1.
(p. 7)
As a result of globalization, we have been moving toward a world in which national
economies are relatively self-contained entities.
2. By offering the same basic product worldwide, firms help to create a global market.
3. A company has to be the size of a multinational giant to facilitate, and benefit from, the
globalization of markets.
4. As a result of globalization, companies rarely need to customize marketing strategies,
product features, and operating practices in different countries.
5. Globalization has resulted in greater uniformity replacing diversity across
national markets.
6. As firms follow each other around the world, they bring with them many of the assets that
served them well in other national markets. Thus, greater diversity replaces uniformity.
7. Substantial impediments, such as barriers to foreign direct investment, make it difficult
for firms to achieve the optimal dispersion of their productive activities to locations around the
globe.
8. The World Trade Organization, the International Monetary Fund and its sister institution
the World Bank, and the United Nations were all created by voluntary agreement between
individual nation-states.
9. The International Monetary Fund and the World Bank were both created in 1944 by 44
nations that met at Bretton Woods, New Hampshire.
10. The WTO is seen as the lender of last resort to nation-states whose economies are in
turmoil and whose currencies are losing value against those of other nations.
11. The IMF is less controversial than its sister institution, the World Bank.
12. In return for loans, the IMF requires nation-states to adopt specific economic policies
aimed at returning their troubled economies to stability and growth.
13. Foreign direct investment (FDI) occurs when a firm invests resources in business
activities outside its home country.
14. After World War II, the advanced nations of the West committed themselves to
increasing barriers to the free flow of goods, services, and capital between nations.
15. The Uruguay Round, held under the umbrella of GATT, extended GATT to cover services
as well as manufactured goods.
16. The lowering of trade and investment barriers allows firms to base production at the
optimal location for that activity.
17. As a result of international trade, the economies of the world’s nation-states are
becoming less intertwined.
18. The globalization of markets and production and the resulting growth of world trade,
foreign direct investment, and imports all imply that firms are finding it easier to protect
themselves from the attack of foreign competitors.
19. Containerization has revolutionized the transportation business, significantly lowering the
costs of shipping goods over long distances.
20. While advances in telecommunications are creating a global audience, advances in
transportation are creating a global village.
21. The real costs of information processing and communication have fallen dramatically in
the past two decades.
22. The Internet has been a major force facilitating international trade in services.
23. Countries that markedly increased their share of world output from 1960 to 2010 included
Germany, France, and the United Kingdom.
24. The United States accounted for a significantly larger share of the world economy in 2011
than it did in the 1960’s.
25. Beginning in the 1970s, European and Japanese firms began to shift labor-intensive
manufacturing operations from developing nations to their home countries where labor costs
were lower.
26. The stock of foreign direct investment refers to the total cumulative value of foreign
investments in a country.
27. Throughout the 1990s, the amount of investment directed at both developed and
developing nations increased dramatically
28. Among developing nations, the largest recipient of foreign direct investment has been
China.
29. Although most international trade and investment is still conducted by large firms, many
medium-size and small businesses are becoming increasingly involved in international trade and
investment.
30. The rise of the Internet is increasing the barriers that small firms face in building
international sales.
31. Many of the former Communist nations of Europe and Asia seem to share a commitment
to democratic policies and free market economies.
32. In the past quarter century, the volume of cross-border trade and investment has been
growing less rapidly than global output.
33. One concern frequently voiced by globalization opponents is that falling barriers to
international trade destroy manufacturing jobs in wealthy advanced economies such as the
United States and western Europe.
34. It is possible that economic growth in developed nations has offset the fall in the share of
national income enjoyed by unskilled workers, raising their living standards.
35. One concern of globalization opponents is that it undermines the influence of
supranational organizations and promotes the sovereignty of individual nation–states.
36. In general, as countries get richer, they enact tougher environmental and labor
regulations.
37. Highly indebted poor countries (HIPCs) can bootstrap themselves out of poverty by
pursuing retaliatory trade policies rather than free trade policies.
38. A firm has to become a multinational enterprise, investing directly in operations in other
countries, to engage in international business.
39. Despite all the talk about the emerging global village, differences between countries such
as cultures and political systems are very profound and enduring.
40. Differences among countries require that an international business vary its practices
country by country.