INTB 200 MIDTERM TEST QUESTIONS AND ANSWERS SOLVED CORRECTLY
Globalization - Answers refers to the trend towards a more integrated and interdependent world
economy
Two key facets of globalization
- The globalization of markets
- The globalization of production
Globalization of Markets - Answers The merging of separate national markets into one global
marketplace
Globalization of Production - Answers Sourcing of goods and services all around world to take advantage
of national differences in regards to factors of production
Lower overall cost structure
Improve the quality of the product to compete more effectively
Impediments to globalization - Answers Formal and informal trade barriers
Barriers to foreign direct investment
Transportation costs
Economic and political risk
Managerial challenge
Global institutions - Answers Manage, regulate, and police the global market place
Promote the establishment of multinational treaties to govern the global business system
,World Trade Organization (WTO) - Answers goal is free trade with minimal government intervention
encompassed GATT, the General Agreement on Trade in Services (GATS), and the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS)
International Monetary Fund (IMF) - Answers bails countries out of trouble financially, especially
developing countries
World Bank - Answers Promotes economic development using low-interest loans
United Nations (UN) - Answers an intergovernmental organization tasked to promote international
cooperation and order
Group of 20 (G20) - Answers Finance ministers and central bank governors of 19 largest world
economies
Represents 90% of global BDP
A forum for a coordinated policy response to the financial crisis of 2008-2009
2 factors driving the move toward greater globalization - Answers Decline in barriers to free flow of
goods, services, and capital
Technological change
International trade - Answers when a firm exports goods or services to another country
Foreign direct investment - Answers when a firm invests resources in business outside its home country
Stock of foreign direct investment - Answers (total cumulative value of foreign investments) generated
by rich industrial countries is declining
multinational enterprise (MNE) - Answers any business that has productive activities in 2 or more
countries
Supra national - Answers not associated with any particular government but is a conglomerate of
countries
Developing Countries- Pros and Cons of Globalization - Answers Pros
- Cheaper labor
, - Quicker and greater expansion
- Overall, significant increase in wealth and less poverty
- Lower transportation costs
Cons
- Increased inequality in developing nations between the rich and the poor. Globalization is making the
rich richer and the poor poorer.
- Economies becoming more intertwined
- Spread of disease and loss of culture and customs
International business - Answers any firm involved in international trade or investment
International business different for four reasons - Answers Countries are different
Range of problems is wider and more complex
Must find ways to work within governmental limits
Transactions involve converting different currencies
Global business - Answers normally a standardized product and often has to do with industrial products,
tend to not localize product
Multinational corporation - Answers involved in foreign direct investment
Patent - Answers government authority conferring a right or title for a set period
Political risk - Answers Macro
- Political system/stability
- War
- Military/government/religion
Globalization - Answers refers to the trend towards a more integrated and interdependent world
economy
Two key facets of globalization
- The globalization of markets
- The globalization of production
Globalization of Markets - Answers The merging of separate national markets into one global
marketplace
Globalization of Production - Answers Sourcing of goods and services all around world to take advantage
of national differences in regards to factors of production
Lower overall cost structure
Improve the quality of the product to compete more effectively
Impediments to globalization - Answers Formal and informal trade barriers
Barriers to foreign direct investment
Transportation costs
Economic and political risk
Managerial challenge
Global institutions - Answers Manage, regulate, and police the global market place
Promote the establishment of multinational treaties to govern the global business system
,World Trade Organization (WTO) - Answers goal is free trade with minimal government intervention
encompassed GATT, the General Agreement on Trade in Services (GATS), and the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS)
International Monetary Fund (IMF) - Answers bails countries out of trouble financially, especially
developing countries
World Bank - Answers Promotes economic development using low-interest loans
United Nations (UN) - Answers an intergovernmental organization tasked to promote international
cooperation and order
Group of 20 (G20) - Answers Finance ministers and central bank governors of 19 largest world
economies
Represents 90% of global BDP
A forum for a coordinated policy response to the financial crisis of 2008-2009
2 factors driving the move toward greater globalization - Answers Decline in barriers to free flow of
goods, services, and capital
Technological change
International trade - Answers when a firm exports goods or services to another country
Foreign direct investment - Answers when a firm invests resources in business outside its home country
Stock of foreign direct investment - Answers (total cumulative value of foreign investments) generated
by rich industrial countries is declining
multinational enterprise (MNE) - Answers any business that has productive activities in 2 or more
countries
Supra national - Answers not associated with any particular government but is a conglomerate of
countries
Developing Countries- Pros and Cons of Globalization - Answers Pros
- Cheaper labor
, - Quicker and greater expansion
- Overall, significant increase in wealth and less poverty
- Lower transportation costs
Cons
- Increased inequality in developing nations between the rich and the poor. Globalization is making the
rich richer and the poor poorer.
- Economies becoming more intertwined
- Spread of disease and loss of culture and customs
International business - Answers any firm involved in international trade or investment
International business different for four reasons - Answers Countries are different
Range of problems is wider and more complex
Must find ways to work within governmental limits
Transactions involve converting different currencies
Global business - Answers normally a standardized product and often has to do with industrial products,
tend to not localize product
Multinational corporation - Answers involved in foreign direct investment
Patent - Answers government authority conferring a right or title for a set period
Political risk - Answers Macro
- Political system/stability
- War
- Military/government/religion
