D080 Pre-Assessment Questions and Answers
1. Which negative outcome on political systems comes from globalization?: -
Creation of isolationist policies
2. Which factor results in a higher rate of globalization?: Reduced trade barriers
3. What are the four factors in Ghemawat's CAGE analysis?: Culture, adminis- tration, geography,
economy
4. What is a major drawback to the home country when companies outsource manufacturing jobs to
countries with lower worker wages?: Loss of manufac- turing jobs
5. A country has a characteristic traditional economic system with poor infra- structure and limited
economic opportunity.
What is the impact of this system on the process of globalization?: The globalization process is at a
disadvantage as the country has a lower standard of living.
6. What is a characteristic of a market economy?: Firms seek to maximize profi ts.
7. Which impact does Islamic law directly have on businesses?: It forbids charging interest.
8. Which institution helps to maintain availability of global financing to solve trade deficit issues?:
International Monetary Fund
9. What is the current focus of the World Bank?: Improving quality of life
10.For which concern has the World Trade Organization been criticized?: -
Adoption of labor standards protecting labor rights
11.How is the Special Drawing Right of the International Monetary Fund (IMF) valued?: It is based
on the value of the five most significant members' currencies.
12.Two countries agree to open their borders to international business trans- actions with one
another without tariffs.
How does this affect global business?: It leads to developing free trade policies with strategic
partners.
13.A country uses its established technology infrastructure to produce a good.
What is the impact of this infrastructure on trade?: It will create barriers to entry for other nations.
14.What was the economic impact of the North American Free Trade Agree- ment (NAFTA)?: The
shift of jobs away from low comparative advantage industries
15.A company that is located in Country A would like to sell products in Coun- try B. The government
of Country B is pushing for a tariff-based international
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, D080 Pre-Assessment Questions and Answers
trade agreement on the product.
What is the reasoning behind Country B's decision?: Country B seeks to protect its economy and
give it the opportunity for long-term expansion.
16.Countries A and B participate in trade agreements that allow free trade among participant
countries. However, Country A imposed quotas on several imported products to protect its domestic
products.
What is the effect, if any, on the domestic prices of these products?: Increases
17.Two countries decide to open up trade with each other.
What is likely to happen when trade opens up?: Jobs will increase in comparative advantage
industries.
18.What is a purpose of a country implementing trade protectionism?: To protect an infant
industry
19.Country A and Country B are trying to mend their relationship. A company from Country A would
like to invest in a company in Country B.
Which action by Country B will help these two countries meet their goal?: Pro- vide tax exemptions
20.Which level of regional economic integration is a key feature of a Customs Union?: Unified
trading policies with non-members
21.What is a drawback of creating regional trade agreements?: They shift employment
opportunities.
22.The United States-Mexico- Canada Agreement (USMCA), a modification of the North American
FreeTrade Agreement (NAFTA), broadened the scope of free trade between member nations and
tightened restrictions in the region.
Which regulation was established by this new agreement?: Almost half of all automobile parts
must be made by a labor force that earns a minimum of $16 per hour by 2023.
23.A U.S. capital investment firm is researching new markets to enter to diversify its portfolio. The
director of foreign investments presented a pitch to the board of directors encouraging entry into the
Costa Rican telecommunica- tions market by investing in local companies in the region through
acquisition.
Which alliance supports this director's suggestion?: Central America Free Trade Agreement
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8
1. Which negative outcome on political systems comes from globalization?: -
Creation of isolationist policies
2. Which factor results in a higher rate of globalization?: Reduced trade barriers
3. What are the four factors in Ghemawat's CAGE analysis?: Culture, adminis- tration, geography,
economy
4. What is a major drawback to the home country when companies outsource manufacturing jobs to
countries with lower worker wages?: Loss of manufac- turing jobs
5. A country has a characteristic traditional economic system with poor infra- structure and limited
economic opportunity.
What is the impact of this system on the process of globalization?: The globalization process is at a
disadvantage as the country has a lower standard of living.
6. What is a characteristic of a market economy?: Firms seek to maximize profi ts.
7. Which impact does Islamic law directly have on businesses?: It forbids charging interest.
8. Which institution helps to maintain availability of global financing to solve trade deficit issues?:
International Monetary Fund
9. What is the current focus of the World Bank?: Improving quality of life
10.For which concern has the World Trade Organization been criticized?: -
Adoption of labor standards protecting labor rights
11.How is the Special Drawing Right of the International Monetary Fund (IMF) valued?: It is based
on the value of the five most significant members' currencies.
12.Two countries agree to open their borders to international business trans- actions with one
another without tariffs.
How does this affect global business?: It leads to developing free trade policies with strategic
partners.
13.A country uses its established technology infrastructure to produce a good.
What is the impact of this infrastructure on trade?: It will create barriers to entry for other nations.
14.What was the economic impact of the North American Free Trade Agree- ment (NAFTA)?: The
shift of jobs away from low comparative advantage industries
15.A company that is located in Country A would like to sell products in Coun- try B. The government
of Country B is pushing for a tariff-based international
1/
8
, D080 Pre-Assessment Questions and Answers
trade agreement on the product.
What is the reasoning behind Country B's decision?: Country B seeks to protect its economy and
give it the opportunity for long-term expansion.
16.Countries A and B participate in trade agreements that allow free trade among participant
countries. However, Country A imposed quotas on several imported products to protect its domestic
products.
What is the effect, if any, on the domestic prices of these products?: Increases
17.Two countries decide to open up trade with each other.
What is likely to happen when trade opens up?: Jobs will increase in comparative advantage
industries.
18.What is a purpose of a country implementing trade protectionism?: To protect an infant
industry
19.Country A and Country B are trying to mend their relationship. A company from Country A would
like to invest in a company in Country B.
Which action by Country B will help these two countries meet their goal?: Pro- vide tax exemptions
20.Which level of regional economic integration is a key feature of a Customs Union?: Unified
trading policies with non-members
21.What is a drawback of creating regional trade agreements?: They shift employment
opportunities.
22.The United States-Mexico- Canada Agreement (USMCA), a modification of the North American
FreeTrade Agreement (NAFTA), broadened the scope of free trade between member nations and
tightened restrictions in the region.
Which regulation was established by this new agreement?: Almost half of all automobile parts
must be made by a labor force that earns a minimum of $16 per hour by 2023.
23.A U.S. capital investment firm is researching new markets to enter to diversify its portfolio. The
director of foreign investments presented a pitch to the board of directors encouraging entry into the
Costa Rican telecommunica- tions market by investing in local companies in the region through
acquisition.
Which alliance supports this director's suggestion?: Central America Free Trade Agreement
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8
