chapter 11 questions Flashcards
(15 cards)
Summarize the four examples given on page 226 about how economic globalization has affected people’s lives.
Water: the bottle water industry is worth $100 billion a year when it didn’t exist 15 years ago.
Transnationals: the sales of large transnational corporations exceed the GDP of some countries.
Genetically modified food: the agribusiness industry can produce food with altered DNA.
Technology: advances in transportation technology allows for quick transport of people and
goods.
What is the main purpose of the World Trade Organization?
To settle trade disputes among the governments and organize trade negotiations and meetings.
Describe how trade disputes are settled among WTO member countries.
They are brought before special tribunals of trade experts and lawyers. The tribunals decide
which country is in the wrong and what that country is required to do to meet WTO regulations.
What countries make up the G8?
Canada, France, Germany, Italy, Japan, Russia, United Kingdom, United States
How does the G8 influence global institutions?
It has nearly 50% of the vote in the World Bank and IMF and also has considerable impact on the policies of the WTO.
List some of the criticisms of the G8. What do supporters of the G8 say to these criticisms?
It represents the interests of an elite group of developed countries and does not consider the needs of the rest of the world. Countries with fast growing economies like China, India and Latin American and African countries are not included in the G8.
Supporters say that it has been instrumental in aiding less developed countries. It has campaigns to combat disease like HIV/AIDS and has development programs and debt relief plans.
Describe how Canada’s leadership role in La Francophonie supports French-speaking areas of the world.
Canada is one of the original and wealthiest members. Canada wants to accelerate the economic integration of the least developed Francophone countries into the international trading system
What is the mandate of CIDA? Explain two ways it helps around the world.
CIDA supports sustainable development in developing countries, reducing poverty and contributing to a secure, equitable, and prosperous world. It provides short-term humanitarian aid during natural disasters.
What decisions are made at the head office of a transnational corporation?
financial decisions and research and product deverlopment.
Summarize the four ways operating as a transnational corporation improves profitability.
- Free access to new markets boosts revenues for tnc.
- Governments often offer tax concessions or development grants.
- Geographic diversification improves financial stability.
- Direct access to cheaper raw materials and labour reduces operating costs.
How can a transnational corporation reduce poverty in less developed countries?
(1) By bringing wealth into a country via employment and investment.
(2) By providing jobs either directly in the subsidiary or indirectly through the growth of local business that provide goods and services to newly employed workers who can now afford them.
(3) Passing on expertise in their field and increasing a country’s human capital.
(4) Paying taxes to the foreign country’s government.
How can a transnational corporation do harm in less developed countries?
- Employing managers from other countries, despite local labor and low wages.
- Utilizing capital-intensive production over labour-intensive ones due to high unemployment.
- Influencing governments for subsidies, grants, tax exemptions, and environmental laws.
- Ignoring human rights issues
How have transnational companies negatively impacted developed countries?
By leading to job losses as jobs and entire industries are moved off shore. Market share has been lost to developing countries that can produce certain goods more cheaply. An example is the Canadian subsidiary of GM losing jobs to cuts that were made by the parent company in the US.
Explain how Caterpillar is an international tractor manufacturer.
The parts for the tractors are manufactured in several countries: engines in Japan, transmissions in the US, winches in Brazil and axles in Belgium. The parts are shipped to Ontario where they
are assembles into tractors. The completed tractors are sold around the world.
What do some economists say is the reason for the growth of transnational corporations?
The relatively peaceful times that followed WW2.
