Deck 1: Globalization and International Linkages

Question 1

One of the factors that contributed to the early success of the Japanese economy is the presence of chaebols.

Answer 1

False
Explanation: One of the factors that contributed to the early success of the Japanese economy is the Ministry of International Trade and Industry (MITI). This is a governmental agency that identifies and ranks national commercial pursuits and guides the distribution of national resources to meet these goals.

Question 2

In the context of the changing global demographics,elderly populations spend money on housing and other capitally financed purchases.

Answer 2

False
Explanation: While elderly populations spend money on health care services, younger populations spend income on housing and other capitally financed purchases.

Question 3

Hungary's economy was the only economy in the EU to continue to grow during the global recession of 2008-2009.

Answer 3

False
Explanation: Poland's economy was the only economy in the European Union to continue to grow during the global recession of 2008-2009. In 2015, Poland's GDP grew by around 4 percent. Although the relatively swift transition to a market economy has been very difficult for the Polish people, with very high inflation initially, continuing unemployment, and the decline of public services, Poland's economy has done relatively well.

Question 4

General Electric (GE)has strategically leveraged social media to improve its long-term brand image.

Question 5

Monopolies are a danger to the market economy system because they tend to stifle economic growth.

Question 6

China remains a major risk for investors because they are required to maintain a delicate balance between the country's communist and capitalist systems.

Question 7

In a command economy,a general balance between supply and demand sustains prices,while an imbalance creates a price fluctuation.

Question 8

The United States has considerable foreign direct investment in Germany,more than in any other country.

Question 9

An increase in the ease of travel between countries is an important development that has occurred because of the North American Free Trade Agreement (NAFTA).

Question 10

Foreign direct investment has been falling alarmingly since the global recession of 2009 in most regions of the world.

Question 11

The Brazilian economy outweighs that of any other South American country with an economic output comparable to that of France.

Question 12

Despite being unable to take full advantage of globalization,there is still hope in the future for Africa because the potential of African countries remains virtually untapped.

Question 13

About 46 percent of employees in both the United States and Russia would prefer a work schedule that fluctuates between work and leisure,mirroring a pattern of recurring sabbaticals.

Question 14

North American Free Trade Agreement (NAFTA)members are better integrated as a single market than the European Union (EU)or the allied Asian countries.

Question 15

Internationalization is the vision of creating one world unit,a single market entity.

Question 16

The economy of Argentina outweighs that of any other South American country with an economic output comparable to that of France and has become a worldwide presence.

Question 17

According to a Goldman Sachs global economics team report,it is estimated that the economies of Brazil,Russia,India,and China,which it collectively coined as the "BRIC" nations,will surpass the collective economies of the G7 nations by 2032.

Question 18

In the context of the emerging markets of Asia,India is attractive to multinationals,especially U.S.and British firms.

Question 19

The ultimate objective of the European Union (EU)is to eliminate all trade barriers among member countries.

Question 20

Singapore has emerged as an urban planner's ideal model and the leader and financial center of Southeast Asia.

Question 21

The Asian economic block,made up of Indonesia,Malaysia,the Philippines,Singapore,Brunei,Thailand,Cambodia,Myanmar,and Vietnam,is referred to as the:

A) Association of Southeast Asian Nations (ASEAN).
B) Southeast Asia Free Trade Agreement (SWAFTA).
C) Southeast Asia Common Market.
D) Asian Economic Union.

Question 22

The United States,Canada,and Mexico make up the _____,which in essence has removed all barriers to trade among these countries and created a huge North American market.

A) General Agreement on Tariffs and Trade
B) North American Common Market
C) North American Free Trade Agreement
D) North American Trade Union

Question 23

A method that adjusts GDP to account for different prices in countries is called:

A) cumulative distribution function.
B) nominal GDP.
C) current currency exchange rate.
D) purchasing power parity.

Question 24

Unlike the Group of Seven (G7)economies,the Emerging Seven (E7)economies are:

A) primarily located in North America and Europe.
B) located throughout Latin America and Asia.
C) mature economies in which economic growth is slow.
D) incentivizing citizens to have more children.

Question 25

The _____ is a free-trade agreement among the United States,Canada,and Mexico that has removed most barriers to trade and investment.

A) AFTA
B) EFTA
C) CAFTA
D) NAFTA

Question 26

By 2017,foreign direct investment (FDI)is estimated to:

A) surpass the all-time high set a decade earlier in 2007.
B) reach an all-time low due to political instability and uncertain markets.
C) experience a significant drop similar to the global recession of 2009.
D) experience an insignificant rise due to a slow rate of increase of merchandise exports.

Question 27

The _____ is the global organization of countries that oversees rules and regulations for international trade and investment,including agriculture,intellectual property,services,competition,and subsidies.

A) WTO
B) NAFTA
C) WIPO
D) ITO

Question 28

Identify a true statement about the Development Round in which the members of the World Trade Organization (WTO)met and launched a round of negotiations at Doha,Qatar in November 2011.

A) The WTO members agreed upon the opening of government procurement markets to companies in the developed nations.
B) There was a lack of consensus among WTO members regarding agricultural subsidies.
C) There was a lack of consensus among WTO members regarding unbalanced population pyramids.
D) The WTO members agreed upon the issues of competition.

Question 29

To qualify as a multinational corporation (MNC),a firm must meet all of the following criteria except:

A) operations in more than one country.
B) international sales.
C) a mix of nationalities among managers and owners.
D) sales of at least one million dollars per year.

Question 30

According to some critics,agreements like North American Free Trade Agreement (NAFTA)and Central American Free Trade Agreement (CAFTA):

A) have been successful in ensuring environmental standards.
B) have been successful in preventing the decline of the global working-age population.
C) do not go far enough in ensuring worker rights.
D) do not go far enough in protecting property rights.

Question 31

_____ is the process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic,political,and cultural environments.

A) Strategic management
B) Internationalization
C) Globalization
D) International management

Question 32

Agreements like NAFTA and CAFTA:

A) not only reduce barriers to trade but also require additional domestic legal and business reforms in developing nations to protect property rights.
B) do not include supplemental commitments like the FTAA does on labor and the environment to encourage countries to upgrade their working conditions and environmental protections.
C) rely exclusively on MNCs exporting or setting up operations locally rather than buying out a domestic firm.
D) provide firms with enough security so they cannot go out of business, which simply encourages a lack of efficiency or incentive to monitor costs.

Question 33

In 2009,global FDI _____.

A) nearly doubled
B) nearly tripled
C) dropped substantially
D) remained fairly constant

Question 34

According to the World Trade Organization,in 2014 merchandise exports:

A) reached a record high.
B) declined for the first time since 1983.
C) remained fairly consistent.
D) decreased by almost 50 percent.

Question 35

The subcontracting or contracting out of activities to external organizations that had previously been performed by a firm is called _____.

A) homesourcing
B) insourcing
C) offshoring
D) outsourcing

Question 36

In the context of the changing global demographics,identify a change that will be seen in developed nations.

A) Developed Asian nations will be able to easily replace the retiring, aging population.
B) In Japan, the number of nonworkers will be nearly equal to that of workers by 2050.
C) In South Korea, the immigration policy will ease by 2050.
D) In Germany, there will be a removal of restrictions on agricultural products, auto parts, and energy goods.

Question 37

_____ is the process by which companies undertake some activities at offshore locations instead of in their countries of origin.

A) Homesourcing
B) Insourcing
C) Offshoring
D) Globalization

Question 38

_____ is the term used to indicate the amount invested in property,plant,and equipment in another country.

A) Exporting
B) Foreign direct investment
C) Importing
D) Trade imperfection

Question 39

Which of the following statements is true according to the reports that were released in 2004 and 2011 by the Goldman Sachs global economics team?

A) The economies of Russia and Brazil would remain unaffected by the low prices for oil and other commodities in the years 2015 and 2016.
B) The BRIC (Brazil, Russia, India, and China) economies' share of world growth could rise significantly from 2003 to 2025.
C) The economies of Indonesia, Mexico, and Turkey could expand significantly in the coming decades.
D) The E7 (Brazil, China, India, Indonesia, Mexico, Russia, and Turkey) economies would mature and slow down in terms of market exchange rates.

Question 40

Critics of globalization believe that:

A) the offshoring of business services jobs to lower-wage countries inherently creates greater opportunities at home.
B) growing trade deficits and slow wage growth are damaging economies.
C) when production moves to countries to take advantage of less-regulated environments, an upward pressure is created on wages and working conditions.
D) the main winners of globalization are the low-wage workers.

Question 41

The ultimate objective of the European Union is to:

A) develop separate custom duties for member countries.
B) eliminate all trade barriers among member countries.
C) have a single government that represents all European Union countries.
D) increase imports into European Union countries.

Question 42

U.S.firms maintain particularly dominant global positions in all of the following industries except:

A) telecommunications.
B) biotechnology.
C) media.
D) textiles.

Question 43

A _____ exists when private enterprise reserves the right to own property and monitor the production and distribution of goods and services while the state simply supports competition and efficient practices.

A) command economy
B) market economy
C) mixed economy
D) socialist economy

Question 44

Unlike a market economy,a command economy is characterized by:

A) private ownership of businesses.
B) an appropriate response to consumers' stated needs and desires.
C) insufficient security provided by government subsidies.
D) an ignorance of demographic information by management.

Question 45

_____ is the United States' largest trading partner,a position it has held for many years.

A) England
B) Canada
C) Japan
D) Mexico

Question 46

A major development in South America is:

A) the implementation of a single currency and a regional central bank.
B) the growth of intercountry trade, spurred on by the progress toward free-market policies.
C) the privatization of traditionally nationalized industries.
D) the elimination of all trade barriers among member countries.

Question 47

In the context of established economies,the European Union:

A) has largely achieved the reality of a single currency and a regional central bank.
B) has eliminated all trade barriers among member countries.
C) subjects member nations to quotas on the manufacture and shipment of high-quality, low-cost goods.
D) imposes duties on member nations for the manufacture and shipment of high-quality, low-cost goods.

Question 48

After becoming part of the North American Free Trade Agreement (NAFTA)in 1994,Mexico:

A) exhibited significant economic stability.
B) was able to take advantage of the U.S. market.
C) experienced a tremendous increase in transportation costs.
D) experienced a significant increase in labor costs.

Question 49

By the early 1990s _____ had recovered from its economic problems of the previous decade and had become the strongest economy in Latin America.

A) Brazil
B) Argentina
C) Mexico
D) Chile

Question 50

The Trans-Pacific Partnership (TPP)is a trade agreement among 12 Pacific Rim countries,including:

A) Peru, the United States, and Vietnam.
B) Great Britain, New Zealand, and China.
C) India, Canada, and Australia.
D) Singapore, Russia, and Chile.

Question 51

A _____ is comparable to a monopoly in the sense that an organization,in this case the government,has explicit control over the price and supply of a good or service.

A) command economy
B) market economy
C) mixed economy
D) socialist economy

Question 52

In the context of established economies,the United States has considerable foreign direct investment in _____.

A) the Netherlands
B) Mexico
C) the United Kingdom
D) Canada

Question 53

Identify a characteristic of a market economy.

A) The state reserves the right to monitor the production and distribution of goods and services.
B) Private enterprises reserve the right to own property.
C) Monopolies boost economic growth.
D) Competition is discouraged because it hinders penetration into niche markets.

Question 54

Which of the following economies is projected to become the largest by 2050 using market exchange rates?

A) China
B) India
C) Australia
D) Brazil

Question 55

In the context of established economies,which of the following observations about NAFTA is incorrect?

A) Mexican businesses are able to take advantage of the U.S. market by producing goods for that market that were previously purchased from Asia.
B) Mexican firms are now able to produce products at highly competitive prices thanks to lower-cost labor and proximity to the American market.
C) Mexican firms can now export goods into the European community only by paying a heavy tariff.
D) Mexico's trade with Asia is on the rise, which is important to the country as it wants to reduce its overreliance on the U.S. market.

Question 56

A factory,the majority of which are located in Mexican border towns,that imports materials and equipment on a duty- and tariff-free basis for assembly or manufacturing and re-export is referred to as _____.

A) a vertically integrated corporation
B) a keiretsu
C) a maquiladora
D) a governmental agency

Question 57

The challenge for the future of the European Union is to:

A) have common custom duties.
B) have unified industrial and commercial policies.
C) be able to manufacture high-quality, low-cost goods.
D) absorb its eastern neighbors.

Question 58

Which of the following statements is true of the economic system of North America?

A) The free-market-based economy of this region allows considerable freedom in decision-making processes of private firms.
B) The command economy of this region allows for high flexibility with decisions and low barriers for other countries to establish business.
C) The free-market-based economy of this region results in low trade barriers when attempting to move into other countries.
D) The command economy of this region allows competition to strive while the government can extend assistance to individuals or companies.

Question 59

In the context of the shifting balance of economic power in the global economy,which of the following factors has helped boost incomes and wealth in the African continent between 2000 and 2015?

A) A one-child policy
B) An increase in the price of agricultural products
C) An increase in the size of the elderly population
D) An easy immigration process for workers

Question 60

A survey of businesspeople from Argentina,Brazil,Chile,Columbia,and Venezuela found that the _____ market,on average,was more important for their economic well-being than any other market.

A) Mexican
B) Japanese
C) U.S.
D) European Union

Question 61

List the important economic developments that have occurred because of the North American Free Trade Agreement (NAFTA).

Question 62

Ministry of International Trade and Industry (MITI)is a _____ government agency that identifies and ranks national commercial pursuits and guides the distribution of national resources to meet these goals.

A) Chinese
B) Japanese
C) South Korean
D) Philippine

Question 63

A _____ can be defined as an organizational arrangement in Japan in which a large,often vertically integrated group of companies cooperate and work closely with each other to provide goods and services to end users.

A) vertically integrated corporation
B) keiretsu
C) maquiladora
D) chaebol

Question 64

Discuss the factors that contributed to Japan's phenomenal economic success.

Question 65

Which of the following statements is true about the economy of Poland?

A) The consensus decision-making system of Poland turns out to be too time-consuming in the new speed-based economy.
B) During the 1970s and 1980s, Poland's economic success had been without precedent.
C) Poland is among the largest of the former communist countries that receive the least media coverage.
D) Poland's economy was the only economy in the European Union to grow during the global recession of 2008-2009.

Question 66

What is a multinational corporation? Why would a company want to be a multinational corporation?

Question 67

In the context of global economic systems,explain a market economy.

Question 68

In the context of established economies,despite setbacks,_____ remains a formidable international competitor and is well poised in all three major economic regions: the Pacific Rim,North America,and Europe.

A) Japan
B) Chile
C) China
D) Argentina

Question 69

In the context of emerging and developing economies,identify a true statement about India.

A) The overwhelmingly diverse people of India mostly speak tribal languages and dialects.
B) Its political instability is pervasive, which generates substantial risks for foreign investors.
C) Indians are known for their advanced information technology expertise.
D) Indian government is unable to provide funds for economic development.

Question 70

In the context of emerging and developing economies,identify a true statement about China.

A) Multinational corporations find it extremely easy to do business in and with China because of the undervaluation of the Chinese currency.
B) China's policy toward its foreign investors is rigid yet predictable.
C) Trade relations between China and developed countries and regions have significantly improved after the revaluation of the Chinese currency.
D) Foreign businesses need to maintain a delicate balance between the communist and the capitalist systems in China.

Question 71

Describe how the European Union (EU)has made significant progress over the past decade in becoming a unified market.

Question 72

In _____,chaebols are very large,family-held conglomerates that have considerable political and economic power.

A) Thailand
B) Japan
C) South Korea
D) China

Question 73

In addition to Japan and China,the important economies in Asia are:

A) South Korea, Hong Kong, Singapore, and Taiwan.
B) Indonesia, South Korea, Japan, and Taiwan.
C) Thailand, South Korea, Indonesia, and Hong Kong.
D) Singapore, South Korea, Indonesia, and Thailand.

Question 74

In the context of emerging and developing economies in Central and Eastern Europe,which of the following is a pervasive challenge in Russia?

A) Privatization
B) Dismantling of Russian price controls
C) Lack of public security
D) Expansion of the middle class

Question 75

Russia,_____ receive the most media coverage and are among the largest of the former communist countries.

A) Romania, Poland, and Bulgaria
B) Czech Republic, Bulgaria, and Poland
C) Hungary, Romania, and Albania
D) Poland, Hungary, and the Czech Republic

Question 76

Which of the following countries was not among the world's 10 most competitive nations in 2015?

A) Germany
B) Singapore
C) Mexico
D) Norway