48) Two major forces that underlie the expansion of globalization are falling barriers to trade and
investment, and ________.
A) elevation of nationalism
B) rise of closed economies
C) political stagnation
D) technological innovation
49) As former competitors in many industries link up to challenge others on a worldwide basis,
________ occurs.
A) segregation
B) denationalization
C) consolidation
D) technological stagnation
50) The purpose of the General Agreement on Tariffs and Trade (GATT) was to ________.
A) create an international currency
B) regulate exchange rates
C) create regional trade organizations
D) promote free trade
51) ________ place limits on the quantity of a product being imported.
A) Embargoes
B) Trade blocs
C) Nontariff barriers (Quotas)
D) Anti-dumping duties
52) Which of the following accurately identifies a difference between GATT and the WTO?
A) GATT could enforce member compliance with agreements, but the WTO cannot.
B) At its inception, GATT had more member nations than the WTO currently has.
C) GATT withdrew the most–favored-nation clause, but the WTO reinstated it.
D) GATT rules did not cover trade in services, but the rules of the WTO do.
53) The ________ replaced the institution of GATT while retaining all of the former GATT
agreements.
A) World Trade Organization
B) Federation of International Trade Association
C) Commonwealth of Nations
D) International Monetary Fund
54) Under the WTO agreement, ________.
A) a dispute resolution mechanism allows countries to bring grievances to the WTO against
countries that levy inappropriate trade discrimination measures
B) there is no dispute resolution mechanism except for trade involving environmental products
C) countries are allowed to place trade barriers on member countries with no particular
justification, because like GATT the WTO has no enforcement mechanism
D) tariffs are permitted to be levied by developed countries against developing countries but not
against each other
55) Some nations encourage ________ because of recent resistance to worldwide trade
agreements.
A) regional pacts
B) homogeneous markets
C) product standardization
D) domestic manufacturing
56) The KOF Index measures the ________.
A) distribution of the global workforce
B) extent of globalization
C) gross regional product of an area
D) extent of technological innovation in a nation
57) The ________ is an agency created to provide financing for national economic development
efforts.
A) Global Financial Markets Association
B) World Trade Organization
C) Financial Stability Board
D) World Bank
58) Which of the following was originally created to regulate fixed exchange rates and enforce
the rules of the International monetary system?
A) International Monetary Fund
B) World Trade Organization
C) European Union
D) World Bank
59) The General Agreement on Tariffs and Trade (GATT) was designed to promote free trade by
reducing both tariffs and nontariff barriers to international trade.
60) GATT’s contribution to trade liberalization made possible the expansion of world trade in the
second half of the twentieth century.
61) The World Trade Organization’s dispute settlement system has the ability to penalize
offending nations.
62) The goal of a free trade agreement is to abolish all tariffs among member countries.
63) Resistance to worldwide trade agreements has resulted in some nations placing greater
emphasis on regional pacts.
64) Gross national product (GNP) is the value of all goods and services imported into a country
over a one-year period.
65) A characteristic of the world‘s least-global nations is low levels of corruption.
66) The role of the World Bank is to provide financing for national economic development
efforts for infrastructure development.
67) The rules of the international monetary system are enforced by the World Bank.
68) Export-processing zones are special areas in which companies engage in tariff–free importing
and exporting.
69) Identify the World Trade Organization’s (WTO) three main goals and explain how the WTO
differs from the General Agreement on Tariffs and Trade (GATT).
70) Compare and contrast the purposes of the World Bank and the International Monetary Fund.
71) According to the opponents of globalization, which of the following occurs as a result of
worker dislocation brought about by globalization?
A) increased labor costs for companies
B) lower workers’ wages in developed nations
C) surfeit of jobs in developed nations
D) increased investment in individual education
72) Opponents argue that globalization ________.
A) eliminates manufacturing jobs in developed nations
B) generates labor market flexibility in developed nations
C) brings an end to practices like outsourcing
D) slows down the employment rate in developing nations
73) Globalization is criticized because it ________.
A) does not generate labor market flexibility in developing nations
B) prevents developed countries from outsourcing work to developing nations
C) creates fewer manufacturing jobs in developing nations
D) exploits workers in low-wage nations
74) Supporters affirm that globalization ________.
A) brings an end to practices like outsourcing
B) causes worker dislocation that gradually lowers wages
C) increases wealth and efficiency in all countries
D) curbs market flexibility in developed nations
75) Which of the following terms is used to refer to widespread job turnover throughout an
economy?
A) redeployment
B) restructuring
C) onboarding
D) churning
76) Trade unions claim that by permitting international firms to continually move to nations with
________, globalization reduces labor’s bargaining power and forces overall labor standards
lower.
A) better factory facilities
B) higher resource accessibility
C) lower labor standards
D) lower labor density
77) Critics of globalization argue that it eliminates jobs in developing nations.
78) Flexible labor markets allow workers to be redeployed rapidly to sectors of the economy
where they are highly valued.
79) It is difficult to compare globalization of business over time because shifting national borders
have changed the nature of transactions from domestic to international and vice versa.
80) Critics of globalization believe the overall gains that accrue to national economies are worth
the lost livelihoods of some workers.
81) Research shows that pollution-intensive U.S. companies tend to invest in nations with lenient
environmental standards.
82) International firms tend to support reasonable labor and environmental laws to expand future
local markets for their businesses.
83) Small businesses will be completely immune to events in the international business
environment.
84) Globalization’s impact on jobs and wages is an important topic for debate. Discuss the major
points for globalization in the jobs and wages debate, and describe how the actions of large
multinational corporations affect the issues in the jobs and wages debate.
85) A special region in which companies can engage in tariff-free importing and exporting is
called a(n) ________.
A) preferential trade area
B) export-processing zone
C) customs union
D) economic union
86) To minimize the economic inequality within developing nations, studies suggest that the
nations can boost incomes of their poorest citizens by ________.
A) rejecting globalization and sheltering themselves from exploitation
B) embracing globalization and integrating themselves into the global economy
C) fortifying trade barriers and discouraging exports
D) encouraging economic independence and restricting imports
87) Which of the following statements is true of developing countries that have embraced
globalization?
A) The countries have experienced an increase in life expectancy.
B) As a result of extensive commercialism, there has been a decline in personal income.
C) Relying upon developed countries for technology has rendered their talent pool stagnant.
D) Their rich cultural diversity hasn’t been affected by exposure to new cultures.
88) Pro–globalization economists believe globalization increases wealth in only developing
nations.
89) One argument in the debate surrounding globalization is about the inequality between
nations. Discuss the major points of the inequality between nations argument and describe how
falling barriers to trade and investment might help reduce the inequality between nations.
90) Critics of globalization say that global consumer-goods companies destroy ________.
A) the homogenization of markets
B) societal conformity
C) free trade areas
D) cultural diversity
91) Which of the following actions can be adopted by developed nations to lessen the negative
effects of globalization?
A) restrict the import of goods from developing countries
B) slash agricultural subsidies that hurt the exports of developing nations
C) discontinue foreign-aid programs to developing countries
D) pressurize developing nations to fend for themselves in matters of health and education
Scenario: Jeans Unlimited
Jeans Unlimited produces clothing for young adults. It designs its clothes at its New York
headquarters and produces them at facilities located in two Southeast Asian countries. The
company recently received negative press after one of its facilities was found using questionable
labor practices, such as, employing children and operating in a manner that damages the
environment.
92) Jeans Unlimited plans to set up new facilities that are designed specifically to reduce impact
on the environment. The management has emphasized on recycling and reusing most of their
resources. What concept is the company emphasizing on in this scenario?
A) sustainability
B) standardization
C) ethnocentricity
D) industrialization
93) Which of the following statements, if true, strengthens Donna’s argument?
A) People in low-wage nations have a high mortality rate and no access to healthcare facilities.
B) Because of the increase in employment opportunities, workers from developing countries
flock to developed countries.
C) Low-wage nations tend to have poorly developed transport and communication systems.
D) Many companies take advantage of lenient labor laws by setting up facilities in low–income
countries.
94) Which of the following statements, if true, weakens her argument?
A) The employment rate of developed nations has been declining because of international
outsourcing.
B) With the exposure to new technology and cultural trends, the standard of living in developing
countries has improved.
C) People in high-wage countries often can’t afford hospital care without financial assistance.
D) Labor market flexibility across the world has seen little improvement over the last decade.
95) Her argument is vulnerable to criticism because it fails to ________.
A) quantify the disparity between high-income and low-income nations
B) show that political and cultural factors have been taken into account
C) demonstrate the importance of market flexibility
D) highlight the environmental effect of globalization
96) Globalization tends to foster two important values, tolerance and ________.
A) nationalization
B) diversity
C) authoritarianism
D) heterogeneity
97) Each ________ is composed of unique cultural, political, legal, and economic characteristics
that define business activity within that nation’s borders.
A) capital market
B) national business environment
C) international bond market
D) operational center
98) ________ involves the idea that a nation-state is autonomous, cannot intervene in the affairs
of other nations, and can enter into binding international agreements.
A) National sovereignty
B) Authoritarianism
C) Cultural liberalism
D) Communalism
99) The global business environment consists of four distinct elements: the forces of
globalization, national business environments, the international business environment, and
________.
A) domestic investment opportunities
B) technological innovation
C) international firm management
D) multinational corporations
100) Describe the global business environment and each of its four elements.