Global Studies Multiple Choice Questions.
1. (T/F) Critics charge that globalization and international outsourcing exploit workers in low wage nations.
Answer: True
2. (T/F) Globalization creates new risks and accentuates old ones for companies because it exposes them to new threats as well as to new opportunities.
Answer: True
3. (T/F) One remarkable commonality among the world’s least global nations is their low levels of corruption.
Answer: False, this is because some world’s least global nations are less corrupt, for example, Denmark, New Zealand and Finland. Other world’s least global nations such as Somalia. North Korea and Sudan are very corrupt
4. (T/F) Technology makes the world market more accessible for companies that sell traditional products by lessening the cost and difficulties associated with global communication.
Answer: True
5. (T/F) a business that has direct investments abroad in multiple countries is called a multinational corporation (MNC).
Answer: True
6. (T/F) A Company that sells a global product can explore opportunities abroad if the home market is small or becomes saturated.
Answer: True
7. (T/F) although studies tend to conclude that global inequality has risen in recent decades, they differ on the extent of the rise in global poverty.
Answer: False
8. (T/F) although multinational corporations are economically very powerful, the revenue of the world’s largest business is still far below the gross domestic product of the smallest nation.
Answer: False
9. (T/F) A country’s economic system consists of the structure and processes it uses to allocate its resources and conduct its commercial activities.
Answer: True
10. (T/F) Like privatized companies, government owned companies seldom produce competitive products at fair prices.
Answer: False
11. (T/F) In China, the practice of guanxi is used to improve social welfare.
Answer: False
12. (T/F) a smoothly functioning market economy rests on a legal system that safeguards individual property rights.
Answer: True
13. (T/F) Guanxi is the Chinese term for “personal relationships.”
Answer: True
14. (T/F) when we combine newly industrialized countries with those countries that have the potential to become newly industrialized, we arrive at a category often called developed countries.
Answer: False
15. (T/F) The trade theory that nations should accumulate financial wealth, usually in the form of gold, by encouraging imports and discouraging exports is called mercantilism.
Answer: False
16. (T/F) The United States is central Europe’s mightiest trading partner.
Answer: False
17. (T/F) Trade dependency, once a blessing for Mexico, is now causing economic disruption as some companies shift jobs out of the country to places such as China.
Answer: True
18. (T/F) The highly competitive nature of Asian business means that the use of cold calling to make direct contact with other companies is a common and successful business practice.
Answer: False
19. (T/F) the theories of comparative and absolute advantage assume that countries are driven only by the maximization of production and consumption.
Answer: True
20. (T/F) Adam Smith developed the theory of comparative advantage in 1776.
Answer: False
21. (T/F) in mercantilism, trade deficits were highly encouraged.
Answer: False
22. (T/F) The main disadvantage of protection from import competition is the added cost of continuing to produce a good or service that could be supplied more efficiently by an international supplier.
Answer: True
23. (T/F) a tariff levied by the government of a country that a product is passing through on its way to its final destination is called an import tariff.
Answer: False
24. (T/F) Government intervention in the trade of goods and services is a recent phenomenon.
Answer: False
25. (T/F) Industries considered essential to national security often receive government-sponsored protection.
Answer: True
26. (T/F) Legitimate national security reasons for intervention can be difficult to argue against, particularly when they have the support of most of a country’s people.
Answer: True
27. (T/F) Receiving financing from government agencies is often crucial to the success of small
Businesses just beginning to export.
Answer: True
28. (T/F) When countries try to maintain a trade surplus and expand their national treasuries at the
Expense of other nations, they are accused of practicing neomercantilism.
Answer: True
29. Three main goals of the __ World Trade Organization (WTO) ______ are to help the free flow of trade, help negotiate the further opening of markets, and settle trade disputes between its members.
Answer: World Trade Organization (WTO)
30. The first age of globalization was abruptly halted by the arrival of the ________.
31. In this current age of globalization, companies are ________ earlier and ________ faster, often with help from technology.
32. Fiscal policies deal directly with ________.
Answer: taxation and government spending
33. In most failed centrally planned economies, ________.
Answer: central planning agencies specified production goals and decided prices
34. The broadest measure of economic development is ________.
Answer: gross national product (GNP)
35. Which of these measures the extent to which a government satisfies its people’s needs?
Answer: Human development index
36. Supply and demand in a market economy are dictated by what is called ________.
Answer: the price mechanism
37. In a market economy, ________ allows most prices to rise and fall to reflect the forces of supply and demand.
38. Comparative advantage theory focuses on which of the following?
Answer: Productivity
39. Merchandise trade between low and middle-income nations accounts for about ________ percent of total world trade.
Answer: 6
40. Trade unions claim that by permitting international firms to continually move to nations with relatively lower labor standards, globalization ________ labor’s bargaining power and forces overall labor standards ________.
Answer: reduces; Lower
41. Nearly ________ percent of Western Europe’s exports are destined for other nations in Western Europe.
Answer: 75
42. Transactions solely between subsidiaries of international companies account for about ________ of U.S. exports and ________ of the U.S. imports.
Answer: one third; Two fifths
43. A ________ tariff is levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit.
Answer: compound
44. Which of the following is an economic motive for nations’ attempts to influence international trade?
Answer: Pursue strategic trade policy
45. A common purpose of many companies’ facilities in foreign trade zones is ________.
Answer: final product assembly
46. Tariffs can be classified into all of the following categories EXCEPT ________.
47. Financial assistance to domestic producers in the form of cash payments, low interest loans, tax breaks, or product price supports is called a (n) ________.
Answer: subsidy
48. Globalization is the trend characterized by ________ (national boundaries becoming less relevant), and is different from ________ (entities cooperating across national boundaries).
Answer: denationalization; Internationalization
49. Tariff quotas are used extensively in the trade of ________.
50. Land, factories and other economic resources are more equally split between private and government ownership in which of these systems?
Answer: Mixed economy
References
Mankiw, N. G. (2014). Principles of Macroeconomics. Boston: Cengage Learning.