Module 1 Flashcards by Glennis Stott

Which term refers to the shift toward a more integrated and interdependent world economy?

Nationalism

Isolationism

Democracy

Globalization

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Renata is traveling across Europe and is surprised to find Starbucks, McDonald’s, and Coca-Cola in nearly every city she visits. This shows a convergence of consumer tastes, which creates a _____.

stock of FDI

mini-multinational

globalization of markets

globalization of production

globalization of markets

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When Jerry started his small appliance manufacturing company in the 1950s, every component part was made in the United States and the product was assembled in the United States. Today, he sources the components from China. The change at this company is an example of the _____.

purchasing power parity

globalization of production

Sullivan principle

tragedy of the commons

globalization of production

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The International Monetary Fund and the World Bank are both examples of _____ that help govern the global business system.

foreign markets

mini-multinationals

global institutions

federal mandates

global institutions

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A U.S.-based shoe company has decided to invest in a British company that specializes in clasps and buckles. This would be an example of _____.

repatriation

market diversity

international trade

foreign direct investment

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It is common practice for people today to use products that are produced or assembled in various nations around the world. This is a reflection of _____.

globalization

dynamism

nationalism

centralization

globalization

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While lowering trade barriers initially made global production possible, the advent of technology made globalization a reality.

True false question.
True
False

True

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The globalization of _____ is the term used to describe the merging of national markets into one large global place.

institutions

consumers

production

markets

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The doubling of the power of microprocessor technology while the costs of its production decreases by half is called ______ Law.

Skinner’s

Keyne’s

Maslow’s

Moore’s

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Paragon Corp., based in Ohio, sources goods from Southeast Asia to take advantage of labor cost savings. This company is benefiting from _____.

domestic production

a franchise operation

intrastate investment

the globalization of production

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The ______ has developed into the information backbone of the global economy and reduced the constraints of location, scale, and time zone.

GATT

IMF

WTO

Internet

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Global institutions are needed to _____.

shift economic power away from national governments

promote the raising of barriers to cross-trade and investment

prevent firms from offshoring their production activities

stabilize and monitor the global marketplace

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During the 1960s, which country was the predominant world power in terms of foreign direct investment?

The United States

China

The United Kingdom

Germany

The United States

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Foreign direct investment occurs when a(n) _____.

investment is made by a company based in one country into a company or entity based in another country

firm exports goods or services to consumers in another country

stock holding is presented in both domestic and foreign currency

expatriate manager is sent to work in a foreign subsidiary but is directed by the home company

investment is made by a company based in one country into a company or entity based in another country

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While the United States was the dominant industrial power in the early 1960s, by 2018, _____ took over that role.

Italy

China

France

Germany

China

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Advances in information processing and communication are two ways _____ has made the globalization of markets a reality.

technology

media

logistics

production

technology

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During the 1960s, U.S. firms created just over _____ of worldwide foreign direct investment and British firms were second accounting for just over 10 percent.

35 percent

65 percent

80 percent

20 percent

65 percent

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Moore’s law predicts that

computer power will double every 18 months.

costs for production of microprocessors doubles continually.

software is getting slower more rapidly than hardware becomes faster.

software is surpassing hardware in terms of speed and efficiency.

computer power will double every 18 months.

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A(n) ______ is any entity that conducts business in at least two countries.

multinational enterprise

conglomerate

intrastate corporation

transnational union

multinational enterprise

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The first web browser was introduced to the public in the 1970s and started the explosive growth of the Internet in foreign transactions.

True false question.
True
False

False

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Former communist nations present opportunities to Western international business as these nations show continued commitment to _____.

tyranny

monarchy

democracy

plutocracy

democracy

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Select the four facts that described the demographics of the global economy up until the 1960s.

U.S. dominance in the world economy and world trade

Roughly half of the globe was off-limits to Western international business

U.S. dominance in world foreign direct investment

U.S. dominance in underdeveloped, third-world countries

U.S. retraction from all global agreements

The dominance of large, multinational U.S. firms in the international business scene

U.S. dominance in the world economy and world trade

Roughly half of the globe was off-limits to Western international business

U.S. dominance in world foreign direct investment

The dominance of large, multinational U.S. firms in the international business scene

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Current trends indicate that, due to the emerging economies, the world is moving _____ an economic system that is more favorable for international business.

Multiple choice question.

further away from

closer to

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In the early 1960s, the United States was the world’s dominant industrial power. How does the U.S. position compare today?

It has grown significantly in terms of industrial power.

It is the only nation to see a decrease in its industrial power.

It has about the same industrial power.

It has diminished industrial power.

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According to the supporters of globalization, falling barriers to international investment restrict the formation of an integrated and interdependent global economy. help to create employment opportunities in countries that participate in the global trading system. will significantly raise the prices for goods and services. will lower the incomes of consumers.

help to create employment opportunities in countries that participate in the global trading system.

As the barriers to the free flow of goods, services, and capital fell during the 1970s, one motivation for foreign direct investment by non-U.S. firms was the desire to move production activities to more desirable locations. decrease their shares of world output. limit the use of communication technology. raise the barriers to cross-border investments.

move production activities to more desirable locations.

Critics of globalization protest in order to diminish the impact of the culture of multinational enterprises on the world. lower the barriers to cross-border investments. increase the number of enterprises that offshore their business activities. encourage a shift toward a more integrated and interdependent global economy.

diminish the impact of the culture of multinational enterprises on the world.

Which of the following are notable trends in the demographics of multinational enterprises since the 1960s? Multiple select question. The growth of mini-multinationals The decline of non-U.S. multinationals The rise of non-U.S. multinationals The decline of mini-multinationals

The growth of mini-multinationals The rise of non-U.S. multinationals

According to the critics of globalization, which of the following are results of falling trade barriers? Multiple select question. The destruction of manufacturing jobs in advanced economies Greater opportunities for manufacturing in developed countries A reduction in the pool of global labor A depression of wages in developed nations

The destruction of manufacturing jobs in advanced economies A depression of wages in developed nations

The risks of doing business in countries that are facing revolutions are not impacted by the threat of revolution. lower than in countries not facing revolutions. higher than in countries not facing revolutions. the same as countries not facing revolutions

higher than in countries not facing revolutions.

Critics of globalization point out that free trade allows firms to abuse the weak labor and environmental laws in developing countries. minimizes pollution in the world's poorer countries. provides developed nations with a cost advantage over developing nations. reduces job opportunities in developing nations where wages are much lower.

allows firms to abuse the weak labor and environmental laws in developing countries.

If you were to describe the global economy of the twenty-first century, it would be accurate to say that more nations are becoming part of the developed world. barriers to the free flow of goods have been increasing. globalization limits a country's movement toward greater economic development. fewer nations are adopting liberal economic policies.

more nations are becoming part of the developed world.

One concern voiced by critics of globalization is that with globalization, companies are likely to move their operations to countries with more stringent labor and environment regulations. an interdependent global economy shifts economic power away from national governments and toward organizations such as the United Nations. falling barriers to cross-border trade and investment reduce job opportunities in developing nations where wages are much lower. globalization increases the wage rates of unskilled workers in advanced countries.

an interdependent global economy shifts economic power away from national governments and toward organizations such as the United Nations.

Influential economists, politicians, and business leaders who favor globalization argue that falling barriers to international trade drive the economy toward greater prosperity. increasing cross-border investment will increase the prices for goods and services. raising barriers to international investments will increase job opportunities in developing nations. lowering trade barriers decreases the incomes of consumers.

falling barriers to international trade drive the economy toward greater prosperity.

The division between rich and poor nations has _____________________ (increased or decreased) with the advent of globalization.

increased

Some demonstrations against globalization are based on the idea that falling barriers to international trade result in job losses in industries targeted by foreign competitors. reduce interdependency between countries. reduce uniformity among national markets. increase the choice of goods and services to consumers.

result in job losses in industries targeted by foreign competitors.

A(n) ______ business is any firm that engages in cross-border trade or investment. transnational intranational supranational international

international

The opponents of globalization argue that falling barriers to international trade will eliminate manufacturing jobs in wealthy economies. prevent countries from being interdependent on one another. reduce job opportunities in developing nations where wages are much lower. increase service jobs around the world.

eliminate manufacturing jobs in wealthy economies.

When NAFTA was first introduced, what was the biggest argument opponents presented? Multiple choice question. U.S. firms would move manufacturing to Mexico and feel free to pollute the air and employ child labor. Canadian firms would receive the most benefit because they would only be exporting goods and would not import from the United States or Mexico. The United States would pay lower tariffs than both Mexico and Canada combined. Mexican citizens who had immigrated to the United States would be paid less than their counterparts back home.

U.S. firms would move manufacturing to Mexico and feel free to pollute the air and employ child labor.

Supporters of globalization argue that bodies such as the World Trade Organization and the United Nations exist to serve the collective interests of member states, not to subvert those interests. True false question. True False

True

According to critics of globalization, increased free trade and investment over the past few decades have reduced job opportunities in developing nations. broadened the gap between the rich and poor nations. decreased the selection of goods and services available to consumers. prevented countries from being interdependent on one another.

broadened the gap between the rich and poor nations.

The political economy of a country refers to the interaction of the political, economic, and _____ systems of a country. social education legal business

legal

Political systems that emphasize individualism tend to promote _____. a planned economy totalitarianism state-run businesses democracy

democracy

Collectivism refers to a political system that generally supports a pure market economy and privately-owned enterprises. generally emphasizes individual freedom and self-expression. restricts an individual’s right to do something on the grounds that it runs counter to the “good of society.” stresses that the welfare of the society is best served by letting people pursue their own economic self-interest.

restricts an individual’s right to do something on the grounds that it runs counter to the “good of society.”

According to Karl Marx, the pay of workers in a capitalist society reflects the full value of their labor. True false question. True False

FALSE

Social democrats advocate for _____. achieving socialism through non-violent means private-ownership of the basic means of production, distribution, and exchange achieving socialism by emphasizing individual interests over societal goals the idea of establishing a totalitarian dictatorship

achieving socialism through non-violent means

The term ______ refers to the interconnection of the political, economic, and legal systems of a country. transnational economic development political economy cultural values

political economy

______ refers to the process of selling state-owned enterprises to private investors. Privatization Customization Depersonalization Commercialization

Privatization

The system of government in a nation is called the _____ system. social economic political parliamentary

political

Which statement BEST describes a totalitarian system? It is a form of government in which the state recognizes no limits to its authority and strives to regulate all aspects of public and private life. It refers to a political system that typically asserts the primacy of individual economic and political freedom over societal goals. It is a form of government that typically aims to achieve socialism by democratic means rather than violent revolution or dictatorship. It refers to a political system in which government is by the people, exercised either directly or through elected representatives.

It is a form of government in which the state recognizes no limits to its authority and strives to regulate all aspects of public and private life.

______ refers to a political system that values the needs of society over that of an individual. Monarchy Collectivism Plutocracy Individualism

Collectivism

Nations adopting the pure form of democracy would foster political repression and a planned economy. assign a governing body to oversee economic matters. directly involve citizens in the decision making of the country. deny civil liberties to citizens.

directly involve citizens in the decision making of the country.

Karl Marx would agree that _____. in a capitalist society, many people benefit at the expense of a few capitalists take the value created by workers for their own use individual capitalists rather than state-owned enterprises benefit the society as a whole state-owned enterprises pay workers lower wages

capitalists take the value created by workers for their own use

Which characteristic is typical within a totalitarian country? There is no questioning of the ruler's decisions. The leaders have limited terms in office. There are no restrictions on media. An individual is given the right to freedom of expression.

There is no questioning of the ruler's decisions.

In the early 20th century, communists differed from social democrats in that communists believed in establishment of a non-totalitarian society. encouraging individual freedom. commitment to democratic means. a strategy of revolutionary action.

a strategy of revolutionary action

In a pure ______ economy, all productive activities are owned privately—not by the state. command planned mixed market

market

In the last half of the twentieth century, Britain's Conservative Party sold state-owned enterprises to individual investors in order to create a free market economy. What process was Britain using to create this economy? Isolationism Federalism Totalitarianism Privatization

Privatization

In a command economy, businesses are owned by _____. individuals foreign investors the state conglomerates

the state

______ refers to a political system in which the citizens exercise power directly or elect representatives to form a governing body. Oligarchy Totalitarianism Democracy Monarchy

Democracy

Companies wishing to pursue business opportunities in Sweden would find that while some industries are privately owned, others are state-controlled. What type of economy does this represent? Free Pure market Pure command Mixed

Mixed

In a(n) ______ democracy, elected individuals represent the citizens and make decisions on behalf of the electorate. totalitarianism representative elite common

representative

Unlike the economic system of a country, the legal system is NOT influenced by the prevailing political system. True false question. True False

False

In a country governed by a totalitarian system, you would find that free and fair elections are conducted regularly. basic civil liberties are denied to citizens. the country has a nonpolitical armed service. state bureaucracy is not influenced by politics.

basic civil liberties are denied to citizens.

A country that bases its laws on the traditions within the country's legal history operates under a _____ law legal system. civil common tribal

common

The production of goods in a pure market economy is determined by state-owned institutions. the political system. the collective good. supply and demand.

supply and demand.

What is the objective of a pure command economy? Abolition of state ownership Allotment of resources for the overall good of society Privatization of state-owned enterprises Diversification of private-sector enterprises

Allotment of resources for the overall good of society

A(n) ______ is a document that specifies the conditions under which an exchange is to occur, detailing the rights and obligations of the involved parties. bill of lading invoice contract subpoena

contract

In a ______ economy, both private enterprise and state ownership co-exist. mixed planned market command

mixed

______ rights determine how a resource or economic good is owned and used. Theocratic Common law Property Intellectual

Property

The __________ system of a country refers to the rules, or laws that regulate behavior along with the system that enforces them. legal political civil contract

legal

Select the accurate description of a common law system. Multiple choice question. A common law system does not allow existing laws to be amended. A common law framework tends to be much shorter and less specific than a civil law system. A common law system has a degree of flexibility that other legal systems lack. Judges in a common law system have the power only to apply the law but not interpret it.

A common law system has a degree of flexibility that other legal systems lack.

Jenner is obtaining a patent for the new diet drink formulation he created. He hopes that Coca Cola and other companies will be interested in licensing his formula. Jenner is protecting his _____ property with the patent. theocratic intellectual common civil

intellectual

In a pure ______ economy, all productive activities are owned privately—not by the state. market planned command mixed

market

Millie, a research associate at an information technology firm, develops a program that allows more than six parties to interface at the same time. In order to prevent the competition from duplicating her invention, the company should apply for a patent. watermark. trademark. copyright.

patent.

______ law is the body of law that governs the written agreements specifying the conditions under which an exchange is to occur. Contract Theocratic Civil Tribal

Contract

______ set certain safety standards to which a manufactured good must meet. Private action Product safety laws Public action Intellectual property laws

Product safety laws

Which of the following are ways in which property rights can be violated? Through foreign direct investment Through religious intent Through public action Through private action

Through public action Through private action

Even though there are many state-owned businesses in China, many Western businesses feel that they should still invest in the country because ______. the central planning board encourages foreign investment in domestic industries the nation is moving toward a market-based system it has a weak economy that is easy to infiltrate a planned economy disallows monopolies

the nation is moving toward a market-based system

A ______ grants an inventor exclusive rights for a defined period to the manufacture, use, or sale of his or her invention. trademark copyright patent watermark

patent

Several years ago, a customer brought a lawsuit against McDonald's because the coffee she purchased at the drive-thru window was hot when she spilled it on herself in her car. This lawsuit was based on _____. product liability facilitating payments public action criminal intent

product liability

A common complaint among those pushing back against globalization is that trade in services has not grown substantially. the lower 10 percent of the population in developed countries benefit the most. the benefits of trade historically go mainly to China. the benefits of globalization are not evenly distributed among socioeconomic classes. the benefits of trade are limited to electronics and consumer goods.

the benefits of globalization are not evenly distributed among socioeconomic classes.

A major factor contributing to the fraying of globalization since 2008 is more restrictions on the international movement of currencies. historically low unemployment rates. more regulations limiting credit. lower housing prices in the United States and Great Britain. the easy availability of credit in developed countries.

more regulations limiting credit.

The commercial jet aircraft market implies that to effectively engage in trade, a company must be a large multinational. can best be described as a global market. reflects the need for domestic competition to spur innovation. indicates that national markets in consumer goods are now homogenous. suggests that national economies are largely self-sufficient.

can best be described as a global market.

Boeing produced just 5 percent of its original 737s and 747s outside the United States but produces 65 percent of its newer 787s in foreign locations. Boeing’s production strategy indicates the presence of trade barriers in the United States. implies that outsourcing services is virtually impossible. suggests falling raw material costs require international production. reflects the globalization of production. suggests that Boeing has lost its edge in product design.

reflects the globalization of production.

Which best describes what takes place when a Chinese supplier of bicycle parts exports bike seats to Detroit Bikes? international trade moore’s Law foreign direct investment the General Agreement on Trade and Tariffs globalization

international trade

How can Venezuela’s economic system best be described during Hugo Chavez’s years as president? Multiple Choice mixed totalitarian socialist Incorrect command market

mixed

Using the information on political economy in your text and the case above, how would you characterize Venezuela’s political economy under President Nicolas Maduro? Multiple Choice Pure command economy Pseudo-democracy Totalitarian state Dictatorship Pure market economy

Pseudo-democracy

Based on the information on political economy in the text and the case on Venezuela above, which statement best characterizes the situation in Venezuela? Multiple Choice Bribery is likely to be fairly low as a result of the authoritarian state. Greater privatization should be expected in the short term. The country is very closer to true dictatorship. Further nationalization of business should not be expected. There is probably a high level of corruption within the government.

There is probably a high level of corruption within the government.

China’s state-owned enterprises reflect the commitment of China to democratic ideals. have largely been replaced across all sectors with privately held companies. are an indication of its thriving market economy. are less productive than its private sector businesses. are primarily limited to the information technology sector.

are less productive than its private sector businesses.

Venezuela’s economic system can best be described as a command economy. mixed economy. democracy. market economy. pseudo-economy.

mixed economy.

For companies, Venezuela Multiple Choice has a large and underserved market and warrants significant investment. would only be an option if an agreement could be reached with top government officials. is competitively less risky and warrants a closer look. is an ethical destination for business as long as the company chooses to avoid corrupt officials. would likely be considered a highly risky destination for doing business.

would likely be considered a highly risky destination for doing business.

An individual’s right to do something may be restricted on the grounds that it runs counter to “the good of society” when the political system emphasizes Multiple Choice collectivism. democracy. individualism. capitalism. privatization.

collectivism.

Communists believed that socialism could only be achieved through Multiple Choice state-owned enterprises. totalitarian dictatorship. the free flow of goods. democratic principles. a mixed economy.

totalitarian dictatorship