question

Definition: Trend away from distinct national economic units and toward one huge global market; the shift toward a more integrated and interdependent world economy.

answer

globalization

question

Since the collapse of _____________ at the end of the 1980s, public policy in many nations has swung toward the free market end of the economic spectrum.

answer

communism

question

Thomas Friedman argues that the world is becoming ___________ through globalization.

answer

flat

question

Definition: The merging of historically distinct and separate national markets into one huge global marketplace.

answer

globalization of markets

question

In the US, ____% of firms that export are small businesses employing less than 100 people, and their share of US exports has grown to ____%.

answer

90, 20

question

True/False: Because of globalization, there are no longer many significant differences among national markets.

answer

false

question

Most global markets are not markets for consumer products, but for ___________ ___________ ____ ___________.

answer

industrial goods and materials

question

True/False: As firms follow each other around the world, they bring greater uniformity to replace diversity.

answer

true

question

Definition: 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.

answer

globalization of production

question

____________ _____ ____________ include labor, energy, land, and capital.

answer

factors of production

question

Definition: International treaty that committed signatories to lowering barriers to the free flow of goods across national borders.

answer

GATT

question

What does GATT stand for?

answer

General Agreement on Tariffs and Trade

question

Definition: Organization that succeeded GATT as a result of the successful completion of the Uruguay Round of GATT negotiations.

answer

WTO

question

What does WTO stand for?

answer

World Trade Organization

question

As of 2010, WTO had ______ nation members that accounted for ______% of world trade.

answer

154, 97

question

The WTO has promoted the lowering of _________ to cross-border trade and investment.

answer

barriers

question

The ___________ ____________ ___________ and ___________ __________ were created in 1944 by 44 nations that met in New Hampshire.

answer

International Monetary Fund, World Bank

question

Definition: International institution set up to maintain order in the international monetary system.

answer

IMF

question

Definition: International institution set up to promote general economic development in the world's poorer nations.

answer

World Bank

question

In return for loans, the IMF requires nation-states to adopt specific ___________ ___________ aimed at returning their economies to stability and growth.

answer

economic policies

question

The IMF is the lender of _________ _________ to nation-states whose economies are in turmoil.

answer

last resort

question

Definition: An international organization made up of 191 countries and headquartered in New York City, formed in 1945 to promote peace, security, and cooperation.

answer

United Nations

question

According to the UN charter, the organization has 4 main purposes: (1) to maintain international __________ ____ _________; (2) to develop __________ relations among nations; (3) to cooperate in solving __________ problems and in promoting respect for __________ _________; and (4) to be a center for harmonizing the ___________ of nations.

answer

peace and security, friendly, international, human rights, actions

question

____% of the UN's work is devoted to accomplishing higher standards of living, full employment, and conditions of economic and social progress.

answer

70

question

Definition: Comprises the finance ministers and central bank governors of the 19 largest economies in the world, plus representatives from the European Union and the European Central Bank.

answer

G20

question

In ______ and ______, G20 became the forum through which major nations attempted to launch a coordinated policy response to the global financial crisis.

answer

2008, 2009

question

Two macro factors underlie the trend toward greater globalizations: (1) the decline in _________ to the free flow of goods, services, and capital; and (2) _________ change, particularly in communication, information processing, and transportation.

answer

barriers, technological

question

___________ ___________ occurs when a firm exports goods or services to consumers in another country.

answer

international trade

question

__________ ___________ ___________ occurs when a firm invests resources in business activities outside its home country.

answer

foreign direct investment

question

During the 1920s and 1930s, many nation-states began erecting barriers, particularly trade tariffs, to international trade and foreign direct investment. This activity depressed world demand and contributed to the ___________ ____________.

answer

Great Depression

question

Under the umbrella of GATT, ____ rounds of negotiations among member states have worked to lower barriers to the free flow of goods and services.

answer

8

question

The most recent round of GATT negotiations, called the ____________ Round, was finalized in December 1993.

answer

Uruguay

question

The Uruguay Round (1) ___________ trade barriers; extended GATT to cover ___________; (2) provided enhanced protection for ___________, ___________, and ___________; and (3) established the _______ to police the international trading system.

answer

reduced, services, patents, trademarks, copyrights, WTO

question

In late 2001, the WTO launched a new round of talks in Doha, with the agenda of (1) cutting tariffs on ___________ goods, services, and ____________ products; (2) phasing out ___________ to agricultural producers; (3) reducing barriers to ___________-products; and (4) limiting the use of ___________ laws.

answer

industrial, agricultural, subsidies, cross, antidumping

question

True/False: The world's richer nations have the most to gain from any reduction in agricultural tariffs and subsidies.

answer

false

question

According to WTO data, the volume of ___________ ___________ ___________ has grown faster than the world economy since 1950, and has expanded faster than the rate of world production.

answer

world merchandise trade

question

True/False: Since the mid-1980s, the value of international trade in services has not grown nearly as much as world merchandise trade or world production.

answer

true

question

In general, over the past 30 years, the flow of ______ has accelerated faster than the growth in world trade and world output.

answer

FDI

question

The lowering of ___________ ___________ made globalization of markets and production a theoretical possibility. ____________ ___________ has made it a tangible reality.

answer

trade barriers, technological change

question

Development of the _____________ has enabled the explosive growth of high-power, low-cost computing, vastly increasing the amount of information that can be processed by individuals and firms.

answer

microprocessor

question

Definition: Predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18 months.

answer

Moore's Law

question

______________ has revolutionized the transportation business, significantly lowering the costs of shipping goods over long distances.

answer

containerization

question

Until the 1960s, four facts described the demographics of the global economy: (1) US ___________ in the world economy and world trade picture; (2) US dominance in world ___________ ___________ _____________; (3) the dominance of large, multinational US firms on the ___________ ___________ scene; and (4) roughly ___________ of the globe was off-limits to Western international businesses.

answer

dominance, foreign direct investment, international business, half

question

By 2008, the US accounted for ______% of the world GDP, still the world's largest industrial power, but still significantly down in relative size since the 1960s.

answer

20.7

question

True/False: Most forecasts now predict a rapid rise in the share of world output accounted for by developing nations and a commensurate decline in the share enjoyed by rich industrialized countries.

answer

true

question

Definition: The total cumulative value of foreign investments.

answer

stock of foreign direct investment

question

Among developing nations, the largest recipient of foreign direct investment has been __________.

answer

China

question

Definition: Any business that has productive activities in two or more countries.

answer

multinational enterprise

question

Since the 1960s, two notable trends in the demographics of the multinational enterprise have been (1) the ___________ of non-US multinationals and (2) the growth of __________-multinationals.

answer

rise, mini

question

During the ________s, US firms accounted for about 2/3 of FDI and had the most multinationals. The ____________ ___________ was the second largest source country.

answer

1960, United Kingdom

question

The globalization of the world economy has resulted in a relative ___________ of US firms in the global marketplace.

answer

decline

question

The rise of the ___________ is lowering the barriers that small firms face in building international sales.

answer

Internet

question

The economies of many of the former Communist states are still relatively _____________, and disturbing signs of growing unrest and totalitarian tendencies continue to be seen in several Eastern European and Central Asian states.

answer

underdeveloped

question

Although China suppressed its pro-democracy movement in the ___________ ___________ massacre of 1989, it continues to move progressively toward greater free market reforms.

answer

Tiananmen Square

question

In ____________ ___________, democracy and free market reforms have been evident because in the past two decades, debt and inflation have been down, governments have sold state-owned enterprises to private investors, foreign investment is now welcome, and the region's economies have expanded.

answer

Latin America

question

What three countries have led the way toward the growing Latin American economy?

answer

Brazil, Mexico, Chile

question

In the case of Eastern Europe, Central Asia, and Latin America, substantial _____________ are accompanied by substantial _____________.

answer

opportunities, risks

question

It is always hazardous to use established ____________ to predict the future.

answer

trends

question

Demonstrations against globalization began in December 1999 toward the WTO, when protestors blamed the trend for causing ___________ losses in industries under attack from foreign competitors, downward pressure on ____________ ___________ of unskilled workers, environmental ___________, and the cultural ____________ of global media and multinational enterprises.

answer

job, wage rates, degradation, imperialism

question

One concern frequently voiced by globalization opponents is that falling barriers to international trade destroy ___________ jobs in wealthy advanced economies.

answer

manufacturing

question

Data suggests that over the past two decades, labor's share of national income has __________.

answer

declined

question

Analysis suggests that the share of national income enjoyed by skilled labor has __________, suggesting that the fall in labor's share has been due to a fall in the share taken by unskilled labor.

answer

increased

question

A 2002 US study concluded that falling unemployment rates have brought a fairly broad-based wage _________.

answer

growth

question

Evidence suggests that ____________ ___________ has had a greater impact than globalization on the declining share of national income enjoyed by labor.

answer

technological change

question

True/False: The wage gap between developing and developed nations is closing.

answer

true

question

Pollution levels are ___________ in the world's poorer countries, suggesting that firms in developed countries do not outsource labor because of higher regulations.

answer

higher

question

Econometric studies have found consistent evidence of a hump-shaped relationship between __________ levels and __________ levels, with the exception of carbon dioxide emissions.

answer

income, pollution

question

What does HIPC stand for?

answer

highly indebted poor countries

question

In 2000, the US enacted legislation to provide $435 million in debt relief for __________. The US also agreed to sell some of its gold reserves to use the proceeds to help with debt relief.

answer

HIPCs

question

In order to help HIPCs, debt relief programs must be matched by wise investment in ____________ ____________ that boost economic growth and the adoption of economic policies that facilitate ______________ and ____________.

answer

public projects, investment, trade

question

Definition: Any firm that engages in international trade or investment.

answer

international business

question

True/False: A firm must become a multinational enterprise to engage in international business.

answer

false

question

Managing an international business is different from managing a purely domestic business for at least four reasons: (1) countries are ___________; (2) the range of problems confronted by a manager in an international business is __________ and the problems are more __________; (3) an international business must find ways to work within ___________ imposed by government intervention in international trade; and (4) international transactions involve ___________ money in financial transactions.

answer

different, wider, complex, limits, converting

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