Which of the following is a consequence of globalization?

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Question
1.
1. Which of the following is
a consequence of globalization? (Points : 2)

      Decreasing interdependence
between national economies
      Increasing outsourcing of
services
      Differentiation of material
culture
      Increase in barriers to
cross-border trade

Question
2.
2. Which of the following
has enabled globalization of markets? (Points : 2)

      Differentiation amongst
national markets
      Falling barriers to cross
border trade
      Reduced homogeneity of material
culture across the world
      Increased government ownership
of factors of production

Question
3.
3. Which of the following
factors hinders globalization of consumer goods market? (Points :
2)

      National differences in tastes
and preferences
      Higher production costs in
developed nations
      Homogenization of material
culture
      Increasing outsourcing of goods
and services

Question
4.
4. Globalization of markets
results in markets becoming _____. (Points : 2)

      less interdependent
      less diverse
      more protected
      less competitive

Question
5.
5. 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 _____. (Points :
2)

      homogenizing markets
      vertical integration
      outsourcing
      horizontal
integration

Question
6.
6. Early outsourcing efforts
were primarily confined to _____. (Points : 2)

      health care
      service activities
      technological research
      manufacturing
activities

Question
7.
7. 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? (Points : 2)

      Reduced tariffs on imports of
manufactured goods
      Government regulations
      Issues associated with economic
and political risk
      Barriers to foreign direct
investment

Question
8.
8. The General Agreement on
Tariffs and Trade (GATT) was responsible for _____. (Points :
2)

      protecting government owned
enterprises
      policing the global
marketplace
      limiting nuclear testing
      promoting environment friendly
technology

Question
9.
9. Which of the following is
NOT true regarding culture? (Points : 2)

      Culture is static.
      Culture varies across and
within nations.
      Culture is a system of values
and norms that are shared among a group of people.
      Culture involves the knowledge
and beliefs of people.

Question
10.
10. Cross-cultural literacy
refers to: (Points : 2)

      an individual’s self-concept
derived from perceived membership in a relevant social group.
      the phenomenon of merging and
converging cultures.
      abstract ideas about what a
group believes to be good, right, and desirable.
      an understanding of how
cultural differences can affect business.

Question
11.
11. _____ is/are best
defined as shared assumptions about how things ought to be. (Points
: 2)

      Norms
      Values
      Society
      Culture

Question
12.
12. The system of values
and norms that are shared among a group of people and that when
taken together constitute a design for living best defines: (Points
: 2)

      society.
      value systems.
      principles.
      culture.

Question
13.
13. Social rules and
guidelines that prescribe appropriate behavior in particular
situations are best described as: (Points : 2)

      norms.
      values.
      culture.
      society.

Question
14.
14. Norms refer to: (Points
: 2)

      the social rules and guidelines
that prescribe appropriate behavior in particular situations.
      a system of values that are
shared among a group of people.
      the routine conventions of
everyday life.
      abstract ideas about what a
group believes to be good, right, and desirable.

Question
15.
15. A group of people who
share a common set of values and norms form a: (Points : 2)

      culture.
      society.
      country.
      caste.

Question
16.
16. _____ are the routine
conventions of everyday life. (Points : 2)

      Folkways
      Mores
      Rites
      Beliefs

Question
17.
17. Which of the following
refers to a situation where a government does not attempt to
influence through quotas or duties what its citizens can buy from
another country? (Points : 2)

      Economic patriotism
      Protectionism
      Free trade
      Offshoring

Question
18.
18. Which of the following
is a major benefit of engaging in free trade? (Points : 2)

      It helps to reduce the
financial volatility in global markets.
      It helps the countries protect
the jobs that are available to their citizens.
      It gives countries access to
products that they cannot produce.
      It allows the governments to
exert more control on businesses.

Question
19.
19. David Ricardo’s theory
of comparative advantage explains global trade in terms of the
_____. (Points : 2)

      first mover advantage that
certain countries and firms enjoy
      geographical differences
between various countries
      international differences in
labor productivity
      late mover advantage that
certain countries and firms possess

Question
20.
20. Which of the following
theories emphasizes the interplay between the proportions in which
the factors of production are available in different countries and
the proportions in which they are needed for producing particular
goods? (Points : 2)

      Porter’s theory
      Smith’s theory
      Ricardo’s theory
      Heckscher-Ohlin
theory

Question
21.
21. Identify the theory
that supports the view that in some cases countries export for the
reason that the world market can support only a limited number of
firms. (Points : 3)

      Heckscher-Ohlin theory
      Smith’s theory
      Ricardo’s theory
      New trade theory

Question
22.
22. Country A exports
electronic goods from Country B although there are no underlying
differences in factor endowments between the two countries. Which
of the following theories explains this anomaly? (Points : 3)

      Comparative advantage
theory
      New trade theory
      Ricardo’s theory
      Smith’s theory

Question
23.
23. Which of the following
observations is consistent with Michael Porter’s theory of national
competitive advantage? (Points : 3)

      Factors such as domestic demand
and domestic rivalry determine nations’ dominance on
production.
      Countries should produce only
those goods for which they have a comparative advantage.
      Interplay between the factors
of production cause international marketing decisions.
      International differences in
labor productivity determine nations’ supremacy in
production.

Question
24.
24. Which of the following
is a theory that can be used to justify limited government
intervention to support the development of certain export-oriented
industries? (Points : 3)

      Comparative advantage
theory
      Ricardo’s theory
      New trade theory
      Heckscher-Ohlin
theory

Question
25.
25. Which of the following
is NOT one of the main instruments of trade policy? (Points :
3)

      Tariffs
      Credit portfolios
      Local content
requirements
      Administrative
policies

Question
26.
26. Specific tariffs are:
(Points : 3)

      levied as a proportion of the
value of the imported good.
      government payment to domestic
producers.
      in the form of manufacturing or
production requirements of goods.
      levied as a fixed charge for
each unit of a good imported.

Question
27.
27. Tariffs do not benefit:
(Points : 3)

      consumers.
      domestic producers.
      governments.
      domestic firms.

Question
28.
28. Import tariffs: (Points
: 3)

      reduce the price of foreign
goods.
      create efficient utilization of
resources.
      reduce the overall efficiency
of the world economy.
      are unambiguously pro-consumer
and anti-producer.

Question
29.
29. By lowering production
costs, _____ help domestic producers compete against foreign
imports. (Points : 3)

      subsidies
      duties
      quotas
      tariffs

Question
30.
30. Which of the following
observations about subsidies is true? (Points : 3)

      Government subsidies must be
paid for, typically by taxing individuals and corporations.
      Subsidies are used to reduce
exports from a sector, often for political reasons.
      Whether subsidies generate
national benefits that exceed their national costs is
debatable.
      Subsidies help foreign
producers gain a competitive advantage over domestic
producers.

Question
31.
31. Which of the following
is a consequence of subsidies? (Points : 3)

      Subsidies make domestic
producers vulnerable to foreign competition.
      Subsidies lead to lowered
production.
      Subsidies protect inefficient
domestic producers.
      Subsidies produce revenue for
the government.

Question
32.
32. FDI occurs when a firm:
(Points : 3)

      ships its products from one
country to another.
      invests directly in facilities
to produce a product in a foreign country.
      invests in the shares of
another company operating in the same country.
      grants permission to another
company in a different country to use its brand name.

Question
33.
33. Which of the following
is an example of a greenfield investment? (Points : 3)

      A Chinese sugar maker setting
up a sugar crushing facility in Cuba.
      A Serbian automobile company
purchasing a Croatian component manufacturer.
      A Finnish mobile phone
manufacturer expanding its production facility in Finland.
      An Indian oil exploration
company acquiring an oil refining company.

Question
34.
34. The stock of FDI is:
(Points : 3)

      the amount of FDI undertaken
over a given period of time.
      the total accumulated value of
foreign-owned assets at a given time.
      the flow of FDI out of a
country.
      the amount of foreign direct
investment made by domestic companies over a given period of
time.

Question
35.
35. The _____ of FDI refers
to the amount of FDI undertaken over a year. (Points : 3)

      stock
      net value
      accumulated value
      flow

Question
36.
36. Which of the following
is the prime reason why Africa has attracted FDI in recent years?
(Points : 3)

      Growth of the services
sector
      Complete deregulation of
markets
      Wave of privatization
      Raw material
availability

Question
37.
37. Which of the following
summarizes the total amount of resources invested in factories,
stores, office buildings, and the like? (Points : 3)

      Gross capital index
      Gross fixed capital
formation
      Gross domestic product
      Gross national
product

Question
38.
38. Which of the following
primarily explains why developing nations are characterized by
lower percentage of cross-border mergers and acquisitions compared
to developed nations? (Points : 3)

      Fewer target firms to acquire
in developing nations
      Fierce opposition to mergers
and acquisitions in developed nations
      Unwillingness of foreign
companies to invest in developing nations
      Presence of import quotas in
developing nations

Question
39.
39. From least integrated
to most integrated, the levels of economic integration are: (Points
: 3)

      a common market, a free trade
area, an economic union, a customs union, and a political
union.
      a free trade area, a customs
union, a common market, an economic union, and a political
union.
      a customs union, a free trade
area, a common market, a political union, and an economic
union.
      a common market, an economic
union, a customs union, a free trade area, and a political
union.

Question
40.
40. Country X and Country Y
reach an agreement to boost bilateral trade. They agree to remove
all barriers to the trade of goods and services. They, however, are
free to determine their own trade policies with regard to
nonmembers. Which level of economic integration is this an example
of? (Points : 3)

      A customs union
      An economic union
      A common market
      A Free trade area

Question
41.
41. Which feature of a
customs union differentiates it from a free trade area? (Points :
3)

      Harmonization of members’ tax
rates
      A common currency
      A common external trade policy
toward nonmembers
      Ability of factors of
production to move freely between members

Question
42.
42. A _____ has no barriers
to trade between member countries, includes a common external trade
policy, and allows factors of production to move freely between
members. (Points : 3)

      common market
      customs union
      free trade area
      bonded market

Question
43.
43. Three countries agree
to remove barriers to trade between member countries and adopt a
common external trade policy toward nonmembers. They also agree to
allow people and other factors of production to move freely across
their borders. Which level of economic integration is this an
example of? (Points : 3)

      Bonded market
      Customs union
      Free trade area
      Common market

Question
44.
44. Which feature of a
common market differentiates it from a customs union? (Points :
3)

      Harmonization of members’ tax
rates
      A common currency
      A common external trade policy
toward nonmembers
      Ability of factors of
production to move freely between members

Question
45.
45. A(n) _____ involves the
free flow of products and factors of production between member
countries, the adoption of a common external trade policy, a common
currency, harmonization of members’ tax rates, and a common
monetary and fiscal policy. (Points : 3)

      economic union
      common market
      customs union
      free trade area

Question
46.
46. Which feature of an
economic union differentiates it from a common market? (Points :
3)

      Free flow of products and
factors of production between member countries
      A common monetary and fiscal
policy
      A common external trade policy
toward nonmembers
      Ability of factors of
production to move freely between members

Answer

1) B

2) B

3) A

4) B

5) C

6) D

7) A

8) B

9) A

10) D

11) B

12) D

13) A

14) A

15) B

16) A

17) C

18) C

19) C

20) D

21) D

22) B

23) A

24) C

25) B

26) D

27) B

28) C

29) A

30) A

31) B

32) B

33) A

34) B

35) D

36) D

37) B

38) A

39) B

40) D

41) C

42) A

43) D

44) D

45) A

46) B

1.)
Increasing outsourcing of services


2.)

Falling barriers to cross border trade


3)

National differences in tastes and preferences


4.)

less diverse


5.)

outsourcing


6.)

manufacturing activities


7.)

Reduced tariffs on imports of manufactured goods


8.)

policing the global marketplace


9.)

Culture is static


10.)

the phenomenon of merging and converging cultures


11.) Values


12.)

culture


13.)

norms


14.)

the social rules and guidelines that prescribe appropriate behavior
in particular situations.


15.)

society


16.)

Folkways


17.)

Free trade


18.)
It gives countries access to products that they cannot
produce

19.) international differences in labor productivity

20.)
Heckscher-Ohlin theory

21.)
New trade theory


22.)

New trade theory


23.)

Factors such as domestic demand and domestic rivalry determine
nations’ dominance on production.


24.)

New trade theory


25.)

Credit portfolios


26.)

levied as a fixed charge for each unit of a good
imported


27.)

consumers


28.)

reduce the overall efficiency of the world economy


29.)

subsidies


30.)

Government subsidies must be paid for, typically by taxing
individuals and corporations.


31.)

Subsidies protect inefficient domestic producers


32.)

invests directly in facilities to produce a product in a foreign
country.


33.)
A Chinese sugar maker setting up a sugar crushing
facility in Cuba

34.) the
total accumulated value of foreign-owned assets at a given time

35.)
flow


36.)

Raw material availability


37.)

Gross fixed capital formation


38.)

Fewer target firms to acquire in developing nations


39.)
a free trade area, a customs union, a common market, an
economic union, and a political union

40.)
A customs union

41.)
A common external trade policy toward nonmembers


42.)

common market


43.)

Common market


44.)

Ability of factors of production to move freely between
members

45.)

economic union

46.)

A common monetary and fiscal policy

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