Chapter 1: The Rise of Globalization | Business/Accounting Test Bank

Test Bank

TRUE/FALSE

1. With business becoming increasingly global, its success, fortunately, depends only on the domestic environment.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: p. 4 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

2. Even though business is global, the credit crisis of 2008, started by an American investment bank, was limited to the American economy with fortunately no impact on the global economy.

ANS: F PTS: 1 DIF: Difficulty: Challenging
REF: p. 3 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

3. Key aspects of globalization include the elimination of barriers to trade and information technology.

ANS: T PTS: 1 DIF: Difficulty: Moderate
REF: p. 5 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

4. So far globalization has made it possible for goods, services, and capital, to cross national borders but not technology and culture.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: p. 5 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

5. The soft qualities essential to globalization include openness, protectionism, accountability, connectivity, democracy, and centralization.

ANS: F PTS: 1 DIF: Difficulty: Challenging
REF: p. 6 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

6. A sustainable decoupling process would eventually lead to a multi-polar worlda world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone.

ANS: T PTS: 1 DIF: Difficulty: Challenging
REF: p. 9 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

7. The openness and proliferation of globalization and free trade rules can best be attributed to the interwar period between World War I and II.

ANS: F PTS: 1 DIF: Difficulty: Challenging
REF: p. 10 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

8. As part of the World Banks Strategic Framework, there are five focus areas that accommodate and facilitate the globalization process including its analytical and advisory role supporting national policies to strengthen free market institutions and infrastructure that has provided the potential for creating large gains from trade.

ANS: T PTS: 1 DIF: Difficulty: Challenging
REF: p. 12 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

9. For World Trade Organization, increasing trade barriers has been one of the most simplistic ways to encourage trade and globalization.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: p. 13 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

10. The foundations of the globalized business world are politicaland so are the biggest threats to the system.

ANS: T PTS: 1 DIF: Difficulty: Challenging
REF: p. 15 OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

11. Countries that have successfully adapted to globalization realize that they cannot succeed without high-quality government management at home.

ANS: T PTS: 1 DIF: Difficulty: Moderate
REF: p. 18 OBJ: LO: 01-04 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

12. In communist and state-controlled economies like those in Central Asia property rights either do not exist or are not well defined which discourages domestic and foreign investors from making long-term commitments in these countries.

ANS: T PTS: 1 DIF: Difficulty: Moderate
REF: p. 18 OBJ: LO: 01-04 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

13. More globalized economies like New Zealand and Singapore rank at the top in index for absence of corruption by Transparency International.

ANS: T PTS: 1 DIF: Difficulty: Challenging
REF: p. 19 OBJ: LO: 01-04 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

14. Because broadband prices have been falling, governments in emerging economies such as India and South Africa are facilitating the spread of broadband to rural towns and villages to provide instant access to market information and government programs to remote villagers which will enable policymakers to maximize the economic potential of remote communities and make globalization sustainable.

ANS: T PTS: 1 DIF: Difficulty: Moderate
REF: p. 20 OBJ: LO: 01-05 NAT: BUSPROG: Analytic
STA: DISC: Information Technology KEY: Blooms: Evaluation

15. Critics argue that open trade and foreign direct investment always take jobs from workers in developing economies and transfer them to workers in advanced industrial countries which leave the workers in the developing country, out of work.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: p. 23 OBJ: LO: 01-06 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

16. A survey by the World Bank indicates that of the companies surveyed; unfortunately, only 30 percent have board-approved policies on environmental management indicating that corporate social responsibility practices have become an insignificant factor in determining where multinational corporations conduct business.

ANS: F PTS: 1 DIF: Difficulty: Challenging
REF: p. 24 OBJ: LO: 01-06 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

MULTIPLE CHOICE

1. Of the following, which is NOT true regarding the credit crisis?
a. It affected farmers in Burkina Faso.
b. It affected miners and steel workers in Ukraine.
c. It affected assemble-line workers in Singapore.
d. It affected white-collar workers at information technology firms in Ireland.
e. It had an impact only on its country of origin- the United States.
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 3 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

2. Brazilian Juice, a manufacturer of healthy fruit juices in Brazil, sells juice in six different countries including United States. Brazilian juice is engaging in
a. economic development in United States.
b. exercising nontariff barriers in Brazil.
c. unfair trade practices.
d. globalization.
e. the World Trade Bank Group.
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 5 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Application

3. Which of the following is NOT a key aspect of globalization?
a. The elimination of barriers to trade
b. Investment
c. Financial independence
d. Culture
e. Information technology
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 5 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

4. Countries that have been moving toward more open trade and free market policies are known as _____.
a. African countries
b. open-door economies
c. industralized countries
d. globalized economies
e. emerging market economies
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 6 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Knowledge KEY: Blooms: Knowledge

5. India and Brazil have been moving towards more open trade and free market policies. These countries can be described as
a. emerging market economies.
b. open-door economies.
c. industrialized countries.
d. common market economies.
e. the World Bank countries.
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 11 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

6. A sustainable decoupling process would eventually lead to _____.
a. a multi-polar world
b. globalization
c. outsourcing
d. importing
e. exporting
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 9 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

7. A world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone can be described as a(an) __________.
a. interdependent world
b. industrialized world
c. globalized economy
d. multi-polar world
e. diverse world
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 10 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

8. According to the authors, which of the following is NOT true regarding globalization lessons for developing countries?
a. Import oriented nations must switch to concentrate on domestication.
b. Export oriented nations must diversify their market to include major emerging markets.
c. Countries emphasizing exports should base their strategy on their true competitive advantage.
d. For countries with large populations, the size of the domestic market remains most important.
e. Overindulgence can lead to disaster.
ANS: A PTS: 1 DIF: Difficulty: Challenging
REF: p. 10 OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

9. Which of the following is NOT a main purpose of the IMF?
a. Provide a forum for cooperation on international monetary problems
b. Facilitate the sustainable growth of international trade
c. Promote exchange rate stability
d. Lend countries foreign exchange when needed
e. Provide long-term low-interest social sector and infrastructure loans
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 11 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

10. What was the initial primary role of the World Bank?
a. To aide in the reconstruction of Europe after World War II
b. To help eradictate communicable diseases
c. To try to avoid a repetition of the disastrous economic policies that had contributed to the Great Depression.
d. To deal primarily with tariff negotiations
e. To provide loans and take equity position in private companies
ANS: A PTS: 1 DIF: Difficulty: Challenging
REF: p. 11 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

11. The International Bank for Reconstruction and Development performs which of the following functions?
a. Provides long-term low-interest social sector and infrastructure loans to the poorest members utilizing foreign aid funds provided by rich nation members
b. Provide loans and take equity position in private companies of developing countries and works toward developing capital markets in theose economies
c. Supports reconstruction and restructuring of member countries utilizing funds raised in international capital markets
d. Provides political risk coverage for private investments made in developing countries
e. Works on issues related to foreign investment disputes
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 12 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

12. The Multilateral Investment Guarantee Agency performs which of the following functions?
a. Provides long-term low-interest social sector and infrastructure loans to the poorest members utilizing foreign aid funds provided by rich nation members
b. Provide loans and take equity position in private companies of developing countries and works toward developing capital markets in those economies
c. Supports reconstruction and restructuring of member countries utilizing funds raised in international capital markets
d. Provides political risk coverage for private investments made in developing countries
e. Works on issues related to foreign investment disputes
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 12 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

13. The International Center for the Settlement of Investment Disputes performs which of the following functions?
a. Provides long-term low-interest social sector and infrastructure loans to the poorest members utilizing foreign aid funds provided by rich nation members
b. Provide loans and take equity position in private companies of developing countries and works toward developing capital markets in those economies
c. Supports reconstruction and restructuring of member countries utilizing funds raised in international capital markets
d. Provides political risk coverage for private investments made in developing countries
e. Works on issues related to foreign investment disputes
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 12 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

14. Trade expansion has been a leading factor in global integration, especially since the early _____.
a. 1650s
b. 1760s
c. 1890s
d. 1970s
e. 2000s
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 12 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

15. GATT refers to which of the following?
a. General Agreement of Tariffs and Trade
b. Great American Trade Tax
c. Gift of American Treaty Tips
d. General Articles on Tariffs and Trade
e. Great Articles on Tariffs and Trade
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 12 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

16. Which of the following is NOT an objective of the WTO?
a. Reviewing national trade policies
b. Acting as a form for trade negotiations
c. Helping eradictate communicable diseases
d. Settling trade disputes
e. Administering trade agreements
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 13 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

17. Trade without discrimination, freer trade, predictability, promotion of fair competition, and _____ are the five principles of the multilateral trading system.
a. integrated capital markets
b. encouragement of economic reform in developing countries
c. liberalization of the trading system
d. nontariff trade
e. international
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 14 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

18. The concept of curtailing agricultural subsidies in developed economies was incorporated into the ninth round to trade negotiations called the _____.
a. Dallas Round
b. Toronoto Round
c. Sparta Round
d. Kabul Round
e. Doha Round
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 14 OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

19. The rules, enforcement mechanisms, and organizations that support market transactions are referred to as _____.
a. industries
b. companies
c. businesses
d. corporations
e. institutions
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 15 OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

20. In Brazil, if there are government organizations that create strong incentives for private investment and operate under a system of checks and balances that function best in a democratic system of government, they could be classified as which of these?
a. Transparent organizations
b. Antitrust corporations
c. Adaptive institutions
d. Emerging markets
e. Capital markets
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 15 OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

21. In ABC country, a system of responsibility in which an authority, such as the government, is not answerable for its actions, it would be described as having the lack of _____.
a. banking system
b. integrity
c. accountability
d. transaction-based exporting
e. trustworthiness
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 15 OBJ: LO: 01-03 NAT: BUSPROG: Evaluation
STA: DISC: Legal Responsibilities KEY: Blooms: Evaluation

22. The most recent device(s) that enables greatest ease in portability and accessibility of information is (are) the _____.
a. magazines
b. newspapers
c. Internet
d. smart phones
e. computer
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 16 OBJ: LO: 01-03 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Knowledge

23. In India, several politicians are working very hard toward a system of full disclosure and openness that aims to avoid any semblance of corruption and cronyism. These efforts can be described as creating a system focused on _____.
a. politics
b. integrity
c. accountability
d. transparency
e. democracy
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 15 OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Legal Responsibilities KEY: Blooms: Evaluation

24. Which of the following is NOT true regarding property rights?
a. Protection of property rights has always been fundamental to market economies.
b. Studies have shown that countries that have successfully adapted to globalization guarantee property rights.
c. Less globalized countries offer less property rigiht protection.
d. In economies in Central Asia and parts of Africa and the Middle East, property rights are well defined.
e. Countries without property rights will most likely fall behind nations that guarantee property rights.
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 18 OBJ: LO: 01-04 NAT: BUSPROG: Analytic
STA: DISC: Legal Responsibilities KEY: Blooms: Comprehension

25. Illicit dealings undermine economic performance by doing all of the following EXCEPT:
a. decreasing costs.
b. raising competition.
c. thwarting competition.
d. reducing transparency.
e. raising insecurity.
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 19 OBJ: LO: 01-04 NAT: BUSPROG: Ethics
STA: DISC: Ethical Responsibilities KEY: Blooms: Comprehension

26. ABC Technology touts in their advertisements that their technology can transfer huge amount of data and other information in a second via the Internet. This describes ABCs _____ in technology.
a. brandwith
b. digital server
c. digital divide
d. gigabytes
e. Y2K
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 19 OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Application

27. Which of the following is NOT true regarding the global use of information technology?
a. Our globe relies on the Internet for business and social activity.
b. Broadband prices have been falling.
c. The IT revolution has been relatively slow.
d. Internet-related technologies help reduce corporate and societal hierarchies.
e. Internet and wireless technologies could make many authoritarian governments uneasy.
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 19 OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Evaluation

28. The _____ describes the perceived economic gap between countries or people with easy access to digital and information technology and those with very limited or no access.
a. bandwith
b. digital era
c. digital divide
d. gigabyte number
e. Y2K gap
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: p. 21 OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Knowledge

29. Of the following, which is NOT true regarding the Internet and cell phone era?
a. Fortunately, the next billion users will be the same as the first billion
b. The majority of users will be from developing countries
c. Text messaging will likely predominate emerging economies; mobile phone usage
d. Countries are skipping the use of land-line technology and jumping to wireless systems
e. Developing countries may leapfrog an entire generation of technology
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 22 OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Evaluation

30. All of the following are arguments against globalization EXCEPT:
a. it may lead to an increase in the apperance of old industries.
b. it may lead to a loss of control over economic policies and developments.
c. it may lead to an erosion of communities.
d. it can be a force of exploitation and injustice.
e. it can cause job losses and stagnant wages.
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 23 OBJ: LO: 01-06 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

31. The only way workers in industrialized countries can compete with their counterparts in the developing world will be through:
a. increased use of the cost leadership strategy.
b. increased diversity within the organization.
c. increased empowerment of employees.
d. increased productivity by using technologically-intensive manufacturing technologies.
e. increased flat organization structure.
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 23 OBJ: LO: 01-06 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Analysis

32. McDonalds consumer products are made primarily of renewable materials; some of the material comes from recycled fiber. The restaurants also utilize LED light fixtures. McDonalds is engaging in _____.
a. future sourcing
b. global warming
c. next-generation consumer hook
d. digital divide
e. sustainable development
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 24 OBJ: LO: 01-06 NAT: BUSPROG: Ethics
STA: DISC: Ethical Responsibilities KEY: Blooms: Application

33. Which of the following is NOT true regarding results from a survey by the World Bank on corporate social responsibility (CSR)?
a. CSR practices are now a significant factor in determining where multinational companies conduct business.
b. 90% of the companies surveyed have board-approved policies on environmental management.
c. 90% of multinationals will make their decisions based on CSR issues with regard to foreign direct investment.
d. CSR issues consistently implemented for the long term lead to sustainable business and development.
e. CSR includes issues such as labor rights, corruption, human rights, community health, and land rights.
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 24 OBJ: LO: 01-06 NAT: BUSPROG: Ethics
STA: DISC: Ethical Responsibilities KEY: Blooms: Evaluation

34. Successive waves of globalization include characteristics such as the expansion of trade, the diffusion of technology, extensive migration, and _____.
a. improvements in country infrastructure
b. increased employee morale
c. improved healthcare
d. financial independence
e. cross-fertilization of diverse cultures
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 25 OBJ: LO: 01-07 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

35. Which of the following is NOT true regarding globalization?
a. It guarantees that quality of life for all people will increase.
b. It creates winners and losers.
c. It has the potential to increase the quality of life for people.
d. Some multinational companies will utilize globalization may try to pay substandard wages to the workers they employ in developing countries.
e. Export barriers may need to be imposed by the WTO to help regulate the actions of multinational companies.
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 25 OBJ: LO: 01-07 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

36. All of the following countries can be considered globalization winners EXCEPT:
a. China
b. Central Asia
c. India
d. Brazil
e. South Africa
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 25 OBJ: LO: 01-07 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

37. Which of the following is NOT true regarding globalizations winners and losers?
a. Brazil has been flourishing due to gloablization.
b. According to the World Bank, more than 400 million Chinese citizens have climbed out of poverty since the implementation of economic reform that started in their country.
c. Those that suffer most from the effects of globalization are those countries that have not been able to seize the opportunities to participate in this process.
d. Unfortunately, globalization only creates winners in industralized countries such as the United States.
e. Efforts to hold back globalizaiton or technological progress are bound to fail.
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 25 OBJ: LO: 01-07 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

COMPLETION

1. The socio-economic reform process of eliminating trade, investment, cultural, information technology, and political barriers across countries, which in turn could lead to increased economic growth and geo-political integration and interdependence among nations of the world refers to ________.

ANS: globalization

PTS: 1 DIF: Difficulty: Moderate REF: p. 5
OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

2. Countries that are implementing more open trade and free market policies are called ______.

ANS: emerging market economies

PTS: 1 DIF: Difficulty: Easy REF: p. 6
OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

3. _______ refers to a fundamental global shift in which industrialized country-dependent developing economies begin to grow based on their own underlying economic strengths rather than the ups and downs of the worlds richest countries.

ANS: Decoupling

PTS: 1 DIF: Difficulty: Moderate REF: p. 8
OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

4. A world economy in which the engines of growth could comprise several major industrialized and emerging market economies such as the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone is called ______.

ANS: multi-polar world

PTS: 1 DIF: Difficulty: Moderate REF: p. 9
OBJ: LO: 01-01 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

5. The international financial environment in which exchange rates and international payments for goods and services are conducted refers to _________.

ANS: international monetary system

PTS: 1 DIF: Difficulty: Moderate REF: p. 11
OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

6. ________ are economic policy changes that promote private sector development, competitive markets, market-pricing, freer trade, and deregulation.

ANS: Economic reforms

PTS: 1 DIF: Difficulty: Easy REF: p. 11
OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

7. A stock exchange where long-term financial instruments such as stocks and bonds can be bought and sold refers to _______.

ANS: capital markets

PTS: 1 DIF: Difficulty: Easy REF: p. 12
OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

8. _______ refers to lowering and/or removing trade barriers such as tariffs, quotas, and subsidies.

ANS: Liberalization of the trading system

PTS: 1 DIF: Difficulty: Easy REF: p. 13
OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Knowledge KEY: Blooms: Knowledge

9. The rules, enforcement mechanisms, and organizations that support market transactions are called ______.

ANS: institutions

PTS: 1 DIF: Difficulty: Easy REF: p. 15
OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

10. ______ are government organizations that create strong incentives for private investment and operate under a system of checks and balances.

ANS: Adaptive institutions

PTS: 1 DIF: Difficulty: Moderate REF: p. 15
OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

11. A system of responsibility in which an authority, such as the government, is answerable for its actions refers to ________.

ANS: accountability

PTS: 1 DIF: Difficulty: Moderate REF: p. 15
OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

12. ______ is a system of full disclosure and openness that aims to avoid any semblance of corruption and cronyism.

ANS: Transparency

PTS: 1 DIF: Difficulty: Easy REF: p. 15
OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

13. National laws aimed at maintaining competition in all sectors of the economy and preventing monopolistic behavior of firms are called _______.

ANS: antitrust laws

PTS: 1 DIF: Difficulty: Easy REF: p. 18
OBJ: LO: 01-04 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

14. The period of transformation that adjusts lifestyles to make the Internet and wireless technologies a part of everyday life refers to the ______.

ANS: digital era

PTS: 1 DIF: Difficulty: Easy REF: p. 19
OBJ: LO: 01-05 NAT: BUSPROG: Communication
STA: DISC: Information Technology KEY: Blooms: Knowledge

15. _______ refers to the amount of data and other information that can be transferred in a second via the Internet.

ANS: Bandwith

PTS: 1 DIF: Difficulty: Easy REF: p. 19
OBJ: LO: 01-05 NAT: BUSPROG: Communication
STA: DISC: Information Technology KEY: Blooms: Knowledge

16. The perceived economic gap between countries or people with easy access to digital and information technology (and its benefits) and those with very limited access, or none at all refers to the ________.

ANS: digital divide

PTS: 1 DIF: Difficulty: Moderate REF: p. 21
OBJ: LO: 01-05 NAT: BUSPROG: Communication
STA: DISC: Information Technology KEY: Blooms: Knowledge

17. Economic development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs, whether environmentally, socially or economically is called ______.

ANS: Sustainable development

PTS: 1 DIF: Difficulty: Moderate REF: p. 24
OBJ: LO: 01-06 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Knowledge

ESSAY

1. Differentiate between the International Monetary Fund and the World Bank as institutions facilitating globalization.

ANS:
Student answers will vary.

PTS: 1 DIF: Difficulty: Challenging REF: p. 10-12
OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Analysis

2. The World Trade Organization has no role in facilitating globalization. Do you agree? Defend your position.

ANS:
Student answers will vary.

PTS: 1 DIF: Difficulty: Moderate REF: p. 12-13
OBJ: LO: 01-02 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

3. Identify and explain the characteristics of strong institutional structure necessary to adapt to globalization.

ANS:
Student answers will vary.

PTS: 1 DIF: Difficulty: Challenging REF: p. 14-16
OBJ: LO: 01-03 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Synthesis

4. Identify and describe any two key policy measures that make globalization sustainable.

ANS:
Student answers will vary.

PTS: 1 DIF: Difficulty: Moderate REF: p. 24-25
OBJ: LO: 01-04 NAT: BUSPROG: Analytic
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

5. Given the rapid advancements in technology in developed countries and fast pace of globalization, it is not possible to bridge the global digital divide. Do you agree with this statement? Why or why not? Explain.

ANS:
Student answers will vary.

PTS: 1 DIF: Difficulty: Challenging REF: p. 21-22
OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Evaluation

6. Present the arguments against globalization. Do you agree or disagree with them? Support your position using examples.

ANS:
Student answers will vary.

PTS: 1 DIF: Difficulty: Challenging REF: p. 22-26
OBJ: LO: 01-06 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

CASE

Scenario T & M Computers

Thomas Benson and Matthew Roderick started a small computer business ten years ago in Rapid City, South Dakota. Armed only with determination and innovative designs, Thomas and Matthew were driven to achieve success for their company, T & M Computers. Their hard work has indeed, paid off. Since the inception of the company, the two owners have watched their business grow and demand for their products increase.

Four years ago due to this high product demand, they went international with their business operations. Thomas and Matthew now have international business operations in Singapore, France, Turkey, and Great Britain. Further operational expansion is anticipated within the next year and the company plans to begin operations in Spain, Greece, and Italy.

The owners hard work and dynamic ideas have proven quite profitable for the company. Thomas and Matthew are pleased with how their operation has grown into becoming a major international business worthy of competing with Intel and Microsoft. T & M Computers may well be the next giant recognized in the field of computer software.

1. T & M Computers are conducting international business operations in world areas, which have recently undergone financial turmoil. Of the following, which organization is most likely to provide assistance in providing global financial stability?
a. International Monetary Fund
b. The United Nations
c. The World Bank
d. The Global Center for Financial Restructuring
e. The World Trade Organization
ANS:
a

PTS: 1 DIF: Difficulty: Challenging REF: p. 10-11
OBJ: LO: 01-02 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

2. Which one of the following would T & M Computers least expect to be a negative influence from the sovereign governments within the nations where their business operations are located?
a. Military hostilities
b. Protectionist policies
c. Promotion of economic growth and job creation
d. Stiff environmental standards
e. Stringent immigration policies
ANS:
c

PTS: 1 DIF: Difficulty: Moderate REF: p. 11
OBJ: LO: 01-02 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Analysis

3. T & M Computers plans to begin operations in areas that recently needed financial assistance and undergone certain levels of reconstruction and reorganizing to their economies. Which organization listed below is most likely to have played an integral part in this?
a. The World Trade Organization
b. The World Bank Group
c. The International Development Association
d. The International Finance Corporation
e. The sovereign government of Greece
ANS:
b

PTS: 1 DIF: Difficulty: Challenging REF: p. 11
OBJ: LO: 01-02 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Evaluation

Scenario The Everline Corporation

The Everline Corporation is a multinational business that provides state-of-the-art digital communication capabilities to its global customers. Originally operating as a U.S. domestic business based in Duluth, Minnesota, Everline quickly seized on the opportunity provided by international expansion. Within two years, the corporation had expanded into fourteen foreign nations found throughout the Middle East, Europe, Asia, and South America.

Everline understands the vital importance of offering effective and affordable communication products to its customers. It realizes the value consumers place on being able to communicate with businesses without delays or hassles. The corporation recognizes its customers need to quickly and efficiently communicate with others in the global marketplace of today.

Fueled by its staff of innovative and highly skilled communication engineers, the future for Everline looks more and more promising. Communication needs around the globe continue to grow and this business stands ready to fill the demand. With net profits expected to reach one billion dollars in the next year, this company is decidedly reaping the rewards of its hard work.

4. The Everline Corporation is currently conducting its international communication business during a period of time that is experiencing rapid changes and challenges. Individuals and organizations are adjusting their lifestyles and methods of operations to fully utilize the modern communication technologies available in the marketplace. The time period Everline is currently operating under is best classed as which one of the following terms?
a. Digital proliferation
b. Modern communication era
c. Digital divide
d. Communication decade
e. Digital era
ANS:
e

PTS: 1 DIF: Difficulty: Moderate REF: p. 19
OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Analysis

5. There is a perceived economic gap among the various foreign customers of the Everline Corporation. This is thought to be mainly the result of the level of access or lack thereof to modern digital information technologies experienced within these individual countries. Considering this perceived economic gap, Everlines operations may be experiencing influence identified as which of the following?
a. Digital stagnation
b. Digital era
c. Digital divide
d. Bandwidth technology era
e. Web revolution
ANS:
c

PTS: 1 DIF: Difficulty: Moderate REF: p. 21
OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Evaluation

6. The Everline Corporations future business plans include expanding into foreign markets where the use of mobile Web browsing is growing rapidly. Which one of the following countries would this organization be least likely to look toward to include in their future expansion plans?
a. India
b. South Africa
c. Indonesia
d. Canada
e. Russia
ANS:
d

PTS: 1 DIF: Difficulty: Moderate REF: p. 20
OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Evaluation

7. The mangers of the Everline Corporation attribute their companys continued profitability to the idea that globalization and information technology are closely related to one another. They acknowledge that the information technology revolution has occurred almost instantaneously. Which one of the following would not be considered a benefit derived from this so-called revolution?
a. Societal hierarchies have grown in number to better accommodate information technology changes.
b. A more free flow of capital across national boundaries has occurred.
c. Operating costs have decreased for many businesses.
d. The production of goods and services has become globalized.
e. The costs of communication are reduced.
ANS:
a

PTS: 1 DIF: Difficulty: Moderate REF: p. 20
OBJ: LO: 01-05 NAT: BUSPROG: Technology
STA: DISC: Information Technology KEY: Blooms: Evaluation

Scenario The Renna Company

Established in 1956, the Renna Company has always maintained its operations within the boundaries of the United States. Originally based in Lexington, Kentucky, this company has now expanded operations into thirteen other U.S. states. While its inexpensive and efficient cooling and heating products are in high demand even in foreign markets, this company contends it has no desire for international expansion.

Conducting operations strictly within the U.S. borders does not appear to have limited this company overly much. It realized net profits of two billion dollars last year and provided gainful employment for over four thousand workers. The leaders of the Renna Company realize greater profits could be attained through international expansion. However, they stand in agreement when they state, It is not always the money that best defines the worth of an organization.

The company desire to stay true to its mission statement, which claims, It will serve the marketplace of the United States with its superior products and provide job opportunities with a fair wage for its employees. The Renna Company is very proud of its products and enjoys the fact they are produced and sold in the United States of America. This company truly reflects the success possible when holding to the fact that Made in America is still a winner.

8. Which one of the following statements is least likely to be a rationale explaining why the Renna Company staunchly desires to avoid global expansion?
a. Globalization can create a wearing away of old industries.
b. Globalization brings into play the concept of sustainable development.
c. Globalization can contribute to an increase in environmental degradation.
d. Global expansion often leads to greater integration and interdependence among economies and societies, which can bring about injustices.
e. Economic change comes with a high price tag including job losses and wages that become stagnant.
ANS:
b

PTS: 1 DIF: Difficulty: Moderate REF: p. 24
OBJ: LO: 01-06 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Analysis

9. All of the following are examples of counterarguments the Renna Company should consider before continuing with their stand of keeping their operations strictly within the borders of the United States except which one?
a. Global expansion affords a strong potential for costs of both product production and product purchase to decrease.
b. Life expectancy may increase for members of the population within the nations involved in globalization due to the increased quality of life.
c. Globalization contributes to faster economic growth for the nations involved.
d. The quality of life is most likely to improve for the citizens of the nations that are involved with globalization and trade.
e. The wage levels of each nation may become stagnant and some workers may become displaced, having been replaced by less expensive foreign labor.
ANS:
e

PTS: 1 DIF: Difficulty: Moderate REF: p. 25
OBJ: LO: 01-07 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Analysis

10. The Renna Company has a clear understanding of the benefits of economic development. Economic development which meets the needs of the present generation without compromising the ability of future generations to meet their own needs, whether environmentally, socially or economically is best identified as which one of the following?
a. Sustainable development
b. Reform process
c. Trade liberalization
d. Corporate social responsibility
e. Environmental degradation
ANS:
a

PTS: 1 DIF: Difficulty: Moderate REF: p. 24
OBJ: LO: 01-06 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Comprehension

11. The top management members of the Renna Company have outlined the pros and cons associated with global expansion of their operations. Which one of the following items would not be considered a benefit their company could gain should they ever decide to venture into the international marketplace?
a. Improved quality of life for members of the societies involved
b. Greater access to technologically intensive manufacturing techniques
c. Loss of domestic jobs and a decrease to the prevailing wage scale
d. Lower cost of imported goods
e. Poverty reduction
ANS:
c

PTS: 1 DIF: Difficulty: Moderate REF: p. 25
OBJ: LO: 01-06 NAT: BUSPROG: Reflective Thinking
STA: DISC: Environmental Influence KEY: Blooms: Analysis