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INTERNATIONAL BUSINESS EXAM 1
REVIEW QUESTIONS WITH DETAILED
VERIFIED ANSWERS
Globalization Ans: Movement from thinking about markets in terms of
geographic areas to thinking about them as something that transcends
borders; the shift towards a more integrated and interdependent world
economy
World-wide sourcing Ans: All types of businesses are getting inputs from
several global locations
Globalization of markets Ans: Merging of historically distinct and
separate national markets into one huge global market;
Globalization of production Ans: Sourcing of goods and services from
locations around the globe to take advantage of national differences in
cost and quality factors of production
Factors of production Ans: inputs into the productive processes of a
firm, including labor management, land, capital, and technological know
how
General Agreement on Tariffs and Trade (GATT) Ans: International
treaty that committed signatures to lowering barriers to the free flow of
goods across national borders and led to the WTO
World Trade Organization Ans: Primarily responsible for policing the
world trading system and making sure nation-states adhere to the rules
laid down in trade treaties signed by WTO member states (97% of world
trade countries)
International Monetary Fund Ans: International institution set up to
maintain order in the international monetary system
United Nations Ans: International organization made up of 193 countries
to promote peace, security, and cooperation
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G20 Ans: Comprises the finance ministers and central bank governors of
the 19 largest economies in the world, plus representatives from the EU
and European Central Bank
International Trade Ans: Occurs when a firm exports goods or services
to consumers in another country
Foreign Direct Investment (FDI) Ans: Direct investment in business
operations in a foreign country
Two factors that underlie trend towards greater globalization Ans:
Declining barriers to international trade and technological chanve
Moore's Law Ans: The power of microprocessor technology doubles and
its costs of production fall in half every 18 months
Stock of FDI Ans: The total accumulated value of foreign-owned assets
at a given time
Multinational Enterprise Ans: A firm that owns business operations in
more than one country
International Business Ans: Any firm that engages in international trade
or investment
Two major forces in the global economy Ans: trade and investment
Political economy Ans: The political, economic, and legal systems of a
country
Political system Ans: System of government in a nation
Collectivism Ans: A political system that emphasizes collective goals as
opposed to individual goals
Socialist Ans: Someone who believes in public ownership of the means
of production for the common good of society
Communists Ans: Those who believe socialism can be achieved only
through revolution and totalitarian dictatorship
INTERNATIONAL BUSINESS EXAM 1
REVIEW QUESTIONS WITH DETAILED
VERIFIED ANSWERS
Globalization Ans: Movement from thinking about markets in terms of
geographic areas to thinking about them as something that transcends
borders; the shift towards a more integrated and interdependent world
economy
World-wide sourcing Ans: All types of businesses are getting inputs from
several global locations
Globalization of markets Ans: Merging of historically distinct and
separate national markets into one huge global market;
Globalization of production Ans: Sourcing of goods and services from
locations around the globe to take advantage of national differences in
cost and quality factors of production
Factors of production Ans: inputs into the productive processes of a
firm, including labor management, land, capital, and technological know
how
General Agreement on Tariffs and Trade (GATT) Ans: International
treaty that committed signatures to lowering barriers to the free flow of
goods across national borders and led to the WTO
World Trade Organization Ans: Primarily responsible for policing the
world trading system and making sure nation-states adhere to the rules
laid down in trade treaties signed by WTO member states (97% of world
trade countries)
International Monetary Fund Ans: International institution set up to
maintain order in the international monetary system
United Nations Ans: International organization made up of 193 countries
to promote peace, security, and cooperation
, Page | 2
G20 Ans: Comprises the finance ministers and central bank governors of
the 19 largest economies in the world, plus representatives from the EU
and European Central Bank
International Trade Ans: Occurs when a firm exports goods or services
to consumers in another country
Foreign Direct Investment (FDI) Ans: Direct investment in business
operations in a foreign country
Two factors that underlie trend towards greater globalization Ans:
Declining barriers to international trade and technological chanve
Moore's Law Ans: The power of microprocessor technology doubles and
its costs of production fall in half every 18 months
Stock of FDI Ans: The total accumulated value of foreign-owned assets
at a given time
Multinational Enterprise Ans: A firm that owns business operations in
more than one country
International Business Ans: Any firm that engages in international trade
or investment
Two major forces in the global economy Ans: trade and investment
Political economy Ans: The political, economic, and legal systems of a
country
Political system Ans: System of government in a nation
Collectivism Ans: A political system that emphasizes collective goals as
opposed to individual goals
Socialist Ans: Someone who believes in public ownership of the means
of production for the common good of society
Communists Ans: Those who believe socialism can be achieved only
through revolution and totalitarian dictatorship
