Deck 22: Globalization

Question 1

The ebb and flow of globalization since 1900 has been governed mainly by __________ factors.

A) economic
B) political
C) social
D) technological

Answer 1

B

Question 2

Which of the following technologies is recognized as the primary engine behind the communications revolution of the nineteenth century?

A) the telephone
B) the telegraph
C) radio
D) trans-Atlantic mail

Answer 2

B

Question 3

Which of the following features of the capitalist system distinguishes it from other systems?

A) rising prices
B) market independence
C) market dependence
D) expanding transportation infrastructure

Answer 3

C

Question 4

As more of what is produced across the world comes from international investment as opposed to investment by local firms, we say that __________.

A) domestic production is becoming more aggregated
B) domestic production is becoming more integrated
C) international production is becoming more aggregated
D) international production is becoming more integrated

Question 5

Before __________, economic production and consumption had to be largely local.

A) price convergence
B) the spread of international trade
C) foreign investment
D) the advent of the railway

Question 6

In the nineteenth century, which group represented a reliable source of demand?

A) politicians
B) farmers
C) city residents
D) new immigrants

Question 7

Since the 1970s, governments across the world have enacted which type of economic policy?

A) industry-protective policies
B) labor-supportive policies
C) market-based policies
D) risk-averse policies

Question 8

After the Great Depression, what was the most important factor that worked against the resumption of globalized economic integration?

A) continued instability in Europe
B) devalued American currency
C) the power of the state
D) the spread of communism

Question 9

When firms from one country make investments in another, it is known as __________.

A) direct foreign investment (DFI)
B) direct licensing (DL)
C) foreign direct investment (FDI)
D) investment transfer authorization (ITA)

Question 10

Which two modes of transportation around the middle of the nineteenth century were considered revolutionary?

A) steamship and automobiles
B) steamship and railway
C) railway and roads
D) railway and subway

Question 11

Consider the course of globalization from the nineteenth century to today. After a period of increasing globalization that began in the nineteenth century, when did the process of deglobalization start?

A) after World War I
B) during the Great Depression
C) at the start of World War II
D) after World War II

Question 12

When a government makes it harder for an investor who, seeking diversification, wishes to move money offshore, it is exercising __________.

A) capital accumulation
B) capital control
C) currency devaluation
D) currency exchange

Question 13

Which two instruments of economic policy helped states gain more control over the flow of economic activity in the period of deglobalization that followed the Great Depression?

A) capital controls and currency devaluation
B) currency devaluation and import quotas
C) tariffs and capital controls
D) tariffs and capital investments

Question 14

A tariff __________ the price of goods.

A) raises
B) lowers
C) destabilizes
D) equalizes

Question 15

__________ is a commonly used measure of global economic integration.

A) Volume of trade
B) Gross domestic product (GDP)
C) Trade as a proportion of gross domestic product (GDP)
D) Gross domestic product (GDP) as a proportion of trade

Question 16

An economic system in which the market for produced goods is limited is said to be __________.

A) antecapitalist
B) metacapitalist
C) precapitalist
D) protocapitalist

Question 17

Prior to the rise of capitalism, what was the traditional means of survival among peasants?

A) selling produced goods at local markets
B) working for wages in rural communities
C) working their own land with their own labor
D) leasing their own land for agricultural production

Question 18

Between 1820 and 1914, more than __________ miles of railroad were laid in the United States.

A) 250,000
B) 350,000
C) 450,000
D) 550,000

Question 19

What two things had to occur before globalization could really take off in the nineteenth century?

A) a change in transportation and communication
B) a change in infrastructure and a transformation of economic systems
C) an increase in the pool of labor and rising levels of education
D) accumulated capital and price stability

Question 20

Gross domestic product (GDP) is equal to the value of __________.

A) the consumer price index
B) all exports sold regionally within a defined period
C) all imports sold domestically within a defined period
D) all goods and services sold within a defined period

Question 21

Capital-intensive industry involves a lot of what?

A) high-technology machinery
B) outsourcing
C) value chains
D) manual labor

Question 22

In the production of clothing, which step is considered more capital intensive than the others?

A) spinning of thread
B) weaving of fabric
C) final assembly of clothing
D) selling of clothing

Question 23

The state-led development model employed in the developing world in the middle decades of the twentieth century in Latin America, Asia, the Middle East, and Africa has a technical name. What is it?

A) imperfect competitive industrialization (ICI)
B) import-substituting industrialization (ISI)
C) income-stabilizing industrialization (ISI)
D) invisible trade industrialization (ITI)

Question 24

Evidence suggests that globalization is promoting __________.

A) a flattening out of the world as a whole
B) densely woven ties between all corners of the world
C) interchangeable migration corridors
D) regional economic blocs

Question 25

What do global value chains organize?

A) consumption
B) government expenditures
C) investment
D) production

Question 26

What evidence supports the conclusion that economic integration clusters around small regions?

A) that average distance that imports and exports travel rises as economic integration increases
B) that average distance that imports and exports travel falls as economic integration increases
C) that average distance that imports and exports travel stays relatively even as economic integration increases
D) that average distance that imports and exports travel rises and falls in tandem with the business cycle

Question 27

Where does most of the trading and investment activity of TNCs take place?

A) in neighboring or nearby countries
B) in far-flung regions of the world
C) within their home countries
D) in the European Union, North America, and Japan

Question 28

In the era of deglobalization, __________ was uncommon.

A) insourcing
B) downsizing
C) outsourcing
D) rightsizing

Question 29

The trade intensity index is the ratio of __________.

A) intraregional trade share relative to global trade
B) intraregional trade share relative to the region's share in global trade
C) interregional trade share relative to global trade
D) one TNC's share of intraregional trade relative to another TNC's share

Question 30

Labor-intensive garment industry assembly operators are __________.

A) less likely to locate in the United States than in the Caribbean
B) more likely to locate in the United States than in Mexico
C) less likely to locate in export processing zones than inner cities
D) more likely to avoid high wages associated with export processing zones than are other types of manufacturers

Question 31

Which of the following statements about global investment is true?

A) Factories and firms are as footloose as popular images of globalization would have us believe.
B) Since 2000, more than 80 percent of global investment is carried out outside national borders.
C) Since the 1990s, global investment has been in the range of 10 to 20 percent.
D) Since the 1970s, global investment has risen steadily in all parts of the world except North America.

Question 32

Costa Rican textile producers who successfully push American textile products out of local Costa Rican markets have, in economic terms, accomplished what?

A) import stabilization
B) import substitution
C) market-friendly globalization
D) trade liberalization

Question 33

What are export processing zones famous for?

A) high wages for laborers and tax breaks for TNCs
B) low wages for laborers and tax breaks for TNCs
C) high wages for laborers and tax breaks and other special privileges for TNCs
D) low wages and tax breaks for laborers

Question 34

As developing countries try to industrialize, what competitive disadvantage do they face?

A) pressures to sell imported goods across regional markets already being produced by more experienced firms from richer countries
B) producing for underserved markets not yet targeted by more experienced firms from richer countries
C) producing for markets that are already being served by more experienced firms from richer countries
D) restrictions on imported goods already being produced by more experienced firms from richer countries

Question 35

Under the North American Free Trade Agreement (NAFTA), where did nearly all of the growth in employment in Mexico occur?

A) in rapidly industrializing agricultural regions south of the Mexican capital
B) in the maquiladoras
C) in locally owned assembly facilities
D) in the rural-suburban fringes of Mexico City

Question 36

TNCs often set up production facilities in export processing zones for which of the following reasons?

A) cheaper labor and fewer worker protections
B) fewer worker protections and better managerial capabilities
C) better managerial capabilities and better labor-management relations
D) better labor-management relations and simpler employment contracts

Question 37

Where are the top migration corridors located?

A) between neighboring countries
B) between neighboring continents
C) between countries that line the Pacific Ocean
D) between undeveloped countries

Question 38

What kind of labor force does China offer TNCs?

A) a small but willing labor force
B) a large, willing, low-cost labor force
C) a large, low-cost, but relatively inflexible labor force
D) a large, willing, but relatively high-wage labor force

Question 39

Which of the following steps in the global value chain is a worker in China more likely to perform?

A) assembling components
B) designing components
C) producing components
D) post-sale servicing of components

Question 40

Steps in global value chains typically take place __________.

A) under one roof
B) in one country
C) in different locations across the globe
D) in different locations within neighboring regions

Question 41

Explain the relationship of outsourcing to global value chains.

Question 42

Based on your knowledge of regionalization in comparison with globalization, which of the following scenarios best reflects the true picture of international trade and investment?

A) a U.K. company has 50 percent of its sales in the United Kingdom, 25 percent in Germany, and 25 percent in France
B) a Latin American firm has 65 percent of its sales in Canada, 25 percent in the United States, and 10 percent in Latin America
C) a Mexican corporation has 45 percent of its sales in South America, 35 percent in Canada, and 20 percent in the United States
D) a U.S. company has 60 percent of its sales in Asia, 30 percent in Mexico, and 10 percent in the United States

Question 43

What has happened to most low- to middle-income countries with the turn away from decades of state-led development and regulated markets toward globalization?

A) They have been able to sustain robust pre-1980 growth rates.
B) They have seen their growth, productivity, and investment stagnate.
C) They have seen the gap between wealthy and poor countries narrow.
D) They have seen growing parity with Northern industrialized countries.

Question 44

Santiago, a Guatemalan entrepreneur, has started his own local paper-manufacturing company but fears that he won't be able to compete with international paper mills that already sell to Guatemalan businesses. To assist Santiago, the Guatemalan government has imposed tariffs on imported paper and extended his credit to enable the purchase of up-to-date equipment. This scenario exemplifies __________.

A) capital controls
B) foreign direct investment
C) import-substituting industrialization
D) the Washington Consensus

Question 45

Which of the following scenarios most accurately portrays the role of global value chains in globalization?

A) Companies are increasingly laying off employees and shutting down altogether, forcing many workers to look for jobs overseas.
B) Corporations are setting up different phases of production and assembly in two or three other countries, which creates a global link.
C) Governmental and political incentives to produce goods domestically are driving companies to make products locally and sell them to a wider variety of countries.
D) New immigrants are increasingly working their way into local corporations, which establishes new global connections for companies.

Question 46

Which of the following statements most accurately reflects and explains the true picture of the current degree of globalization?

A) Contrary to popular belief, globalization has sharply decreased, due largely to increasing fear of dependency on other countries.
B) Globalization has barely risen since the early 1900s, due in part to colonization creating vast trade markets with integration levels so high that they have been difficult to top.
C) National pride and the economic crisis have led to a decrease in globalization.
D) Virtually every developed nation today is more extensively involved in international trade and investment than ever before, due to increased worldwide demands for foreign investments and foreign-made products.

Question 47

Which of the following outcomes has been attributed to the North American Free Trade Agreement (NAFTA)?

A) the creation of hundreds of new manufacturing plants in the United States and Mexico and an economic upturn in both countries
B) a limited increase in cross-border trade, slight increase in agricultural jobs in Mexico, and an economic boost for Mexico
C) a significant improvement in factory conditions for Mexican laborers, the loss of agricultural jobs in the United States, and a decrease in number of unauthorized Mexican immigrants in the United States
D) a substantial increase in cross-border trade, an increase in job and income inequalities, the loss of agricultural jobs in Mexico, and gains for large U.S. agricultural companies

Question 48

What derailed the process of globalization in the early twentieth century and why was the period of deglobalization that followed so enduring?

Question 49

What is China's position in the global value chain and what are Chinese export processing zones like?

Question 50

Which of the following statements about the multiple facets of globalization is true?

A) Globalization is driven and governed by economic forces, it has been extensive, and it has produced stronger economies.
B) Globalization is driven and governed by political forces. It has not been as extensive as it seems nor has it produced stronger economies.
C) Globalization is the natural result of higher educational levels and decreasing poverty levels. It has been fueled by industrialists and entrepreneurs.
D) Globalization has been spurred on by industrialization. It has created a new world order where virtually all countries, regardless of geographical location, are interconnected economically.

Question 51

In what ways has globalization affected the economic and social condition of developing countries?

A) Under globalization, there have been no notable changes in the economic, political, or social conditions among low-income countries but diplomatic relations between low- and high-income countries have improved.
B) Under globalization, political and economic stability prevails and emigration and immigration rates have slightly increased.
C) Under globalization, economic growth has fallen and global inequality has increased.
D) Under globalization, low-income countries have experienced an upturn in economic growth and improved diplomatic relations between low- and high-income countries.

Question 52

What have been the consequences of the North American Free Trade Agreement (NAFTA) and why are they tricky to assess?

Question 53

What impacts has China and its citizens experienced from the explosive emergence of its export processing zones?

A) economic growth for the country, middle- to high-skill employment opportunities for young rural people, and arduous factory conditions
B) incredible economic growth for the country, low-skill employment opportunities for young rural people, and arduous factory conditions
C) massive political shifts in the country, low- to high-skill employment opportunities for young urban people, and vast improvements in factory conditions
D) political unrest and riots protesting unfair factory conditions, formation of unions to protect the factory workers, and low-skill employment opportunities for young urban people