countries ____, while economic growth in rich countries ____.

A) stagnated; expanded
B) increased; declined
C) decreased; increased
D) remained constant; declined
E) remained constant; increased

Question 28

If industrialized countries impose environmental constraints, manufacturers may seek opportunities in poor countries that do not have or do not enforce environmental constraints. This practice is known as the

A) production sharing system.
B) race to the bottom.
C) cost-profit equation.
D) speculative spread.
E) shark attack.

Question 29

Multinational corporations, locating in developing countries, increasingly are producing products

A) aimed at local markets.
B) designed for export.
C) that avoid environmental regulatory requirements.
D) of poor quality.
E) that are all of these.

Question 30

Supporters of globalization believe that the connection between globalization and environmental harm

A) does not exist.
B) exists only in theory.
C) is weak.
D) is documented by a wide array of literature.
E) is a result of the efforts of multinational corporations.

Question 31

The perception that globalization leads countries to compete by lowering environmental and labor standards is called the

A) survival of the fittest.
B) economic Darwinism theory.
C) international social compact.
D) race to the bottom.
E) multinational manifesto.

Question 32

International organizations like the WTO and World Bank provide

A) subsidies for multinational corporations.
B) alternative investment opportunities for investors seeking diversity.
C) a forum for discussing changes in the global economy.
D) a basis for taxing global production.
E) international environmental management advice.

Question 33

Which of the following is not one of the conclusions of the World Bank study on globalization in the Asian tiger countries?

A) Multinational corporations have less power.
B) Economic growth has increased with globalization.
C) Income inequality has not increased.
D) The gap between rich countries and globalized developing countries has shrunk.
E) Poverty has been reduced.

Question 34

The World Trade Organization is a group of ____ that negotiates ____.

A) lenders; credit opportunities
B) corporations; working rules
C) socialists; world order
D) capitalists; investment agreements
E) countries; international trade agreements

Question 35

Critics of globalization claim it has primarily

A) enriched corporate elites.
B) helped only the agrarian poor.
C) allowed countries to compete too fairly.
D) stimulated too much discussion about the environment.
E) done all of these.

Question 36

The fact that wages are lower in Vietnam than in the United States or Europe, yet there are often waiting lines of people seeking work at a multinational firm in Vietnam, is evidence that

A) Vietnamese workers are exploited.
B) these jobs are better than alternatives available to the Vietnamese workers.
C) the government of Vietnam needs to raise the minimum wage.
D) wages are too high in the United States and Europe.
E) all of these are true.

Question 37

One of the major attractions for multinational companies opening factories in China is

A) the opportunity to do business in a communist society.
B) being associated with the "Expo 2010 Shanghai China" world trade fair.
C) the prospect of selling in the huge Chinese market.
D) the ability to transfer technology to a developing country.
E) longer working hours and stricter union enforcement.

Question 38

Critics argue that free trade agreements

A) are too fair.
B) are unfair to international businesses.
C) offer goods too freely.
D) transfer power from international organizations to local groups.
E) put people out of jobs.

Question 39

The World Trade Organization primarily creates ____ for international trade.

A) rules
B) tariffs
C) quotas
D) financial assistance
E) technical cooperation

Question 40

Critics of globalization suggest globalization can cause harmful labor practices if

A) multinational corporations locate where workers' rights are ignored.
B) on-the-job safety is ignored.
C) child and prison labor is exploited.
D) low-cost labor replaces workers in industrialized countries.
E) all of these occur.

Question 41

In the Mexican financial crisis, investors

A) bought both peso-denominated assets and dollar-denominated assets.
B) sold both peso-denominated assets and dollar-denominated assets.
C) sold peso-denominated assets and bought dollar-denominated assets.
D) bought peso-denominated assets and sold dollar-denominated assets.
E) did all of these.

Question 42

A short-term debt to international reserves ratio of greater than 100 percent means that

A) the country is financially sound.
B) bankers are borrowing too much.
C) there is not enough reserves to meet international settlements.
D) the stock market is overheated.
E) foreign direct investment exceeds portfolio investment.

Question 43

Measuring globalization involves measurement of the international movements of goods, services, financial assets, people, ideas, and technology.

Question 44

In most of the financial crises during the 1990s, the countries

A) owed substantial short-term debt to foreigners.
B) had just converted from communism.
C) did not borrow enough from the World Bank.
D) were overthrowing dictators.
E) had converted short-term debt to long-term debt.

Question 45

Which of the following statements is true about financial crises?

A) Defaults on bank loans reduce lending and investing, thus hampering economic growth.
B) Currencies appreciate to offset losses in the financial markets.
C) High short-term debt to international reserves ratios protects the country's currency.
D) Stock markets rise.
E) All of these are true.

Question 46

Private investors sell domestic currency and buy foreign currency, betting that the domestic currency will be devalued. This type of action is called a

A) speculative attack.
B) race to the bottom
C) senior subordinated debenture.
D) fixed exchange rate hedge.
E) commercial policy shift.

Question 47

One of the poorest countries in the world, North Korea, is a leader in regional globalization.

Question 48

Which of the following statements is incorrect?

A) Globalization has resulted in faster economic growth and reductions in poverty.
B) To avoid globalization in order to avoid financial crises is to remain in poverty as the rest of the world grows richer.
C) A closed economy can follow very bad economic policies for a long time.
D) Globalization allows the rest of the world to respond to bad economic policies in a way that highlights the bad policy.
E) A country with sound economic policy and good investment opportunities is rewarded with large flows of savings from the rest of the world to increase the cost of developing the local economy.

Question 49

Which of the following countries was not involved in a major financial crisis during the 1990s?

A) India
B) Mexico
C) Indonesia
D) Thailand
E) South Korea

Question 50

With a fixed exchange rate, when the quantity supplied exceeds the quantity demanded, the central bank must intervene in the foreign exchange market and

A) buy reserve currencies and the domestic currency.
B) sell reserve currencies and the domestic currency.
C) support stock market prices.
D) sell reserve currencies and buy the domestic currency.
E) sell bank stocks to support consumer confidence.

Question 51

The financial crises of the 1990s were caused by

A) fixed exchange rates.
B) falling international reserves.
C) lack of transparency.
D) short-term international investment.
E) all of these.

Question 52

During the financial crises of the 1990s, businesses and individuals

A) flourished while the financial markets collapsed.
B) offered loans to the government to prevent problems.
C) shifted assets to the stock market to take advantage of the crises.
D) defaulted on bank loans, expanding the crises.
E) did all of these.

Question 53

Most intelligent people agree that there are no negative side effects associated with globalization.

Question 54

There is much more movement of people across international borders today than 100 years ago.

Question 55

If investors think the value of financial assets in a country will fall, they will

A) sell those assets and buy assets in another currency.
B) sell those assets and buy currency.
C) buy those assets and sell currency.
D) buy those assets and sell other countries' currencies.
E) do none of these; investors are not influenced by changes in the value of financial assets.

Question 56

International trade and foreign direct investment are major factors in measuring global political engagement.

Question 57

According to the World Bank study, income inequality in China has not decreased because of

A) competition from Taiwan.
B) IMF austerity measures.
C) government policies restricting migration.
D) social free market competition.
E) transportation and population centers being located on the east coast.

Question 58

Which of the following is not one of the Asian tiger countries?

A) Hong Kong
B) South Korea
C) China
D) Taiwan
E) Singapore

Question 59

The greater the amount of short-term money invested in a country, the

A) stronger the domestic currency.
B) greater the degree of globalization.
C) greater the potential for a financial crisis.
D) lesser the chance of a speculative attack.
E) greater the long-term economic development potential.

Question 60

Massive demonstrations against globalization have occurred at WTO, IMF, and World Bank meetings.

Question 61

International organizations are funded by corporations, not governments.

Question 62

Critics of globalization view international organizations as tools of corporations whose aim is to increase profits.

Question 63

Stories about sweat shops in developing countries producing goods for consumers in industrialized countries contribute to the criticism that globalization encourages harmful labor practices.

Question 64

Critics of globalization believe it has done more good than harm.

Question 65

The 1990s provided several dramatic episodes of financial crises in developing countries.

Question 66

Supporters of globalization believe that free trade and international investment result in an increase in living standards in all countries.

Question 67

Supporters of globalization believe it has raised living standards.

Question 68

During financial crises, currencies tend to appreciate.

Question 69

The term race to the bottom refers to multinational corporations trying to find the most efficient source of supply.

Question 70

Japan followed the lead of the other Asian tiger countries.

Question 71

Supporters of globalization believe that free trade agreements administered by the WTO offer few benefits to developing countries.

Question 72

Some studies have shown that globalization narrows the income gap between rich and poor countries.

Question 73

The World Trade Organization is part of the United Nations.

Question 74

Another name for the Asian tiger countries is NICs.

Question 75

Vietnam is the leading post-1980 globalizing NIC country.

Question 76

Countries not engaged in globalization tend to be mired in low-growth poverty.

Question 77

The fact that multinational corporations can find workers in developing countries to work for wages much lower than those in industrialized countries is evidence of exploitation.

Question 78

The primary international reserve asset is gold.

Question 79

Evidence from around the world indicates that the real losers in the globalization of the world economy are political leaders who espouse globalization.

Question 80

Financial crises result in declining stock markets.