Exam 1

Question 1

Does the globalisation of markets and production refer to the growing independence and self-sufficiency of countries worldwide?

Answer 1

False

Question 2

What kind of companies conduct international business today?

Answer 2

Large, multi-national enterprises, as well as small-medium enterprises

Question 3

Who are falling trade barriers facilitated by?

Answer 3

WTO

Question 4

Which trade still dominates the world trade today despite service trade having the higher growth rate most recently?

Answer 4

Merchandise trade

Question 5

What international business activities have the smallest scale by dollar value in the world today?

Answer 5

Foreign direct investment (FDI)

Question 6

Which country has the largest number of MNEs on the top 2000 MNEs list worldwide?

Answer 6

USA

Question 7

How did GATT majorly contribute to globalisation?

Answer 7

Reduced barriers to international trade and investment

Question 8

Which global institutions are the legacy of the Bretton Woods system?

Answer 8

IMF and World Bank

Question 9

What are the resources required for a country to source goods and services known as?

Answer 9

Factors of production

Question 10

Which global institution do nation-states turn to as last resorts when their economies are in turmoil?

Answer 10

The International Monetary Fund

Question 11

What is the definition of containerisation?

Answer 11

The practice of shipping goods in standardised containers that can be easily transferred between different modes of transport

Question 12

What is the outward stock of foreign direct investment?

Answer 12

The total cumulative value of foreign investments by firms domiciled in a nation outside of that nation’s borders

Question 13

What do the globalisation critics think is the reason for a decline in unskilled wage rates in advanced economies?

Answer 13

Migration of low-wage manufacturing jobs offshore

Question 14

When was the North American Free Trade Agreement (NAFTA) formed?

Answer 14

1994

Question 15

How much does air cargo contribute to the world trade by goods value?

Answer 15

33%

Question 16

Does the term political economy indicate that systems such as political, economic, and legal are independent of each other?

Answer 16

No

Question 17

Is a common law system based on tradition and precedent?

Answer 17

Yes

Question 18

Why does the civil law system have less flexibility than those under the common law system?

Answer 18

Because for the civil law, judges primarily apply codified laws which have limited flexibility to create new legal principles

Question 19

In what law system do contracts tend to be shorter and less detailed?

Answer 19

Common law

Question 20

What system is it where the interaction of supply and demand determines the quantity in which goods/services are produced?

Answer 20

Market system

Question 21

What is the main reason why product safety and product liability laws are in place?

Answer 21

To protect consumers

Question 22

What helps reduce the piracy (theft) of intellectual property?

Answer 22

The strong enforcement of intellectual property laws

Question 23

Why was the Foreign Corrupt Policies Act passed during the 1970s in the United States?

Answer 23

Because United States companies had bribed government officials in foreign countries in an attempt to win lucrative contracts

Question 24

What is a grease payment?

Answer 24

A small payment made to expedite/ensure the performance of a routine government action, such as processing paperwork

Question 25

Define a shadow economy

Answer 25

Refers to economic activity that may be in the form of unrecorded cash transactions, which are not reflected in official figures reported by a country

Question 26

What do people who argue innovation and entrepreneurial activity as the engines of long economic growth define innovation as?

Answer 26

They define it more broadly, rather than solely sticking to just new products

Question 27

Were command and mixed economies able to sustain the same sustained economic performance that market based system countries gained?

Answer 27

No

Question 28

What does it suggest if the purchasing power parity is greater than the gross national income?

Answer 28

Suggests that goods and services in India cost less than they would in other countries, particularly in more developed nations

Question 29

What are the three measures on the human development index?

Answer 29

Life expectancy at birth, educational attainment, and average incomes based on PPP estimates

Question 30

What is a planned economy?

Answer 30

When the state owns all means of production and there is little incentive for entrepreneurial activity

Question 31

Do economic advances lead to the emergence of increasingly prosperous middle and working class?

Answer 31

Yes

Question 32

Can the absence of a legal system that protects property rights and the lack of machinery to enforce it in a market economy result in a lack of incentive to engage in economic activity?

Answer 32

Yes

Question 33

What is a market economy?

Answer 33

Decisions are largely driven by supply and demand, with minimal intervention by the government