International Management

1 1. The trend toward a more integrated and interdependent global economic system that has been in place for many years is commonly referred to as:    A.  market standardization B.  cross-border integration C.  globalization D.  consumerism E.  nationalization   2. The two of the three main components of globalization are:    A.  the globalization of markets and the globalization of production B.  the globalization of production and the globalization of finance C.  the standardization of technology and the globalization of markets D.  the globalization of finance and the globalization of accounting E.  the globalization of consumers and the globalization of marketing   3. Sourcing goods and services from locations around the globe is known as __________.    A.  melding of markets B.  integration of markets C.  deregulation D.  globalization of production E.  globalization of markets   4. The global dispersal of productive activities is:    A.  limited to large firms only B.  limited to medium firms only C.  limited to small firms only D.  limited to large and medium firms E.  found in all sized firms   5. The most global of markets is in what area?    A.  services B.  consumer goods C.  industrial goods D.  intellectual capital E.  entertainment   6. The most global of markets are not markets for __________, where national differences in tastes and preferences are still often important enough to act as a break on globalization.    A.  services B.  consumer goods C.  staples D.  insurance and banking E.  industrial goods   7. Examples of _______ include Coca-Cola and Pepsi, Ford and Toyota, Bombardier and Embraer, and Caterpillar and Komatsu.    A.  service goods B.  international brands C.  homogeneous products D.  global competition E.  market integration   8. Globalization results in a greater degree of __________ across markets than would be present otherwise.    A.  diversification B.  diversity C.  homogeneity D.  heterogeneity E.  uniformity   9. The globalization of __________ refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labour, energy, land, and capital).    A.  information technology B.  process design C.  markets D.  production E.  R&D   10. The _______ was created in 1944 by 44 nations that met in Breton Woods, New Hampshire.    A.  International bank B.  World Monetary Fund C.  World Trade Organization D.  International Monetary Fund E.  United Nations   11. In producing its products, Bombardier 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:    A.  finance B.  production C.  markets D.  process design E.  consumer demand   12. According to the text, the propensity of firms to outsource many of their productive activities to different suppliers around the world has resulted in the creation of __________ products.    A.  multi-domestic B.  cross-national C.  global D.  cross-cultural E.  transborder   13. The _______ is seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations.    A.  International Monetary Fund B.  International bank C.  United Nations D.  Canada's Export Development Corporation E.  Bank of Canada   14. _______ are the two macro factors that seem to underlie the trend toward greater globalization.    A.  The increase in global economic stability, and the slowdown in technological change B.  The increase in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and global economic stability C.  The decline in barriers to the free flow of goods, services, and capital that has occurred in the past 10 years, and the slowdown in technological change D.  The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and technological change E.  Technological Change and the convergence of global product preferences   15. With membership of 192 countries, the _______________ was established to preserve peace through international cooperation and collective security.    A.  World Monetary Fund B.  The International Monetary Fund C.  International bank D.  United Nations E.  NATO   16. Matrikon exports a number of products to users in other countries. This practice is referred to as __________.    A.  world exchange B.  international trade C.  cross-national barter D.  situational commerce E.  multinational diversification   17. XYZ, Inc. is an auto parts distributing warehouse that exports many of its products to consumers in other countries. XYZ Inc. can be described as engaging in:    A.  international trade. B.  cross-border investments. C.  product development. D.  trading barriers. E.  international procurement.   18. Which of the following refers to the exporting of goods or services to consumers in another country?    A.  situational commerce B.  world exchange C.  international trade D.  cross-national barter E.  foreign investment   19. Although Inco is a Canadian company, it has invested substantial business resources in activities outside Canada. This practice is referred to as:    A.  transnational commerce B.  foreign direct investment C.  international trade D.  organizational diversification E.  outsourcing   20. The investing of resources in business activities outside a firm's home country is referred to as:    A.  international trade B.  domestic direct investment C.  transnational barter D.  foreign direct investment E.  outsourcing   21. The __________ is a treaty designed to remove barriers to the free flow of goods, services, and capital between nations.    A.  Global Agreement on Tariffs and Commerce B.  United Nations Treaty on Trade C.  General Agreement on Tariffs and Trade D.  Multi-National Agreement on Tariffs and Commerce E.  The ILO   22. Under the umbrella of GATT there have been eight rounds of negotiations among member states. The _______ was the most recent round of negotiations.    A.  Uruguay Round B.  Malaysian Symposium C.  German Round D.  New Zealand Symposium E.  Cancun Round   23. Which of the following was not an outcome of the Uruguay Round of the GATT?    A.  reduced trade barriers B.  extended GATT to cover services as well as manufactured goods C.  established the World Trade Organization D.  provided extended protection for patents, trademarks, and copyrights E.  reduced agricultural subsidies   24. The acronym GATT stands for:    A.  Global Agreement on Taxation and Tariffs B.  Global Association of Technology and Trade C.  General Agreement on Taxation and Trademarks D.  General Agreement on Tariffs and Trade E.  General Accord of Transportation and Trade   25. The agency established at the 1993 Uruguay Round to police the international trading system is the __________.    A.  Global Trade Enforcement Administration B.  World Tariff and Trade Bureau C.  International Trade Enforcement Agency D.  World Trade Organization E.  The European bank of Reconstruction and Development   26. Suppose Petro Canada, an international oil company, had a complaint about a trade issue. The __________, a governing body established at the Uruguay Round in 1993 to police the international trading system, is an organization that Petro Canada could take its complaint to.    A.  World Trade Organization B.  International Trade Monitoring Bureau C.  World Tariff and Trade Agency D.  International Trade Monitoring Agency E.  The United Nations   27. The acronym WTO stands for:    A.  Western Trade Organization B.  World Tax Organization C.  World Trade Organization D.  World Tariff Organization E.  World Trade Operations   28. Average tariff rates have ______________ since 1950.    A.  risen B.  fallen C.  stayed the same D.  risen then fallen E.  fallen then risen   29. Many of the changes that countries have made pertaining to foreign direct investment regulations have:    A.  made it harder for foreign companies to enter their markets B.  made it easier for foreign companies to enter their markets C.  had no effect on the ease upon which foreign companies can enter their markets D.  made it easier to foreign producers of raw materials to enter their markets but more difficult for foreign producers of finished products to enter their markets E.  prevented the expropriation of business assets by a foreign government   30. 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. B.  the volume of world trade has grown slower than the volume of world output since the 1950s. C.  the volume of world trade and the volume of world output have grown at approximately the same rate since the 1950s. D.  the volume of world trade and the volume of world output have remained constant since the 1950s. E.  the volume of world trade is inversely related to the growth of world output.   31. According to your text, between 1950 to 2000, as world trade expanded by 20 times, world output grew by about _______.    A.  12 percent B.  1 percent C.  25 percent D.  6 ½ times E.  20 times   32. The average yearly outflow of FDI increased from about $14 billion in 1970 to a record of _______________ in 2007, though it has fallen more recently.    A.  $550 billion B.  $73 billion C.  $1.73 trillion D.  $2.75 trillion E.  $11.8 trillion   33. The lowering of trade barriers to international trade has    A.  enabled firms to approach the world as their market B.  enabled firms to be a domestic company in their home country. C.  decreased the volume of production. D.  created an increase of diverse partnerships. E.  encouraged firms to retrench in their home markets.   34. Between 1990 and 2000, the total flow of FDI from all countries increase by about _______?    A.  2 times B.  3 times C.  4 times D.  5 times E.  6 times   35. The globalization of markets, the growth of world trade, and the increase in FDI has had what effect? ______________.    A.  a decrease in production B.  a decrease in world trade C.  companies find their home markets under attack from foreign competitors D.  companies are reducing their profits E.  companies are during to protectionist measures   36. Evidence suggests that FDI is playing a(n):    A.  decreasing role in the world economy B.  increasing role in the world economy for services but a decreasing role in the world economy for manufactured goods C.  increasing role in the world economy for manufactured goods but a decreasing role in the world economy for services D.  increasing role in the world economy E.  a limited role in the world economy   37. Which of the following is a major cause for lowering the trade barriers of markets and production?    A.  Technological change B.  Increased labour mobility C.  Elastic demand D.  Corporate greed E.  Consumer demand   38. According to our textbook, the growing integration of the world economy is:    A.  increasing the intensity of competition within the home market of a company in a wide range of manufacturing and service industries B.  decreasing the intensity of global competition in manufacturing industries, and increasing the intensity of domestic competition in services C.  increasing the intensity of global competition in manufacturing industries, and decreasing the intensity of domestic competition in services D.  narrowing the scope of global competition in a wide range of service, commodity, and manufacturing industries E.  Widening the opportunities for competing with manufacturing companies within their home market and narrowing the opportunities for competing with service companies in their home market.   39. According to our textbook, the single most important technological innovation has been the development of the __________.    A.  telegraph B.  microprocessor C.  ocean container D.  airplane E.  telephone   40. _______ is the theory that predicts that the power of microprocessor technology doubles and the cost of production falls every 18 months.    A.  Brennan's Theorem B.  Bailey's Law C.  Moore's Law D.  Ivan's Law E.  Global Micro Accelerant (GMA) Law   41. According to your textbook, between 1930 and 1990, the cost of a three-minute phone call between New York and London fell from $244.65 to $3.32. This decrease can be mainly contributed to    A.  open communication between governments. B.  the advent of the microprocessor. C.  continuing efforts to globalize. D.  high corporate ethical standards. E.  the deregulation of the telecommunications industry   42. As of September 2009 there are over _______ million Internet users in Canada.    A.  230 B.  458 C.  59 D.  25 E.  19   43. According to our textbook, by the year 2007 online sales hit almost ____________ in Canada.    A.  $1 billion B.  $16 billion C.  $63 billion D.  $350 million E.  $591 million   44. The greatest current potential of the Web seems to be in the ____________ arena.    A.  business-to-business B.  consumer-to-business C.  consumer-to-consumer D.  business-to-consumer E.  business-to-government   45. _______ was not mentioned in our textbook as major innovation in transportation technology.    A.  Commercial jet aircraft B.  Super freighters C.  E-commerce D.  The introduction of containerization E.  Both containerization and e-commerce were not mentioned   46. Due to containerization, the transportation costs associated with the globalization of production have:    A.  remained the same B.  increased dramatically C.  declined D.  increased slightly E.  reduced insurance costs   47. As a result of a variety of innovations, the real costs of information processing and communication have __________ over the past two decades.    A.  fallen slightly B.  increased slightly C.  remained constant D.  fallen dramatically E.  had no impact on the cost of international business   48. Although the characteristics of the global economy have changed dramatically over the past 50 years, as late as the 1960s all of the following demographic characteristics were true except:    A.  the U.S. dominated the world economy B.  small, U.S. entrepreneurial firms dominated the international business scene C.  the U.S. dominated the world foreign direct investment picture D.  the U.S. was the world's largest industrial power E.  the U.S. dominated world trade   49. Which country was the world's most dominant industry power was in the early 1960s?    A.  Japan B.  The United Kingdom C.  Germany D.  The United States E.  Canada   50. In 1963, the U.S. accounted for _________ percent of world manufacturing output.    A.  80.0 B.  12.8 C.  65.6 D.  40.3 E.  24.6   51. In recent years, all of the following countries have seen their relative share of world output fall except:    A.  United States B.  France C.  Germany D.  China E.  Japan   52. In 2007, the U.S.'s largest trade partner was ___________________.    A.  United Kingdom B.  Mexico C.  China D.  Canada E.  South Korea   53. Which of the following had the greatest share of the world's exports in 2006 from greatest to least?    A.  United States, Japan, China B.  Japan, Germany, United States C.  United States, Germany, Canada D.  China, United States, Japan E.  United States, France, China   54. As of 2006, _______ was the world's largest exporter.    A.  the United States B.  China C.  Japan D.  Germany E.  France   55. If we look into the future, most forecasts now predict a __________ in world output accounted for by developing nations such as China, India, Indonesia, and South Korea, and a __________ in the share enjoyed by rich industrialized countries such as Britain, Japan, and the United States.    A.  rapid rise; rapid decline B.  slight rise; slight decline C.  rapid decline; rapid rise D.  rapid rise; slight decline E.  stay the same; slight decline   56. The relative decline of the developed countries' share of world output _________________.    A.  will reduce the living standards of the citizens of developed countries. B.  will increase competition for scarce resources and create political instability. C.  reflects the growing economic and industrial strength of developing countries. D.  will decrease prices but also reduce wages in Canada E.  will decrease job opportunities in Canada   57. Which of the following is an example of a developing nation?    A.  Thailand B.  Britain C.  Japan D.  United States E.  Canada   58. According to your text, the World Bank estimates that today's developing nations may account for more than _______ percent of world economic activity by 2020.    A.  35 B.  50 C.  55 D.  65 E.  60   59. _______ is not considered to be a "developing" nation.    A.  Brazil B.  India C.  China D.  France E.  Mexico   60. The World Bank has estimated that if current trends continue and based on purchasing power parity, by 2020 the __________ economy could be larger than that of the United States.    A.  Russian B.  Chinese C.  Japanese D.  British E.  German   61. In the 1960s, the two countries with the largest share of world output were:    A.  United States and Japan B.  Britain and the United States C.  United States and Germany D.  Britain and Japan E.  United States and France   62. Between 2008-2009, Canada's imports from all countries.    A.  rose B.  stayed the same C.  fell D.  showed a different pattern to Canada's exports to all countries E.  fell then rose   63. The foreign direct investment by non-U.S. firms was motivated primarily by the following two factors:    A.  the desire to disperse production activities to optimal locations; and the desire to build a direct presence in major foreign markets B.  the desire to disperse production activities to optimal locations; and the desire to influence foreign exchange rates C.  the desire to influence foreign exchange rates; and the desire to influence political developments in foreign countries D.  the desire to build a direct presence in major foreign markets; and the desire to influence political developments in foreign countries E.  the desire to reduce dependence on the United States and to increase direct access to markets   64. In the 1960s, what was then seen as an economic threat to Europe?    A.  The dominance of U.S. firms B.  Technological innovations C.  Low-cost transportation D.  Low-cost global communication networks E.  Reduction in trade barriers   65. What is the total cumulative value of foreign investments is referred to as?    A.  accumulation of foreign direct investments B.  portfolio of foreign direct investments C.  stock of foreign direct investments D.  set of foreign direct investments E.  stock of foreign ownership   66. Between 2008-2009, FDI Inward Stock    A.  fell for all counties and regions B.  rose only in North America C.  rose in all areas D.  fell only in the European Union E.  fell only in the Developed economies   67. Reflecting the dominance of the United States in the global economy, U.S. firms accounted for _______________ percent of worldwide foreign direct investment flows in the 1960s.    A.  25.7 B.  34.6 C.  55.1 D.  66.3 E.  47.2   68. Since 2000s, the percentage of foreign direct investment inflows accounted for by developing countries has generally:    A.  decreased B.  never been determined C.  remained constant D.  increased E.  had no impact on their standard of living   69. Since the 1960s, what has been a notable trend regarding multinational enterprises?    A.  the decline of the multinational enterprise B.  the decline of the Canadian multinational enterprise C.  the rise of non-U.S. multinationals D.  the decline of the Japanese multinational enterprise E.  the rise of U.S. multinationals   70. What kind of enterprise is a business that has productive activities in two or more countries?    A.  cross-cultural B.  multinational C.  varied-national D.  diverse-national E.  multi-domestic   71. Recentlythere has been _______ in the number of multinationals from developing countries, especially when you look at smaller firms.    A.  a significant growth B.  no change C.  a significant decline D.  some growth E.  some decline   72. General Electric Corporation has productive activities in a number of countries. As a result, it would be appropriate to refer to General Electric as a __________ corporation.    A.  transnational B.  diverse-national C.  cross-national D.  multinational E.  global   73. IcecultureInc of Ontario emplyes 50 people and exports around the world. It would be considered a _______________    A.  a multinational company B.  a transnational company C.  a cross-border national company D.  a mini-multinational E.  a U.S. dominated company   74. Since the 1960s, there have been two notable trends in the demographics of the multinational enterprise. These two trends have been:    A.  the rise of non-U.S. multinationals and the disappearance of mini-multinationals B.  the decline of non-U.S. multinationals and the decline of mini-multinationals C.  the decline of non-U.S. multinationals and the growth of mini-multinationals D.  the rise of non-U.S. multinationals and the growth of mini-multinationals E.  the rise of U.S. multinationals and the growth of mini-multinationals   75. Disturbing signs of growing unrest and totalitarian tendencies continue to be seen in many _______ states.    A.  Western European B.  European C.  Northern European D.  Eastern European E.  South American states   76. The decline of the U.S. in its dominance of the global economy can be explained by two factors. These are:    A.  the globalization of the world economy and China's rise to the top rank of economic powers B.  the fall of communism in Eastern Europe and the republics of the former Soviet Union and Japan's rise to the top rank of economic powers C.  the globalization of the world economy and Japan's rise to the top rank of economic powers D.  a decrease in trade barriers worldwide and China's rise in economic power E.  the growth of democratic institutions in China   77. What are mini-multinationals?    A.  multinational firms from relatively small countries B.  multinational firms that have been involved in international business for less than five years C.  multinational firms that operate in three or less foreign countries D.  medium-sized and small multinationals E.  subsidiaries of multinationals   78. Carmanah Technologies, is a small firm of 105 people that operates in several different foreign countries. It would be appropriate to refer to Carmanah Technologiesas a:    A.  aspiring-multinational B.  mini-multinational C.  insignificant-multinational D.  emerging-multinational E.  domestic multinational   79. Many East European countries have joined the European Union and although _________________ their long term business prospects remain positive.    A.  The economies of most of the former Communist states are not very strong B.  Many of the former Communist nations of Europe and Asiado not share a commitment to free market economies C.  As a result of low wages, the risks involved in doing business in these countries is very high D.  For about half a century these countries were essentially opento Western international business E.  they are suffering from a labour shortage   80. Which of the following statements is not true regarding the majority of Latin American countries?    A.  governments are selling state-owned enterprises to private investors B.  foreign investment is welcome C.  debt and inflation are down D.  neither democracy nor free market reforms have seemed to take hold E.  None of these answers is correct   81. The last quarter of the 20th century experienced __________ in the global economy.    A.  increased stability B.  slow-moving C.  virtually no changes D.  rapid changes E.  great concerns over potential disruptions   82. Economists argue that increased international trade and cross-border investments will result in __________ prices for goods and services.    A.  higher B.  stable C.  lower D.  unstable E.  variable   83. _______ is not a benefit of globalization.    A.  Lowering prices for goods B.  Raising the incomes of consumers C.  Slowing economic growth D.  Helping to create jobs in all countries that choose to participate E.  More leisure time   84. Economists, politicians, and business leaders believe that the _______ to international trade and investment is the engine driving the global economy toward greater prosperity.    A.  falling barriers B.  cross-border investments C.  U.N. policies D.  trading barriers E.  NAFTA   85. One frequently voiced concern about globalization is that it destroys manufacturing jobs in wealthy advanced economies such as Canada. The basic thrust of the critics' argument is:    A.  developing nations will recruit employees from the more advanced economies, thereby depleting their labour pools B.  globalization increases the pace of the shift from a world economy based on manufactured goods to a world economy based on services C.  falling trade barriers allows firms to move their manufacturing activities offshore to countries where wage rates are much lower D.  the governments of developing countries will heavily subsidize their primary industries, making competing products produced in advanced economies less attractive E.  Canadian workers are overpaid and the true value of a manufacturing job is much lower   86. Outsourcing has even extended to the Canadian _______ industry.    A.  marketing B.  food C.  IT D.  publishing E.  teaching   87. Critics use the following argument to suggest that globalization is a contributing factor to an increase in pollution.    A.  globalization results in an increase in the amount of activity that takes place in companies that do not have adequate pollution controls B.  globalization results in increased commerce between countries, which results in an increase in the amount of transportation activity (e.g. trains, barges, air cargo, trucks, etc.) C.  firms that operate in countries that have adequate pollution regulations have a tendency to move their manufacturing operations to countries that have less stringent or no pollution controls to avoid the cost of regulation D.  globalization results in increased production, which has the undesirable side-effect of increased pollution E.  people in developing countries are used to coping with more pollution   88. According to IDC Canada, Canadian IT outsourcing reached _____________ in 2010.    A.  $50 million B.  $500 million C.  $1 billion D.  $5 billion E.  $15 billion   89. What does NAFTA stand for?    A.  North American Free Trade Agreement B.  North Atlantic Free Trade Agency C.  North American Federation of Trade Advocates D.  National Alliance for Technology Advancement E.  North American Federal Treaty Association   90. Many critics of globalization argue that outsourcing leads to increased use of _________ labour practices in developing countries.    A.  exploitive B.  fair C.  underground D.  neo-colonialist E.  non-competitive   91. What is the primary purpose of the World Trade Organization?    A.  arbitrate trade disputes B.  act as a "watchdog" for countries that lower their pollution standards in an effort to attract more foreign manufacturing activity C.  set tariffs for countries that signed the GATT agreement D.  monitor the implementation of trade agreements such as NAFTA E.  reduce the number of job losses in member countries   92. In what way can the World Trade Organization (WTO) penalize member countries that are found to be engaged in unfair trade practices?    A.  the WTO can impose sanctions on the transgressor B.  the WTO can bring the employees of offending companies to court C.  the WTO can restrict the membership of the offending country in other world organizations such as the United Nations D.  the WTO panel can issue a ruling instructing a member state to change trade policies that violate GATT regulations, and if the policies are not changed, allow other states to impose sanctions E.  expel the violating country from the WTO, which means that companies from that country will be charged higher tariffs on their exports   93. The WTO polices the world trading system established by __________.    A.  GATT B.  the UN C.  the U.S. D.  the Euro E.  NAFTA   94. Supranational organizations such as the WTO are criticized for    A.  interfering in the regulation of prices of a country's natural resources B.  ruling in favour of rich western countries at the expense of poor developing countries C.  focusing on economic freedom and not on democracy and environmental responsibility D.  limiting its actions to what the WTO member states agree to E.  encouraging economic stagnation in poor countries so that rich countries can grow faster   95. Managing an international business is different from managing a purely domestic business for all of the following reasons except:    A.  countries are different B.  international transactions involve converting money into different currencies C.  the range of problems confronted by a manager in an international business are narrower than those confronted by a manager in a domestic business D.  an international business must find ways to work within the limits imposed by government intervention in the international trade and investment system E.  different languages have to be learned   96. The world's poorest nations have also faced __________.    A.  standardization B.  alignment C.  global simplification D.  economic stagnation E.  consumerization   97. The global economy is moving progressively towards a world in which national economies are relatively isolated from each other.    True    False   98. The volume of goods, services and investment crossing national borders expanded faster than did world output every year during the last two decades of the 20th century.    True    False   99. Because of the global presence of widely accepted products like McDonalds, Coca-Cola, and Sony PlayStation, national markets are disappearing.    True    False   100. To benefit from the globalization of markets, a company has to be a multinational firm.    True    False   101. Currently the most global of markets are for industrial goods and materials that serve a universal need the world over.    True    False   102. Although many companies have lowered their overall cost structure and have improved the quality of their products by dispersing their production activities to locations around the world, this activity is confined primarily to large firms.    True    False   103. General Agreement on Tariffs and Trade is what the acronym GATT stands for.    True    False   104. As markets globalize and an increasing proportion of business activity transcends national borders, there is a need for institutions to help manage, regulate and police the global market place.    True    False   105. The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire.    True    False   106. The International Monetary Fund (IMF) is often seen as the leader of last resort to nation states whose economies are in economic turmoil.    True    False   107. In addition to reducing trade barriers, many countries have also been progressively removing restrictions on barriers to foreign direct investment.    True    False   108. The advanced nations of the East committed themselves after World War II to removing barriers to the free flow of goods, services, and capital between nations.    True    False   109. There is very little evidence that suggests that the lowering of trade barriers has facilitated the globalization of production.    True    False   110. The volume of world output has grown faster than the volume of world trade since the 1950s, according to data from the World Trade Organization.    True    False   111. Surprisingly, despite the importance of technology in our everyday lives, technological change has played only a minor role in the globalization of markets.    True    False   112. 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 Canada, Britain and the United States.    True    False   113. Many of tomorrow's economic opportunities may be found in the developing nations of the world.    True    False   114. The stock of foreign direct investment refers to the total cumulative value of foreign assets in a country.    True    False   115. In the 1960s global business activity was dominated by large Japanese multinational corporations.    True    False   116. Although most international trade and investment is still conducted by large firms, small to medium sized firms are increasingly involved in international trade and investment.    True    False   117. Economists argue that increased international trade and cross-border investments will result in higher prices for goods and services, although there are many benefits to globalization.    True    False   118. It is commonly believed that globalization stimulates economic growth, creates jobs, and raises income levels.    True    False   119. Any firm that engages in international trade or investment is an international business.    True    False   120. Describe the concept of globalization. What are the major opportunities and challenges that globalization has created for business organization?            121. Describe the two main facets of globalization. Explain how each of these components of globalization has helped create the shift towards a more integrated world economy.            122. Describe the meaning of the term "trade barriers"? What measures have been taken by the world community to reduce the impact of trade barriers on international trade?            123. Describe the impact of the development of the World Wide Web on global commerce?            124. Define the term "foreign direct investment (FDI)." How does the term "foreign direct investment" differ from the term "international trade?"            125. What is a multinational enterprise? What have been the two most notable trends in multinational enterprises since the 1960s? What is a mini-multinational? Do you expect the role of mini-multinationals to gain momentum or wane in the future? Why?            126. Discuss the primary advantages and disadvantages of globalization. Do you believe the advantages outweigh the disadvantages? How can the effects of the disadvantages of globalization be reduced?            127. Country competitiveness is not something that is permanent or fixed. The dominant features of the global economy are the rapid changes relative economic and competitive status of different countries. Canada is not immune to these changes. We have seen our total share of the global economy decrease and the loss of many industries. The anti-globalization movement has been active in Canada. In particular they have been critical of multinational corporate power and argued against global and regional agreements on economic growth and the lowering of trade barriers. Others feel that globalization is inevitable and contributes to the well being of people around the world. a. Consider the overall impact of globalization on Canada from the perspective of a software developer-has it been positive or negative? Explain your answer. b. What kinds of strategies could a Canadian developer of software employ to reduce the negative impacts and take advantage of the positive aspects? Explain your answer            128. Why is international trade important to Canada?            1 Key   1. (p. 7) The trend toward a more integrated and interdependent global economic system that has been in place for many years is commonly referred to as:    A.  market standardization B.  cross-border integration C.  globalization D.  consumerism E.  nationalization   Difficulty: Easy Hill - Chapter 01 #1   2. (p. 7) The two of the three main components of globalization are:    A.  the globalization of markets and the globalization of production B.  the globalization of production and the globalization of finance C.  the standardization of technology and the globalization of markets D.  the globalization of finance and the globalization of accounting E.  the globalization of consumers and the globalization of marketing   Difficulty: Medium Hill - Chapter 01 #2   3. (p. 8) Sourcing goods and services from locations around the globe is known as __________.    A.  melding of markets B.  integration of markets C.  deregulation D.  globalization of production E.  globalization of markets   Difficulty: Easy Hill - Chapter 01 #3   4. (p. 8) The global dispersal of productive activities is:    A.  limited to large firms only B.  limited to medium firms only C.  limited to small firms only D.  limited to large and medium firms E.  found in all sized firms   Difficulty: Hard Hill - Chapter 01 #4   5. (p. 8) The most global of markets is in what area?    A.  services B.  consumer goods C.  industrial goods D.  intellectual capital E.  entertainment   Difficulty: Hard Hill - Chapter 01 #5   6. (p. 8) The most global of markets are not markets for __________, where national differences in tastes and preferences are still often important enough to act as a break on globalization.    A.  services B.  consumer goods C.  staples D.  insurance and banking E.  industrial goods   Difficulty: Medium Hill - Chapter 01 #6   7. (p. 8) Examples of _______ include Coca-Cola and Pepsi, Ford and Toyota, Bombardier and Embraer, and Caterpillar and Komatsu.    A.  service goods B.  international brands C.  homogeneous products D.  global competition E.  market integration   Difficulty: Medium Hill - Chapter 01 #7   8. (p. 8) Globalization results in a greater degree of __________ across markets than would be present otherwise.    A.  diversification B.  diversity C.  homogeneity D.  heterogeneity E.  uniformity   Difficulty: Easy Hill - Chapter 01 #8   9. (p. 8) The globalization of __________ refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labour, energy, land, and capital).    A.  information technology B.  process design C.  markets D.  production E.  R&D   Difficulty: Easy Hill - Chapter 01 #9   10. (p. 9) The _______ was created in 1944 by 44 nations that met in Breton Woods, New Hampshire.    A.  International bank B.  World Monetary Fund C.  World Trade Organization D.  International Monetary Fund E.  United Nations   Difficulty: Medium Hill - Chapter 01 #10   11. (p. 8-9) In producing its products, Bombardier 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:    A.  finance B.  production C.  markets D.  process design E.  consumer demand   Difficulty: Medium Hill - Chapter 01 #11   12. (p. 8-9) According to the text, the propensity of firms to outsource many of their productive activities to different suppliers around the world has resulted in the creation of __________ products.    A.  multi-domestic B.  cross-national C.  global D.  cross-cultural E.  transborder   Difficulty: Easy Hill - Chapter 01 #12   13. (p. 9) The _______ is seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations.    A.  International Monetary Fund B.  International bank C.  United Nations D.  Canada's Export Development Corporation E.  Bank of Canada   Difficulty: Medium Hill - Chapter 01 #13   14. (p. 10) _______ are the two macro factors that seem to underlie the trend toward greater globalization.    A.  The increase in global economic stability, and the slowdown in technological change B.  The increase in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and global economic stability C.  The decline in barriers to the free flow of goods, services, and capital that has occurred in the past 10 years, and the slowdown in technological change D.  The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and technological change E.  Technological Change and the convergence of global product preferences   Difficulty: Hard Hill - Chapter 01 #14   15. (p. 10) With membership of 192 countries, the _______________ was established to preserve peace through international cooperation and collective security.    A.  World Monetary Fund B.  The International Monetary Fund C.  International bank D.  United Nations E.  NATO   Difficulty: Medium Hill - Chapter 01 #15   16. (p. 8, 10) Matrikon exports a number of products to users in other countries. This practice is referred to as __________.    A.  world exchange B.  international trade C.  cross-national barter D.  situational commerce E.  multinational diversification   Difficulty: Medium Hill - Chapter 01 #16   17. (p. 10) XYZ, Inc. is an auto parts distributing warehouse that exports many of its products to consumers in other countries. XYZ Inc. can be described as engaging in:    A.  international trade. B.  cross-border investments. C.  product development. D.  trading barriers. E.  international procurement.   Difficulty: Hard Hill - Chapter 01 #17   18. (p. 10) Which of the following refers to the exporting of goods or services to consumers in another country?    A.  situational commerce B.  world exchange C.  international trade D.  cross-national barter E.  foreign investment   Difficulty: Easy Hill - Chapter 01 #18   19. (p. 10) Although Inco is a Canadian company, it has invested substantial business resources in activities outside Canada. This practice is referred to as:    A.  transnational commerce B.  foreign direct investment C.  international trade D.  organizational diversification E.  outsourcing   Difficulty: Medium Hill - Chapter 01 #19   20. (p. 10) The investing of resources in business activities outside a firm's home country is referred to as:    A.  international trade B.  domestic direct investment C.  transnational barter D.  foreign direct investment E.  outsourcing   Difficulty: Easy Hill - Chapter 01 #20   21. (p. 8, 10) The __________ is a treaty designed to remove barriers to the free flow of goods, services, and capital between nations.    A.  Global Agreement on Tariffs and Commerce B.  United Nations Treaty on Trade C.  General Agreement on Tariffs and Trade D.  Multi-National Agreement on Tariffs and Commerce E.  The ILO   Difficulty: Medium Hill - Chapter 01 #21   22. (p. 11) Under the umbrella of GATT there have been eight rounds of negotiations among member states. The _______ was the most recent round of negotiations.    A.  Uruguay Round B.  Malaysian Symposium C.  German Round D.  New Zealand Symposium E.  Cancun Round   Difficulty: Medium Hill - Chapter 01 #22   23. (p. 11) Which of the following was not an outcome of the Uruguay Round of the GATT?    A.  reduced trade barriers B.  extended GATT to cover services as well as manufactured goods C.  established the World Trade Organization D.  provided extended protection for patents, trademarks, and copyrights E.  reduced agricultural subsidies   Difficulty: Hard Hill - Chapter 01 #23   24. (p. 10) The acronym GATT stands for:    A.  Global Agreement on Taxation and Tariffs B.  Global Association of Technology and Trade C.  General Agreement on Taxation and Trademarks D.  General Agreement on Tariffs and Trade E.  General Accord of Transportation and Trade   Difficulty: Easy Hill - Chapter 01 #24   25. (p. 11) The agency established at the 1993 Uruguay Round to police the international trading system is the __________.    A.  Global Trade Enforcement Administration B.  World Tariff and Trade Bureau C.  International Trade Enforcement Agency D.  World Trade Organization E.  The European bank of Reconstruction and Development   Difficulty: Medium Hill - Chapter 01 #25   26. (p. 11) Suppose Petro Canada, an international oil company, had a complaint about a trade issue. The __________, a governing body established at the Uruguay Round in 1993 to police the international trading system, is an organization that Petro Canada could take its complaint to.    A.  World Trade Organization B.  International Trade Monitoring Bureau C.  World Tariff and Trade Agency D.  International Trade Monitoring Agency E.  The United Nations   Difficulty: Medium Hill - Chapter 01 #26   27. (p. 11) The acronym WTO stands for:    A.  Western Trade Organization B.  World Tax Organization C.  World Trade Organization D.  World Tariff Organization E.  World Trade Operations   Difficulty: Easy Hill - Chapter 01 #27   28. (p. 11) Average tariff rates have ______________ since 1950.    A.  risen B.  fallen C.  stayed the same D.  risen then fallen E.  fallen then risen   Difficulty: Easy Hill - Chapter 01 #28   29. (p. 12, 13, 14) Many of the changes that countries have made pertaining to foreign direct investment regulations have:    A.  made it harder for foreign companies to enter their markets B.  made it easier for foreign companies to enter their markets C.  had no effect on the ease upon which foreign companies can enter their markets D.  made it easier to foreign producers of raw materials to enter their markets but more difficult for foreign producers of finished products to enter their markets E.  prevented the expropriation of business assets by a foreign government   Difficulty: Medium Hill - Chapter 01 #29   30. (p. 12) 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. B.  the volume of world trade has grown slower than the volume of world output since the 1950s. C.  the volume of world trade and the volume of world output have grown at approximately the same rate since the 1950s. D.  the volume of world trade and the volume of world output have remained constant since the 1950s. E.  the volume of world trade is inversely related to the growth of world output.   Difficulty: Hard Hill - Chapter 01 #30   31. (p. 12) According to your text, between 1950 to 2000, as world trade expanded by 20 times, world output grew by about _______.    A.  12 percent B.  1 percent C.  25 percent D.  6 ½ times E.  20 times   Difficulty: Hard Hill - Chapter 01 #31   32. (p. 14) The average yearly outflow of FDI increased from about $14 billion in 1970 to a record of _______________ in 2007, though it has fallen more recently.    A.  $550 billion B.  $73 billion C.  $1.73 trillion D.  $2.75 trillion E.  $11.8 trillion   Difficulty: Hard Hill - Chapter 01 #32   33. (p. 11-14) The lowering of trade barriers to international trade has    A.  enabled firms to approach the world as their market B.  enabled firms to be a domestic company in their home country. C.  decreased the volume of production. D.  created an increase of diverse partnerships. E.  encouraged firms to retrench in their home markets.   Difficulty: Medium Hill - Chapter 01 #33   34. (p. 14) Between 1990 and 2000, the total flow of FDI from all countries increase by about _______?    A.  2 times B.  3 times C.  4 times D.  5 times E.  6 times   Difficulty: Hard Hill - Chapter 01 #34   35. (p. 14) The globalization of markets, the growth of world trade, and the increase in FDI has had what effect? ______________.    A.  a decrease in production B.  a decrease in world trade C.  companies find their home markets under attack from foreign competitors D.  companies are reducing their profits E.  companies are during to protectionist measures   Difficulty: Hard Hill - Chapter 01 #35   36. (p. 13) Evidence suggests that FDI is playing a(n):    A.  decreasing role in the world economy B.  increasing role in the world economy for services but a decreasing role in the world economy for manufactured goods C.  increasing role in the world economy for manufactured goods but a decreasing role in the world economy for services D.  increasing role in the world economy E.  a limited role in the world economy   Difficulty: Medium Hill - Chapter 01 #36   37. (p. 14) Which of the following is a major cause for lowering the trade barriers of markets and production?    A.  Technological change B.  Increased labour mobility C.  Elastic demand D.  Corporate greed E.  Consumer demand   Difficulty: Medium Hill - Chapter 01 #37   38. (p. 14) According to our textbook, the growing integration of the world economy is:    A.  increasing the intensity of competition within the home market of a company in a wide range of manufacturing and service industries B.  decreasing the intensity of global competition in manufacturing industries, and increasing the intensity of domestic competition in services C.  increasing the intensity of global competition in manufacturing industries, and decreasing the intensity of domestic competition in services D.  narrowing the scope of global competition in a wide range of service, commodity, and manufacturing industries E.  Widening the opportunities for competing with manufacturing companies within their home market and narrowing the opportunities for competing with service companies in their home market.   Difficulty: Medium Hill - Chapter 01 #38   39. (p. 14) According to our textbook, the single most important technological innovation has been the development of the __________.    A.  telegraph B.  microprocessor C.  ocean container D.  airplane E.  telephone   Difficulty: Easy Hill - Chapter 01 #39   40. (p. 15) _______ is the theory that predicts that the power of microprocessor technology doubles and the cost of production falls every 18 months.    A.  Brennan's Theorem B.  Bailey's Law C.  Moore's Law D.  Ivan's Law E.  Global Micro Accelerant (GMA) Law   Difficulty: Medium Hill - Chapter 01 #40   41. (p. 15) According to your textbook, between 1930 and 1990, the cost of a three-minute phone call between New York and London fell from $244.65 to $3.32. This decrease can be mainly contributed to    A.  open communication between governments. B.  the advent of the microprocessor. C.  continuing efforts to globalize. D.  high corporate ethical standards. E.  the deregulation of the telecommunications industry   Difficulty: Hard Hill - Chapter 01 #41   42. (p. 15) As of September 2009 there are over _______ million Internet users in Canada.    A.  230 B.  458 C.  59 D.  25 E.  19   Difficulty: Hard Hill - Chapter 01 #42   43. (p. 15) According to our textbook, by the year 2007 online sales hit almost ____________ in Canada.    A.  $1 billion B.  $16 billion C.  $63 billion D.  $350 million E.  $591 million   Difficulty: Hard Hill - Chapter 01 #43   44. (p. 15) The greatest current potential of the Web seems to be in the ____________ arena.    A.  business-to-business B.  consumer-to-business C.  consumer-to-consumer D.  business-to-consumer E.  business-to-government   Difficulty: Easy Hill - Chapter 01 #44   45. (p. 15, 16) _______ was not mentioned in our textbook as major innovation in transportation technology.    A.  Commercial jet aircraft B.  Super freighters C.  E-commerce D.  The introduction of containerization E.  Both containerization and e-commerce were not mentioned   Difficulty: Medium Hill - Chapter 01 #45   46. (p. 15) Due to containerization, the transportation costs associated with the globalization of production have:    A.  remained the same B.  increased dramatically C.  declined D.  increased slightly E.  reduced insurance costs   Difficulty: Easy Hill - Chapter 01 #46   47. (p. 15) As a result of a variety of innovations, the real costs of information processing and communication have __________ over the past two decades.    A.  fallen slightly B.  increased slightly C.  remained constant D.  fallen dramatically E.  had no impact on the cost of international business   Difficulty: Easy Hill - Chapter 01 #47   48. (p. 17, 18, 19) Although the characteristics of the global economy have changed dramatically over the past 50 years, as late as the 1960s all of the following demographic characteristics were true except:    A.  the U.S. dominated the world economy B.  small, U.S. entrepreneurial firms dominated the international business scene C.  the U.S. dominated the world foreign direct investment picture D.  the U.S. was the world's largest industrial power E.  the U.S. dominated world trade   Difficulty: Medium Hill - Chapter 01 #48   49. (p. 18) Which country was the world's most dominant industry power was in the early 1960s?    A.  Japan B.  The United Kingdom C.  Germany D.  The United States E.  Canada   Difficulty: Easy Hill - Chapter 01 #49   50. (p. 19) In 1963, the U.S. accounted for _________ percent of world manufacturing output.    A.  80.0 B.  12.8 C.  65.6 D.  40.3 E.  24.6   Difficulty: Hard Hill - Chapter 01 #50   51. (p. 19) In recent years, all of the following countries have seen their relative share of world output fall except:    A.  United States B.  France C.  Germany D.  China E.  Japan   Difficulty: Hard Hill - Chapter 01 #51   52. (p. 19) In 2007, the U.S.'s largest trade partner was ___________________.    A.  United Kingdom B.  Mexico C.  China D.  Canada E.  South Korea   Difficulty: Medium Hill - Chapter 01 #52   53. (p. 19) Which of the following had the greatest share of the world's exports in 2006 from greatest to least?    A.  United States, Japan, China B.  Japan, Germany, United States C.  United States, Germany, Canada D.  China, United States, Japan E.  United States, France, China   Difficulty: Hard Hill - Chapter 01 #53   54. (p. 19) As of 2006, _______ was the world's largest exporter.    A.  the United States B.  China C.  Japan D.  Germany E.  France   Difficulty: Medium Hill - Chapter 01 #54   55. (p. 21) If we look into the future, most forecasts now predict a __________ in world output accounted for by developing nations such as China, India, Indonesia, and South Korea, and a __________ in the share enjoyed by rich industrialized countries such as Britain, Japan, and the United States.    A.  rapid rise; rapid decline B.  slight rise; slight decline C.  rapid decline; rapid rise D.  rapid rise; slight decline E.  stay the same; slight decline   Difficulty: Medium Hill - Chapter 01 #55   56. (p. 21) The relative decline of the developed countries' share of world output _________________.    A.  will reduce the living standards of the citizens of developed countries. B.  will increase competition for scarce resources and create political instability. C.  reflects the growing economic and industrial strength of developing countries. D.  will decrease prices but also reduce wages in Canada E.  will decrease job opportunities in Canada   Difficulty: Medium Hill - Chapter 01 #56   57. (p. 21) Which of the following is an example of a developing nation?    A.  Thailand B.  Britain C.  Japan D.  United States E.  Canada   Difficulty: Easy Hill - Chapter 01 #57   58. (p. 21) According to your text, the World Bank estimates that today's developing nations may account for more than _______ percent of world economic activity by 2020.    A.  35 B.  50 C.  55 D.  65 E.  60   Difficulty: Hard Hill - Chapter 01 #58   59. (p. 21) _______ is not considered to be a "developing" nation.    A.  Brazil B.  India C.  China D.  France E.  Mexico   Difficulty: Medium Hill - Chapter 01 #59   60. (p. 21) The World Bank has estimated that if current trends continue and based on purchasing power parity, by 2020 the __________ economy could be larger than that of the United States.    A.  Russian B.  Chinese C.  Japanese D.  British E.  German   Difficulty: Hard Hill - Chapter 01 #60   61. (p. 19) In the 1960s, the two countries with the largest share of world output were:    A.  United States and Japan B.  Britain and the United States C.  United States and Germany D.  Britain and Japan E.  United States and France   Difficulty: Hard Hill - Chapter 01 #61   62. (p. 20) Between 2008-2009, Canada's imports from all countries.    A.  rose B.  stayed the same C.  fell D.  showed a different pattern to Canada's exports to all countries E.  fell then rose   Difficulty: Medium Hill - Chapter 01 #62   63. (p. 21) The foreign direct investment by non-U.S. firms was motivated primarily by the following two factors:    A.  the desire to disperse production activities to optimal locations; and the desire to build a direct presence in major foreign markets B.  the desire to disperse production activities to optimal locations; and the desire to influence foreign exchange rates C.  the desire to influence foreign exchange rates; and the desire to influence political developments in foreign countries D.  the desire to build a direct presence in major foreign markets; and the desire to influence political developments in foreign countries E.  the desire to reduce dependence on the United States and to increase direct access to markets   Difficulty: Medium Hill - Chapter 01 #63   64. (p. 21) In the 1960s, what was then seen as an economic threat to Europe?    A.  The dominance of U.S. firms B.  Technological innovations C.  Low-cost transportation D.  Low-cost global communication networks E.  Reduction in trade barriers   Difficulty: Medium Hill - Chapter 01 #64   65. (p. 22) What is the total cumulative value of foreign investments is referred to as?    A.  accumulation of foreign direct investments B.  portfolio of foreign direct investments C.  stock of foreign direct investments D.  set of foreign direct investments E.  stock of foreign ownership   Difficulty: Easy Hill - Chapter 01 #65   66. (p. 22) Between 2008-2009, FDI Inward Stock    A.  fell for all counties and regions B.  rose only in North America C.  rose in all areas D.  fell only in the European Union E.  fell only in the Developed economies