Test bank for computing essentials 2011 making IT work for you 21st edition by OLeary

AACSB: Analytic BT: Knowledge Difficulty: Easy Learning Objective: 1-1 Topic: The Emergence of Global Institutions 54?. The World Trade Organization AACSB: Analytic BT: Knowledge Difficu

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True / False Questions

1. (p 7) Globalization refers to the shift toward a more integrated and interdependent world economy

Topic: What Is Globalization?

2. (p 7) Tastes and preferences of consumers in different nations are beginning to converge on some global norm

3. (p 7) A company has to be a major multinational corporation to facilitate, and benefit from, the globalization of markets

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4. (p 7) In Germany, 98 percent of small and midsize companies have exposure to international markets

5. (p 8) Currently, the most global of markets are for industrial goods and materials that serve a universal need the world over

6. (p 8) As firms follow each other around the world, greater diversity replaces uniformity

7. (p 10) 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

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8. (p 10) GATT stands for the General Agreement on Tariffs and Trade

Topic: The Emergence of Global Institutions

9. (p 10) As of 2008, 149 nations, which collectively accounted for 90 percent of world trade, were WTO members

10. (p 11) The United Nations and the World Bank were both created in 1944 by 44 nations that met at Breton Woods, New Hampshire

11. (p 11) The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil

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12. (p 12) After World War I, the advanced nations of the West committed themselves to removing barriers to the free flow of goods, services, and capital between nations

Topic: Drivers of Globalization

13. (p 12) In addition to reducing trade barriers, many countries have also been progressively removing restrictions to foreign direct investment

14. (p 13) Since the mid-1980s, the value of international trade in services has been decreasing compared to trade in production

15. (p 13) The volume of world output has grown faster than the volume of world merchandise trade since the 1950s, according to data from the World Trade Organization

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16. (p 14-15) Moore's Law predicts that the power of microprocessor technology doubles and its cost of production declines in half every 18 months

17. (p 15) By 2007, the Internet had more than 3 billion users, or about 25% of the world's population

18. (p 16) As transportation costs associated with the globalization of production decline, dispersal of production to geographically separate locations becomes more economical

19. (p 16) Favorable politics has been a major force in facilitating international trade in

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20. (p 17) In any society, the media are primary conveyors of culture

21. (p 17) The dominance of mini-multinational U.S firms on the international business scene

is one of the changing trends of globalization

Topic: The Changing Demographics of the Global Economy

22. (p 17) In 1963, the United States accounted for 50.2 percent of world output

23. (p 18) Most forecasts now predict a rapid rise in world output accounted for by developing nations such as China, India, and South Korea, and a rapid decline in the share enjoyed by rich industrialized countries such as Britain and the United States

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24. (p 20) In the 1970s, European and Japanese firms began to shift labor-intensive

manufacturing operations from their home markets to developing nations where labor costs were lower

25. (p 20) The stock of foreign direct investment refers to the total cumulative value of foreign investments in a country

26. (p 21) A slump in foreign direct investment into developed nations from 1998 to 2000 was followed by a surge in 2001 to 2003

27. (p 21) In the 1960s, global business activity was dominated by large Japanese multinational corporations

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28. (p 22) By 2005, the largest 50 multinationals from developing economies had foreign sales

of $323 billion out of a total of $738 billion and employed 1.1 million people outside of their home countries

29. (p 24) Many of the former Communist nations of Europe and Asia seem to share a

commitment to democratic policies and free market economies

30. (p 24) Changes in China are creating both opportunities and threats for established

31. (p 26) Economists argue that despite the many benefits to globalization, an increase in international trade and cross-border investments will result in higher prices for goods and services

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32. (p 27) One concern of globalization opponents is that falling barriers to international trade may destroy manufacturing jobs in wealthy advanced economies such as the United States

Topic: The Globalization Debate

33. (p 31) Free trade agreements such as NAFTA increase pollution and result in firms from advanced nations exploiting the labor of less developed nations

34. (p 32) One concern of globalization opponents is that it undermines the sovereignty of international organizations and promotes the sovereignty of individual nation-states

35. (p 33) Due to benefits associated with free trade and investment, gap between the rich and poor nations of the world has reduced

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36. (p 34) Free trade alone is a sufficient prerequisite to help HIPC countries bootstrap

themselves out of poverty

37. (p 35) The World Trade Organization has estimated that if developed nations eradicated subsidies to their agricultural producers, it would raise global economic welfare by $128 billion

38. (p 35) To conduct international business, a multinational enterprise has to invest directly in operations of other countries

Topic: Managing in the Global Marketplace

39. (p 35) Despite all the talk about the emerging global village, differences between countries such as cultures and political systems are profound and enduring

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40. (p 36) The range of problems confronted by a manager in an international business is wider and the problems themselves more complex than those confronted by a manager in a domesticbusiness

Topic: Managing in the Global Marketplace

Multiple Choice Questions

41. (p 7) The trend from distinct national economic units and toward one huge global market is commonly referred to as:

42. (p 7) The merging of historically distinct and separate national markets into one huge global marketplace is referred to as the:

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43. (p 7) What percentage of exporting firms, in the United States in 2001, were small

businesses that employed less than 100 people?

44. (p 7) Automobile companies promote different car models depending on a range of factors such as local fuel costs, income levels, traffic congestion, and cultural values This

demonstrates that:

A national markets are not giving way to the global market.

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

Learning Objective: 1-1

45. (p 8) The most global of markets are in which area?

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46. (p 8) Globalization results in a greater degree of _ across markets than would be present otherwise

47. (p 8) The globalization of _ refers to the sourcing of goods and services from locationsaround the globe to take advantage of national differences in the cost and quality of factors of production

48. (p 8) In producing its electronics products, Sony Corporation sources goods and services from different locations around the globe in an attempt to take advantage of national

differences in the cost and quality of factors of production This practice is made possible by the globalization of:

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49. (p 8) Although Boeing is incorporated in the United States, a supplier in Singapore makes the doors for the nose landing gear, and suppliers in Italy manufacture wing flaps Boeing is taking part in:

50. (p 8) A software company that uses Indian engineers to perform maintenance functions on software designed in the United States is benefiting from:

51. (p 8-9) Although outsourcing has been primarily confined to _, increasingly companies are taking advantage of outsourcing for:

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52. (p 9-10) Why do many U.S companies use Indian software engineers to perform

maintenance functions?

A It compresses the time and lowers the costs required to develop new software programs.

secure stability and growth

AACSB: Reflective thinking

BT: Comprehension

Difficulty: Medium

53. (p 10) An international treaty that committed signatories to lowering barriers to the free flow of goods across national borders is called:

D the General Agreement on Tariffs and Trade.

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

54. (p 10) How has the WTO helped globalization of markets and production?

economic growth

C It sought to create a more open global business system unencumbered by barriers to trade

and investment between countries

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55. (p 10) As of 2008, which global institute has 151 nations as its members?

C The World Trade Organization

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

56. (p 11) Why was the World Bank created?

B To promote economic development.

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

57. (p 11) What is the purpose of the IMF?

A To maintain order in the international monetary system.

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58. (p 11) Why is the IMF seen as the lender of last resort to nation-states whose economies are

in turmoil?

1 It lowers barriers to the free flow of goods across national borders

2 It creates a more open global business system unencumbered by barriers to trade and investment between countries

3 By telling national governments what economic policies they must adopt, it usurps the sovereignty of nation-states

4 It makes low-interest loans to cash-strapped governments in poor nations that wish to undertake significant infrastructure investments

BT: Comprehension

Multiple Choice Questions

59. (p 11) As the IMF is seen as the lender of the last resort to nation-states whose economies are in turmoil, all of the following countries received monetary assistance from the IMF in thelast decade EXCEPT:

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60. (p 11) Which organization was established to preserve peace through international

cooperation and collective security?

D The United Nations

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

61. (p 11) When was the United Nations established?

62. (p 11) Which of the following IS NOT a purpose of the UN?

D Provide developing countries with financial support

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63. (p 11) Which are the two macro factors that seem to underlie the trend toward greater globalization?

from foreign competition

D The decline in barriers to the free flow of goods, services, and capital that has occurred,

and increased technological change

BT: Comprehension

64. (p 11) Which of the following technological developments did NOT dramatically enhance globalization?

B Developments in agriculture technologies

BT: Comprehension

65. (p 12) Which of the following refers to the exporting of goods or services to consumers in another country?

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66. (p 12) Cisco Systems exports a number of products to consumers in other countries This practice is referred to as:

67. (p 12) Although Gillette is an American company, it has invested substantial business resources in activities outside the United States This practice is referred to as:

68. (p 12) The investing of resources in business activities outside a firm's home country is referred to as:

D foreign direct investment.

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69. (p 12) Which of the following is a treaty designed to remove barriers to the free flow of goods, services, and capital between nations?

C General Agreement on Tariffs and Trade

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

70. (p 12) Barriers to international trade are said to have contributed to:

C the Great Depression.

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

71. (p 12) Which of the following was NOT an outcome of the Uruguay Round of the GATT?

A Enforced high tariffs on imports of manufactured goods.

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72. (p 12) Which of the following agencies was established at the 1993 Uruguay Round?

D World Trade Organization

AACSB: Analytic

BT: Knowledge

Difficulty: Easy

73. (p 12) In 2001, the WTO launched a new round of talks aimed at further liberalizing the global trade and investment framework It was held at:

74. (p 12) What is the agenda of the Doha round of talks?

A Limit the use of antidumping laws.

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75. (p 12) Which of the following would be the biggest gain for poor countries from the ongoing Doha talks?

B Reduction of tariff on agricultural products.

BT: Comprehension

76. (p 12-13) Approximately 90 percent of the changes that countries have made pertaining to foreign direct investment regulations have:

B made it easier for foreign companies to enter their markets.

BT: Comprehension

77. (p 13) Between 1980 and 2006, the number of bilateral investment treaties has:

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78. (p 13) As of 2006, _ bilateral treaties involved more than 160 countries to facilitate FDI

79. (p 13) How does the lowering of barriers to international trade help firms?

B It allows them to view the world as their market.

BT: Comprehension

80. (p 13) Which of the following statements is consistent with data from the World Trade Organization?

A The volume of world trade has grown faster than the volume of world output since the

1950s

time

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