Deck 1: Globalisation

Question 1

When a firm invests resources in business activities outside its home country,giving it control over those activities,it is referred to as:

A)international trade.
B)domestic direct investment.
C)transnational barter.
D)foreign direct investment.

Answer 1

D

Question 2

Critics of globalisation argue that falling trade barriers and the costs of production allow firms to move manufacturing operations to countries where the wage rates are much lower than in Australia.Supporters of globalisation reply to these criticisms and trends to make the point that:

A)the benefits outweigh the costs.
B)the costs outweigh the benefits.
C)costs are offset by concentrating on product and market factors.
D)consumers benefit in the long run.

Answer 2

A

Question 3

Changes in China are creating both opportunities and threats for established international business.

Answer 3

True

Question 4

During the Global Financial Crisis (GFC),the main reasons for the decline in global production were through a severe drop in consumer demand and an inability to finance international trade due to tight credit controls.

Question 5

Offshoring,which means that the tasks previously performed in one country are now being undertaken abroad,is accepted widely by __________,but not as much by _________ at this time.

A)manufacturing;services
B)management;unions
C)governments;corporations
D)the home country;the host country

Question 6

Part of Boeing's rationale for outsourcing so much of its production to foreign suppliers is that these suppliers are the best in the world at their particular activity.

Question 7

A goal of Komatsu was to become 'truly global'.To be truly global is exemplified by:

A)replicating existing domestic products and operations in foreign locations.
B)ensuring most key management decisions are made by foreign nationals.
C)more autonomy for local managers in foreign markets and less reliance on expatriate managers.
D)more women occupying key management positions in the organisation.

Question 8

The European Union Central Fund (EUCP)has replaced that of the International Monetary Fund (IMF).

Question 9

A company does not have to be the size of multinational corporations to facilitate and benefit from the globalisation of markets.In Australia,for example,______irms that export are small businesses employing fewer than ______employees.

A)57%;10
B)67%;15
C)42%;20
D)87%;25

Question 10

The globalisation of ________ refers to the shift towards a more integrated and interdependent world economy.

A)corporations
B)production
C)markets
D)culture

Question 11

The globalisation of _________ refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labour,energy,land and capital).

A)information technology
B)process design
C)markets
D)production

Question 12

The Group of Twenty (G20)is an international forum comprising the government representatives of the G8 and a selection of other economies who have global economic issues they wish to address at the forum.

Question 13

Which of the following refers to the exporting of goods or services to consumers in another country?

A)situational commerce
B)world exchange
C)international trade
D)cross-national barter

Question 14

Two macro factors that underlie the trend towards greater globalisation are (1)the decline in barriers to the free flow of goods,services and capital;and (2)the dramatic developments in recent years in information and communication technologies and transportation.

Question 15

An international business is any firm that engages in exporting.

Question 16

Over the past two decades,the globalisation of markets in the services sector has overtaken that of goods manufacturing.

Question 17

The most global of markets are for industrial goods and materials that serve a universal need around the world rather than for consumer products.

Question 18

Offshoring is a special form of outsourcing.

Question 19

The most global of brand names is in what area?

A)services
B)consumer goods
C)industrial goods
D)intellectual capital

Question 20

Although Boeing is incorporated in the United States,eight Japanese suppliers make parts for the fuselage,doors and wings;a supplier in Singapore makes the doors for the nose landing gear;and three suppliers in Italy manufacture wing flaps.Boeing is taking part in:

A)exporting.
B)licensing.
C)outsourcing.
D)franchising.

Question 21

Although outsourcing has been primarily confined to ______increasingly,companies are taking advantage of outsourcing for ________.

A)services;manufacturing
B)manufacturing;services
C)mining;manufacturing
D)manufacturing;mining

Question 22

With membership of 193 countries,the ______s established to preserve peace through international cooperation and collective security.

A)World Monetary Fund
B)International Monetary Fund
C)International Bank
D)United Nations

Question 23

Globalisation results in a greater degree of ________ across markets and __________ in the world economy than would be present otherwise.

A)diversification;homogeneity
B)diversity;complexity
C)integration;interdependency
D)isolation;independence

Question 24

One of the key adaptations of the Indian-based global conglomerate,the Tata Group,for home and international markets was to consider:

A)free delivery to customers who repeat purchase.
B)subsidised customer parking.
C)a customised assembly service and delivery.
D)car designs for small-space living in high-rise apartments.

Question 25

Evidence suggests that foreign direct investment is playing:

A)a decreasing role in the world economy.
B)an increasing role in the world economy for services but a decreasing role in the world economy for manufactured goods.
C)an increasing role in the world economy for manufactured goods but a decreasing role in the world economy for services.
D)an increasing role in the world economy.

Question 26

Due to containerisation and transportation technology,the transportation costs associated with the globalisation of production have:

A)remained the same.
B)increased dramatically.
C)declined.
D)increased slightly.

Question 27

In establishing their credentials,companies such as McDonald's hamburgers,Samsung phones and Apple iPads apply the same basic formula worldwide,which is to:

A)standardise its product offerings,and then adapt to local conditions.
B)adapt its product offerings,and then standardise to local conditions.
C)outsource manufacturing to key suppliers.
D)open large warehouses under franchise agreement.

Question 28

The investing of resources in business activities outside a firm's home country is referred to as:

A)international trade.
B)domestic direct investment.
C)transnational barter.
D)foreign direct investment.

Question 29

Promoting economic development,primarily by offering low-interest loans to governments of poorer nations,is the purpose of:

A)the United Nations.
B)the International Monetary Fund.
C)the World Trade Organization.
D)the World Bank.

Question 30

The flow of foreign direct investment experienced a major temporary setback during which years?

A)1990-99
B)2000-07
C)2008-09
D)2010-11

Question 31

______een as the lender of last resort to nation-states whose economies are in economic turmoil and whose currencies are losing value against those of other nations.

A)The International Monetary Fund
B)The International Bank
C)The United Nations
D)The United States

Question 32

The term 'offshoring':

A)is synonymous with outsourcing.
B)means that the tasks previously performed in one country are now being undertaken abroad.
C)means shoring-up intellectual capital.
D)means that the tasks that were previously performed in-house are now purchased from another country.

Question 33

________ is the theory that predicts that the power of microprocessor technology doubles and its cost of production falls every 18 months.

A)Brennan's Theorem
B)Bailey's Law
C)Moore's Law
D)Ivan's Law

Question 34

____________he two macro factors that seem to underlie the trend towards greater globalisation.

A)The increase in global economic stability;and the slowdown in technological change
B)The increase in barriers to the free flow of goods,services and capital that has occurred since the end of World War Two;and global economic stability
C)The decline in barriers to the free flow of goods,services and capital that has occurred in the past 10 years;and the slowdown in technological change
D)The decline in barriers to the free flow of goods,services and capital that has occurred since the end of World War Two;and increased technological change

Question 35

When discussing foreign direct investment,it is important to distinguish between the flow of FDI and the _______ of FDI.

A)outflow
B)inflow
C)stock
D)trade

Question 36

One measure of the sustainability,or 'carbon footprint',of food production is 'food miles'-that is,the distance the food travels to reach the supermarket shelves.Food producers who are carbon efficient in their food production,and are concerted in their efforts on environmental protection,are likely to have:

A)a distinct advantage.
B)an absolute advantage.
C)a comparative advantage.
D)a competitive advantage.

Question 37

The ____________ subsumed under the World Trade Organization)is a treaty designed to remove barriers to the free flow of goods,services and capital between nations.

A)Global Agreement on Tariffs and Commerce
B)United Nations Treaty on Trade
C)General Agreement on Tariffs and Trade
D)Multinational Agreement on Tariffs and Commerce

Question 38

According to the textbook,between 1930 and 1990,the cost of a 3-minute phone call between New York and London fell from USD$244.65 to USD$3.32.By 1998,it had plunged to just USD$0.36 cents for consumers,and much lower rates for businesses.All of these changes are due to:

A)the Dial Subscriber Network(s).
B)international dialler subscriptions.
C)the internet.
D)the latest in the NBN telecommunications processes.

Question 39

The most global of markets is in what area?

A)services
B)consumer goods
C)industrial goods
D)intellectual capital

Question 40

An international treaty that committed signatories to lowering barriers to the free flow of goods across national borders is called:

A)the International Agreement on Trade.
B)the Global Expansion Agreement.
C)the Warsaw Pact.
D)the General Agreement on Tariffs and Trade.

Question 41

A sovereign wealth fund is a:

A)government-controlled fund that manages and invests government savings.
B)privately controlled fund that manages and invests private sector savings.
C)pseudo-controlled fund that manages both private and government savings.
D)savings fund for the benefit of countries in the Commonwealth only.

Question 42

Managing an international business is different from managing a domestic business and is more challenging due to a variety of reasons including country differences;a wider range of more complex problems;the greater intensity of competition;increased likelihood of intervention by governments,home and host;and:

A)barriers to cross-border trade and investment are said to be flat or dormant.
B)outsourcing is increasing due to worldwide productivity.
C)added complexity of conducting transactions in different countries.
D)national economies are becoming increasingly interdependent on each other.

Question 43

The Group of Twenty (G20)is an international forum comprising the government representatives of the G8 and other economies,including the emerging economies of Brazil,China and India,as a reflection of their rising global economic and political power to:

A)achieve economic dominance over the rest of the world.
B)ensure authoritarian governments shift in emphasis towards more democratic controls.
C)help facilitate continuing globalisation and trade liberalisation.
D)predict shifts (along with their attendant risks)in the economic,political,social,technological and environmental structures of the worlD.

Question 44

One concern of globalisation critics is that a global economy shifts economic power away from ____________ towards __________.

A)the proletariat;the bourgeoisie
B)national governments;supranational organisations
C)the West;the East
D)the East;the West

Question 45

The Chinese Company HiSense has been able to be successful internationally through:

A)earning more than 50 per cent of their total revenue internationally.
B)utilising the main drivers of growth in the rapidly developing economies around the world.
C)falling regulatory and administrative barriers to doing business internationally.
D)establishing subsidiaries (manufacturing bases)around the worlD.

Question 46

Any firm that engages in international trade or investment is referred to as:

A)a multinational.
B)a franchise.
C)a conglomerate.
D)an international business.

Question 47

To ____________s the minimum that a firm has to do to engage in international business.

A)export or import
B)invest directly in operations in another country
C)establish joint ventures or strategic alliances with companies in other countries
D)licence products to companies in other countries

Question 48

Managing an international business is different from managing a purely domestic business for all of the following reasons,except:

A)countries are different.
B)international transactions involve converting money into different currencies.
C)the range of problems confronted by a manager in an international business is narrower than those confronted by a manager in a domestic business.
D)an international business must find ways to work within the limits imposed by government intervention in the international trade and investment system.

Question 49

In keeping with the normative prescriptions of liberal economic ideology,in country after country we have seen state-owned businesses privatised,widespread deregulation adopted,markets opened to more competition,and commitment increased to removing barriers to cross-border trade and investment.All of this helps to:

A)achieve economic dominance over the rest of the world.
B)ensure authoritarian governments shift in emphasis towards more democratic controls.
C)facilitate a move towards the establishment of a more global economic system.
D)predict shifts (along with their attendant risks)in the economic,political,social,technological and environmental structures of the worlD.

Question 50

Which of the following is NOT a reason why some of the world's poorest countries have suffered from economic stagnation?

A)democratic governments
B)economic policies that destroy rather than facilitate the creation of wealth
C)weak protection for property rights
D)war