Deck 11: Globalization

Question 1

International investment portfolios create cross-border flows of investment securities like stocks and bonds.

Answer 1

True

Question 2

Removing trade barriers that were protecting an inefficient industry is likely to cause job losses in that industry.

Answer 2

True

Question 3

One of the key benefits of international trade is that it allows consumers and producers to benefit by exploiting each country's comparative advantage.

Answer 3

True

Question 4

The ability to outsource is a key disadvantage of international trade for companies looking to reduce costs.

Question 5

When looking to international financial investments,investors are more likely to think long term,making international markets more stable than a national market.

Question 6

While globalization has increased the exportation of unskilled jobs from the U.S.to low-wage countries,white collar jobs are rarely outsourced abroad.

Question 7

To avoid social dumping,the U.S.and Europe are forcing other countries to adopt principles of fair trade.

Question 8

U.S.trade policy has tended to focus on reducing tariffs and other barriers to trade.

Question 9

The phrase,"The world is flat," refers to the idea that information technology gives people from all corners of the world the opportunity and ability to compete in a global economy.

Question 10

There are few benefits of immigration to the receiving country while there are many benefits to the immigrants' home country.

Question 11

Because immigration is tightly controlled,the vast majority of immigrants to the U.S.are skilled workers.

Question 12

Social dumping occurs when a foreign competitor is able to unfairly sell goods or services at a lower price than domestic producers because they are able to be more efficient.

Question 13

One of the advantages to free trade is that the benefits of trade flow are shared equally between labor and management.

Question 14

Globalization occurs when there is increased economic integration among countries.

Question 15

Relying on corporate codes of conduct to establish fair labor standards in an international market is a lot like relying on human resource policies to establish fair labor standards in a domestic market.

Question 16

If global markets are imperfect,a disproportionate share of profits is likely to end up with shareholders,rather than employees.

Question 17

The cross-border flow of goods and services is called international trade.

Question 18

Foreign direct investment can result in exploitation of labor,particularly in export processing zones.

Question 19

Bantani Corporation,a large manufacturer of food packaging products,decides to purchase an existing manufacturing plant in India.This is an example of foreign direct investment.

Question 20

Globalization increases the demand for unskilled labor in the U.S.which in turn reduces labor's bargaining power.

Question 21

The GATT was an international agreement among countries to reduce tariffs on all products traded between them.

Question 22

NAFTA is a free trade agreement between Canada,Mexico,and the U.S.that allows both free capital and labor mobility.

Question 23

The North American Free Trade Agreement includes a common monetary and fiscal policy between member nations.

Question 24

For signatory countries to the WTO,quotas limiting imports are illegal.

Question 25

As a result of the GATT,average U.S.tariff rates have fallen from 50% in 1930 to less than 4% today.

Question 26

The World Bank requires companies to abide by the ILO's Declaration on Fundamental Principles and Rights at Work as a condition of borrowing money.

Question 27

When a country agrees to extend the same tariff terms to a particular set of countries so as to provide equal market access,they are said to be giving most favored nation status.

Question 28

Labor standards established by the ILO's Declaration of Fundamental Principles and Rights at Work are legally enforceable.

Question 29

The North American Agreement on Labor Cooperation specifies minimum standards for the treatment of labor by all NAFTA countries and outlines penalties for failure to comply with those standards.

Question 30

Currently,all global trade agreements sanctioned by the WTO have a social clause requiring them to abide by the ILO's Declaration on Fundamental Principles and Rights at Work.

Question 31

The ILO is a specialized agency of the U.S.Department of Labor focused on social justice and human rights.

Question 32

The WTO is a specialized agency for the United Nations focused on the promotion of social justice and internationally-recognized human and labor rights.

Question 33

Fair trade and free trade are basically the same concepts.

Question 34

Compared to other economic integration agreements,like NAFTA,one can say that the European Union has the greatest degree of integration.

Question 35

The North American Agreement on Labor Cooperation was created primarily to prevent social dumping by U.S.companies operating in Mexico.

Question 36

Fair trade incorporates labor,environmental,public health,and other standards into trade agreements.Free trade advocates none of these.

Question 37

If a signatory country to the WTO wants to pass a law to establish higher product standards for a particular import,it must be able to produce scientific evidence supporting the need for these standards.

Question 38

While labor and environmental activists advocate for stronger protective regulations on trade,others argue that these are just a way to create unnecessary trade barriers and put poorer countries at a disadvantage.

Question 39

Developing countries are most likely to see labor standards as a way to protect U.S.jobs,rather than a good faith effort to improve the lives of working people worldwide.

Question 40

The ILO's Declaration on Fundamental Principles and Rights at Work establishes a set of core labor standards that includes the freedom to bargaining collectively at work.

Question 41

A European Works Council is a transnational,company-level committee of employees that gives workers the opportunity to learn about their company's financial health and future plans,and to have a voice in providing feedback and ideas about these plans.

Question 42

The NAFTA Labor side agreement calls for compliance and effective enforcement of the labor laws within each member country.

Question 43

The Social Charter is a legally binding agreement between European Union countries outlining desired standards of treatment of people,including workers.

Question 44

In response to pressure from organizations such as the ILO and the International Trade Union Confederation,most companies today have a corporate code of conduct

Question 45

In a multinational corporation,if formal labor relations processes and structures are centralized,local managers should build networks across the entire organization to facilitate coordination and training.

Question 46

The agreement between countries that created the European Union provides trade agreements similar to those that exist between NAFTA nations..

Question 47

Just as it facilitates corporate international trade,free trade agreements like the WTO and NAFTA also encourage internationalization efforts of labor unions.

Question 48

The coordination dimension of global strategy refers to a multinational company's decision to standardize its practices across location,(e.g. ,similar compensation,staffing,and training practices)

Question 49

One response of the labor movement to increased globalization and the growth of multinational corporations is to explore different methods of transnational collaboration.

Question 50

Unlike the free trade arrangements of the WTO and NAFTA,workers in any European Union country can freely cross member nation's borders to work.

Question 51

A written pledge or statement by an employer outlining standards that it will abide by in conducting business is known as a corporate code of conduct.

Question 52

(p 400)The NAALC has helped to increase the public's awareness of potentially harmful trade and labor practices within member nations.

Question 53

The European Commission consists of representatives from members of the European Union and is responsible for drafting legislation on issues of common interest to all countries.

Question 54

One initiative of the International Trade Union Confederation is to pressure companies to adopt corporate codes of conduct that include a statement on the fair treatment of labor.

Question 55

The International Trade Union Confederation is an attempt to bring national union federations of many countries under the same organization.

Question 56

Configuration refers to one aspect of a multinational company's global strategy whereby all of its processes are either consolidated in one location or located across several countries.

Question 57

Which of the following cannot be attributed to the effects of globalization?

A)Increased demand for new skills and knowledge of managers
B)Decreased international job mobility
C)Downward pressure on labor standards and unionization
D)Pressure to lower government regulations

Question 58

The North American Agreement on Labor Cooperation is administered by the National Labor Relations Board which investigates complaints of violations of labor standards.

Question 59

The North American Agreement on Labor Cooperation has been highly effective in improving labor standards among NAFTA nations.

Question 60

The primary objective of European unification has been to create a thriving economy in response to increased competition from Asia over the past 30 years.

Question 61

(p 391)Bemish Corp.decides to diversify its portfolio by buying stocks of Indian and Chinese companies.This is an example of:

A)Direct foreign investment.
B)International trade agreements.
C)International investment portfolio.
D)Defensive portfolio investment

Question 62

International trade can be defined as the cross-border flow of:

A)Goods and services
B)Investment securities
C)People
D)All of the above

Question 63

U.S.trade policy focuses on ____________________.

A)capital mobility across countries
B)labor mobility across countries
C)tariff reductions
D)all of the above

Question 64

International investment portfolios can increase volatility in foreign exchange markets because:

A)They can be highly speculative and short-term focused.
B)They are too focused on long-term return rates.
C)There are too many investors in the market.
D)The markets lack competition and creates inefficiencies that result in rate fluctuations.

Question 65

Removing trade barriers that were protecting an inefficient industry will likely cause ____________________ in that industry.

A)lawsuits
B)transnational collective bargaining
C)management shifts
D)job losses

Question 66

The World Trade Organization:

A)Was created to establish labor standards for all countries participating in the General Agreement on Tariffs and Trade
B)Was created to isolate trade power in the hands of the major industrialized countries of the world
C)Was created to raise tariffs and discourage trade between foreign countries
D)Was created to administer the General Agreement on Tariffs and Trade provisions and to handle future trade negotiations

Question 67

Foreign direct investment is vulnerable to criticism because:

A)It can be used to exploit workers with no alternatives and degrade the environment when there are no protections or incentives
B)It can result in job loss for domestic workers
C)It does not encourage development of countries by bringing in jobs and new technology
D)A and b
E)All of the above

Question 68

The European Union includes ____________________.

A)Capital mobility across member countries
B)Labor mobility across member countries
C)A common currency
D)All of the above

Question 69

International investment portfolios can be beneficial because:

A)They provide working capital for local companies and financing for foreign government operations.
B)They keep uninformed investors out of the market so only those "in the know" can make wise investment decisions.
C)They concentrate risk so not all countries are likely to be affected by economic downturns.
D)International financial transactions are more predictable.

Question 70

U.S.labor's biggest fear of foreign direct investment is:

A)Loss of capital investment in the U.S.
B)Increased national debt owed to foreign countries
C)Loss of jobs and downward pressure on wages.
D)All of the above.

Question 71

According to free market economic models,free trade across countries encourages all of the following except:

A)More efficient utilization of scarce resources
B)Increased size of product markets
C)Generalist countries (i.e. ,countries that can produce some of everything)
D)Reduced monopoly power of domestic companies

Question 72

Which of the following is not considered an advantage of immigration?

A)It provides a way for people to seek asylum and create a better life for themselves
B)It generates exchange of ideas and innovation
C)It provides a source of low-skilled labor that may be willing to work in undesirable jobs
D)It results in overall wage increases because there are more job applicants and employers are able to choose the "cream of the crop"

Question 73

An export processing zone is:

A)A place where exports are inspected and packaged for shipping out of the country.
B)A special area within a developing country that is dedicated to attracting and supporting multinational investment.
C)A place where exports are inspected once they arrive in the receiving country.
D)A place where labor and employment standards are regulated to ensure a fair export-import trade.

Question 74

Cross-border flows of corporate investments such as purchasing or establishing foreign subsidiaries and joint ventures is called

A)International trade
B)Foreign direct investment
C)International investment
D)Indirect foreign investment

Question 75

The United States has negotiated a free trade agreement with:

A)Canada and Mexico
B)Japan
C)Europe
D)All of the above

Question 76

Which of the following cannot be considered a nontariff trade barrier?

A)Taxes on imports
B)Quotas
C)Domestic subsidies
D)Import licensing and product standards manipulated to favor domestic companies

Question 77

The ____________________ principle states that domestic and foreign products must be treated equally.

A)no quota
B)most-favored nation
C)national treatment
D)fair trade

Question 78

Compliance with corporate codes of conduct to establish labor standards in the global arena is generally a function of:

A)The enforcement powers of the WTO
B)Corporate self interest and good will
C)International labor laws
D)Domestic labor laws

Question 79

Because U.S.laws tightly regulate the disposal of toxic materials from the thousands of electronic devices discarded each year,some companies have contracted with companies in China and other countries to dispose of these products.Unfortunately,the lack of regulation in these countries has resulted in unsafe disposal practices,creating toxic waste areas where drinking water and soil are no longer safe.This situation illustrates the concept of:

A)Comparative advantage
B)Social dumping
C)International degradation
D)Competitive advantage

Question 80

When a foreign competitor is able to unfairly sell a product at a lower price because it receives subsidies from the host government or exploits,lower labor or lower environmental standards,it is called:

A)Free market competition
B)Competitive advantage
C)Enterprise unionism
D)Social dumping