Chapter 1 Exam Review

Flashcard maker : Lily Taylor
Since the collapse of communism at the end of the 1980s, the erstwhile communist nations have transformed their economies by globalizing their markets. This involves
privatizing state-owned enterprises
Which of the following is a consequence of globalization?
Increasing outsourcing of services
Which of the following has enabled globalization of markets?
Falling barriers to cross border trade
Which of the following factors hinders globalization of consumer goods market?
National differences in tastes and preferences
Globalization of markets results in markets becoming _____.
less diverse
A U.S. Investment firm, Fin-Smart, set up a customer service call center in India to take advantage of the lower labor costs. This is called _____.
outsourcing
Early outsourcing efforts were primarily confined to _____.
manufacturing activities
Which of the following is NOT an impediment that makes it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe?
Government regulations
The General Agreement on Tariffs and Trade (GATT) was responsible for _____.
policing the global marketplace
The ______ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states.
World Trade Organization
The World Trade Organization promotes _____.
lowering of barriers to cross-border trade and investment
Which of the following is true about the International Monetary Fund?
It is seen as the lender of last resort to nation-states whose economies are in turmoil.
The _____ was established on October 24, 1945, by 51 countries committed to preserving peace through international cooperation and collective security.
United Nations
_____ occurs when a firm exports goods or services to consumers in another country.
International trade
Which of the following is NOT a consequence of the reduction in trade barriers and restrictions on FDI since 1950?
Nations are becoming more independent of each other for important goods and services.
The relative decline of the United States in the share of world output and world exports reflects _____.
the growth in the economic development of the world economy
Throughout the 1990s, the amount of foreign direct investment directed at both developed and developing nations increased dramatically. This trend reflects:
the increasing internationalization of business corporations.
Which of the following countries has been the largest recipient of foreign direct investment and received about $60 billion to $100 billion a year in inflows in 2004-2009?
China
A multinational enterprise (MNE) is a firm that _____.
has production units in more than two countries
Which of these statements pertaining to cross-border FDI flows is true?
There was a growth of FDI between 2004 and 2007.
In the last two decades, Latin American countries like Brazil, Mexico, and Chile have _____.
welcomed foreign investment
Which of the following is a risk associated with globalization?
Global financial contagion
Supporters of globalization maintain that the apparent decline in real wage rates of unskilled workers:
is due to technological changes that create greater demand for skilled workers.
Globalization is criticized because it increases the power of _____.
supranational organizations over nation-states
An international business, unlike a multinational enterprise, _____.
need not invest directly in operations in other countries
Which of the following statements is true about an international business?
An international business must find ways to work within the limits imposed by government intervention.
A number of econometric studies have found consistent evidence of a hump-shaped relationship between income levels and pollution levels. According to this, as an economy grows and income levels rise:
after a while the pollution levels decrease

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