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29) Since the collapse of communism over a quarter of a century ago, formerly communist nations
have transformed their economies by globalizing their markets. This involves
A) regulating markets.
B) privatizing state-owned enterprises.
C) decreasing competition.
D) reducing foreign investment.
30) Which of the following is a consequence of globalization?
A) decreasing interdependence between national economies
B) increasing outsourcing of services
C) differentiating of material culture
D) increasing barriers to cross-border trade
31) Which of the following factors hinders globalization of consumer goods market?
A) national differences in tastes and preferences
B) higher production costs in developed nations
C) homogenization of material culture
D) increased outsourcing of goods and services
32) Globalization of markets results in markets becoming
A) more interdependent.
B) less diverse.
C) more protected.
D) less competitive.
33) A U.S. investment firm set up a customer service call center in India to take advantage of lower
labor costs. This is called
A) homogenizing markets.
B) vertical integration.
C) outsourcing.
D) horizontal integration.
34) Early outsourcing efforts were primarily confined to
A) health care.
B) service activities.
C) technological research.
D) manufacturing activities.
35) What impedes firms from achieving the optimal dispersion of their productive activities to
locations around the globe?
A) transportation costs
B) government deregulations
C) reduction of barriers to trade between countries
D) reduction of barriers to foreign direct investment
36) The General Agreement on Tariffs and Trade (GATT) was responsible for
A) protecting government-owned enterprises.
B) policing the global marketplace.
C) limiting nuclear testing.
D) promoting environment friendly technology.
37) 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.
A) International Development Association
B) World Bank
C) International Court of justice
D) World Trade Organization
38) The World Trade Organization promotes
A) the lowering of barriers to cross-border trade and investment.
B) the development of poor nations through low-interest loans.
C) state ownership of major enterprises.
D) the regulation of national economies.
39) What is true about the International Monetary Fund?
A) It is primarily responsible for policing the world trading system.
B) It is seen as the lender of last resort to nation-states whose economies are in turmoil.
C) It is responsible for establishing multinational treaties to govern the global business system.
D) It was established to formulate a coordinated policy response to financial crises in developing
nations.
40) The ________ was established on October 24, 1945, by 51 countries committed to preserving
peace through international cooperation and collective security.
A) World Trade Organization
B) United Nations
C) G20
D) World Bank
41) The G20 was originally established to
A) preserve peace through international cooperation and collective security.
B) maintain order in the international monetary system.
C) formulate a coordinated policy response to financial crises in developing nations.
D) manage, regulate, and police the global marketplace.
42) Which of the following is a factor of production?
A) tariffs
B) transportation costs
C) capital
D) government
43) Which of the following focuses on making low-interest loans to cash-strapped governments in
poor nations that wish to undertake significant infrastructure investments?
A) the WTO
B) the GATT
C) the World Bank
D) the IMF
44) Which of the following was established to maintain order in the international monetary
system?
A) the WTO
B) the GATT
C) the World Bank
D) the IMF
45) Which of the following is true of the IMF?
A) It is often seen as the lender of first choice to nation-states whose economies are in turmoil.
B) Its loans come with no strings attached.
C) It is the less controversial of the two sister institutions, the IMF and the World Bank.
D) It has emerged as a significant player in the global economy.
46) The volume of world trade in merchandise is growing faster than world GDP. This implies that
A) more firms are dispersing their production processes to global locations.
B) the economies of the world's nation-states are becoming more independent from each other.
C) the global economy is headed for a large downward correction.
D) the world is becoming poorer.
47) ________ occurs when a firm exports goods or services to consumers in another country.
A) International trade
B) Foreign direct investment
C) Inward investment
D) Outsourcing
48) In 2009, the financial crisis in the United States was triggered by
A) the global hike in the price of crude oil.
B) the slowdown in U.S. imports, due to political pressure.
C) liberal lending policies by U.S. banks to homeowners.
D) the artificial fixing of the currency rate by China.
