Deck 11: Globalization and Financialization

Question 1

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

Answer 1

True

Question 2

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.

Answer 2

True

Question 3

Expanding multinational corporations undermine national labor unions and government regulations.

Answer 3

True

Question 4

Globalization occurs when there is increased economic integration among countries.

Question 5

Increased globalization and financialization of world markets has created greater appreciation for country's unique differences and has allowed for greater preservation of unique social and political systems, cultures, standards, and ways of life.

Question 6

Increased capital mobility means there is less need to move jobs internationally.

Question 7

Globalization opens up greater financial opportunities for companies while also adding foreign competition that could potentially reduce financial returns.

Question 8

Globalization and financialization, while interdependent, have different consequences for the distribution of power, income, wealth, and economic growth internationally.

Question 9

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

Question 10

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

Question 11

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

Question 12

Financialization is a phenomenon that can largely be explained by banking regulations, corporate governance rules, and private equity rules.

Question 13

Financialization can be defined as the increased reliance upon financial markets, motives, results, and institutions, rather than on sales of goods and services, to generate profits.

Question 14

Financialization increases global integration of business which in turn creates pressure to generate the highest financial returns possible through further free trade agreements and globalization of markets.

Question 15

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

Question 16

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

Question 17

Globalization and financialization are both increasing but relatively independent trends in the world economy.

Question 18

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 19

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 20

Globalization and financialization are both increasing but relatively independent trends in the world economy.

Question 21

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

Question 22

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 23

The WTO provides a forum for negotiating and enforcing global trade agreements between participating countries.

Question 24

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 25

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 26

Fair trade and free trade are basically the same concepts.

Question 27

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

Question 28

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

Question 29

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

Question 30

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 31

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 32

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

Question 33

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

Question 34

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

Question 35

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 36

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

Question 37

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

Question 38

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

Question 39

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 40

For signatory countries to the WTO, quotas limiting imports are considered a trade barrier and therefore should be minimized or eliminated.

Question 41

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 42

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 43

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

Question 44

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

Question 45

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

Question 46

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 47

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

Question 48

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

Question 49

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

Question 50

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

Question 51

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

Question 52

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 53

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 54

A key factor in Britain's vote to leave the EU was concern over the difficulty of limiting migration into Britain due to the EU's open border policies.

Question 55

While initially creating a rift between American and Mexican labor, NAFTA caused a shift in the attitudes of U.S. and Canadian labor movements which now view Mexican workers as partners in the struggle for improved worker rights.

Question 56

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

Question 57

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

Question 58

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

Question 59

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 60

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 61

The shareholder value model has reduced corporate reinvestment of cost savings and earnings back into the business and increased corporate repurchasing of company stock to increase share prices.

Question 62

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 63

As markets have become more financialized, there has been a declining trend toward companies becoming involved with financial activities such as lending to its consumers.

Question 64

Corporate codes of conduct were initially adopted by companies that were looking to counter bad publicity and damage to their brands after being "caught" in some highly publicized labor abuse scandals.

Question 65

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

A) Goods and services
B) Investment securities
C) People
D) Jobs

Question 66

An important aspect of financialization is the use of private equity funds to invest in infrastructure, labor, and product quality improvements of underperforming companies.

Question 67

Financialization is the increased importance of financial markets, motives, results, and institutions relative to:

A) the production and delivery of goods and services
B) the development of global markets
C) international trade
D) labor and the environment

Question 68

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 69

Globalization and financialization are facilitated by:

A) International Labor Standards
B) corporate codes of conduct and the labor movement
C) tariffs and quotas
D) free-market public policies and advances in information technology

Question 70

Corporate codes of conduct have proven to be highly effective in stopping labor exploitation and environment abuse by large, multinational corporations.

Question 71

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 72

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 73

The shareholder value model as increased corporate accountability to labor, customers, and communities.

Question 74

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
D) Reduced monopoly power of domestic companies

Question 75

Expanding multinational corporations:

A) empower nationally focused labor unions
B) encourage nationally focused government regulations
C) increase demand for new skills and knowledge for managers
D) decrease job mobility

Question 76

Public sector budget austerity is considered another aspect of financialization of markets due to the increased influence of financial institutions on public sector financial and nonfinancial decisions.

Question 77

Financialization has elevated the role of financial institutions as influential players in corporate governance and governmental sovereignty.

Question 78

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 79

The coordination dimension of global strategy refers to a multinational company's decision to standardize its practices across location, .

Question 80

College student activism has been largely ineffective in pushing companies toward adopting corporate codes of conduct.