Chapter 01 Globalization Answer Key
m m m m m
Truem/mFalsemQuestions
2-1
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
,1. Amcompanymdoesmnotmneedmamlargemsizemtomfacilitate,mandmbenefitmfrom,mthemglobalizationmofm
markets.m
m
TRUE
Amcompanymdoesmnotmhavemtombemthemsizemofmmultinationalmgiantsmtomfacilitate,mandmbenefitmf
rom,mthemglobalizationmofmmarkets.mInmthemUnitedmStates,mformexample,mnearlym90mpercentmofm
firmsmthatmexportmaremsmallmbusinessesmemployingmlessmthanm100mpeople,mandmtheirmsharemofm
totalmU.S.m
exportsmhasmgrownmsteadilymovermthempastmdecademtomnowmexceedm20mpercent.
2. Companiesmhopemtomlowermtheirmoverallmcostmstructuremormimprovemthemqualitymormfunctionalitymo
fm
theirmproductmofferingmthroughmglobalizationmofmproduction.m
m
TRUE
Themglobalizationmofmproductionmrefersmtomthemsourcingmofmgoodsmandmservicesmfrommlocationsma
roundmthemglobemtomtakemadvantagemofmnationalmdifferencesminmthemcostmandmqualitymofmfactorsm
ofmproduction.mBymdoingmthis,mcompaniesmhopemtomlowermtheirmoverallmcostmstructuremormimprovem
themqualitymormfunctionalitymofmtheirmproductmoffering,mtherebymallowingmthemmtomcompetemmorem
effectively.
3. Themmostmglobalmmarketsmcurrentlymaremmarketsmformconsumermproducts.m
m
FALSE
Themmostmglobalmmarketsmcurrentlymaremnotmmarketsmformconsumermproducts—
wheremnationalmdifferencesminmtastesmandmpreferencesmaremstillmoftenmimportantmenoughmtomac
tmasmambrakemonmglobalization—
butmmarketsmformindustrialmgoodsmandmmaterialsmthatmservemamuniversalmneedmthem
worldmover.
2-2
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
,4. Outsourcingmismamprocessmthatmismlimitedmtommanufacturingmenterprises.m
m
FALSE
Earlymoutsourcingmeffortsmweremprimarilymconfinedmtommanufacturingmactivities.mIncreasingly,mho
wever,mcompaniesmaremtakingmadvantagemofmmodernmcommunicationsmtechnology,mparticularlymt
hemInternet,mtomoutsourcemservicemactivitiesmtomlow-costmproducersminmothermnations.
5. ThemWorldmBankmhasmfocusedmonmpolicingmthemworldmtradingmsystemmandmmakingmsuremnation-
statesmadheremtomthemrulesmlaidmdownminmtrademtreaties.m
m
FALSE
ThemWorldmTrademOrganizationmismprimarilymresponsiblemformpolicingmthemworldmtradingmsyste
mmandmmakingmsuremnation-
statesmadheremtomthemrulesmlaidmdownminmtrademtreatiesmsignedmbymWTOm
membermstates.mThemWorldmBankmwasmsetmupmtompromotemeconomicmdevelopment.
6. ThemWorldmBankmismknownmasmthemlendermofmthemlastmresort.m
m
FALSE
ThemIMFmwasmestablishedmtommaintainmorderminmtheminternationalmmonetarymsystem.mItmismofte
nmseenmasmthemlendermofmlastmresortmtomnation-
statesmwhosemeconomiesmareminmturmoilmandmwhosemcurrenciesmaremlosingmvaluemagainstmthose
m ofmothermnations.
2-3
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
, 7. OnemofmthemUN'smcentralmmandatesmismthempromotionmofmhighermstandardsmofmliving,mfullm
employment,mandmconditionsmofmeconomicmandmsocialmprogressmandmdevelopment.m
m
TRUE
AlthoughmthemUNmismperhapsmbestmknownmformitsmpeacekeepingmrole,monemofmthemorganization
'smcentralmmandatesmismthempromotionmofmhighermstandardsmofmliving,mfullmemployment,mandmc
onditionsmofmeconomicmandmsocialmprogressmandmdevelopment—
allmissuesmthatmaremcentralmtom
themcreationmofmamvibrantmglobalmeconomy.
8. ThemUruguaymRound,mfinalizedminmDecemberm1993,mreducedmprotectionmformpatents,mtrademarks
,m
andmcopyrights.m
m
FALSE
UndermthemumbrellamofmGATT,mthemmostmrecentmnegotiationsmtombemcompleted,mknownmasmthem
UruguaymRound,mweremfinalizedminmDecemberm1993.mThemUruguaymRoundmprovidedmenhancedm
protectionmformpatents,mtrademarks,mandmcopyrights.
9. "Beggarmthymneighbor"mretaliatorymtradempoliciesminvolvedmcountriesmprogressivelymloweringmtrade
m
barriersmagainstmeachmother,mwhichmcontributedmtomthemGreatmDepressionmofmthem1930s.m
m
FALSE
Themtypicalmaimmofmtariffsmonmimportsmofmmanufacturedmgoodsmwasmtomprotectmdomesticmindu
striesmfrommforeignmcompetition.mOnemconsequence,mhowever,mwasm"beggarmthymneighbor"mret
aliatorymtradempolicies,mwithmcountriesmprogressivelymraisingmtradembarriersmagainstmeachmoth
er.mUltimately,mthismdepressedmworldmdemandmandmcontributedmtomthemGreatmDepressionmofm
them1930s.
2-4
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
m m m m m
Truem/mFalsemQuestions
2-1
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
,1. Amcompanymdoesmnotmneedmamlargemsizemtomfacilitate,mandmbenefitmfrom,mthemglobalizationmofm
markets.m
m
TRUE
Amcompanymdoesmnotmhavemtombemthemsizemofmmultinationalmgiantsmtomfacilitate,mandmbenefitmf
rom,mthemglobalizationmofmmarkets.mInmthemUnitedmStates,mformexample,mnearlym90mpercentmofm
firmsmthatmexportmaremsmallmbusinessesmemployingmlessmthanm100mpeople,mandmtheirmsharemofm
totalmU.S.m
exportsmhasmgrownmsteadilymovermthempastmdecademtomnowmexceedm20mpercent.
2. Companiesmhopemtomlowermtheirmoverallmcostmstructuremormimprovemthemqualitymormfunctionalitymo
fm
theirmproductmofferingmthroughmglobalizationmofmproduction.m
m
TRUE
Themglobalizationmofmproductionmrefersmtomthemsourcingmofmgoodsmandmservicesmfrommlocationsma
roundmthemglobemtomtakemadvantagemofmnationalmdifferencesminmthemcostmandmqualitymofmfactorsm
ofmproduction.mBymdoingmthis,mcompaniesmhopemtomlowermtheirmoverallmcostmstructuremormimprovem
themqualitymormfunctionalitymofmtheirmproductmoffering,mtherebymallowingmthemmtomcompetemmorem
effectively.
3. Themmostmglobalmmarketsmcurrentlymaremmarketsmformconsumermproducts.m
m
FALSE
Themmostmglobalmmarketsmcurrentlymaremnotmmarketsmformconsumermproducts—
wheremnationalmdifferencesminmtastesmandmpreferencesmaremstillmoftenmimportantmenoughmtomac
tmasmambrakemonmglobalization—
butmmarketsmformindustrialmgoodsmandmmaterialsmthatmservemamuniversalmneedmthem
worldmover.
2-2
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
,4. Outsourcingmismamprocessmthatmismlimitedmtommanufacturingmenterprises.m
m
FALSE
Earlymoutsourcingmeffortsmweremprimarilymconfinedmtommanufacturingmactivities.mIncreasingly,mho
wever,mcompaniesmaremtakingmadvantagemofmmodernmcommunicationsmtechnology,mparticularlymt
hemInternet,mtomoutsourcemservicemactivitiesmtomlow-costmproducersminmothermnations.
5. ThemWorldmBankmhasmfocusedmonmpolicingmthemworldmtradingmsystemmandmmakingmsuremnation-
statesmadheremtomthemrulesmlaidmdownminmtrademtreaties.m
m
FALSE
ThemWorldmTrademOrganizationmismprimarilymresponsiblemformpolicingmthemworldmtradingmsyste
mmandmmakingmsuremnation-
statesmadheremtomthemrulesmlaidmdownminmtrademtreatiesmsignedmbymWTOm
membermstates.mThemWorldmBankmwasmsetmupmtompromotemeconomicmdevelopment.
6. ThemWorldmBankmismknownmasmthemlendermofmthemlastmresort.m
m
FALSE
ThemIMFmwasmestablishedmtommaintainmorderminmtheminternationalmmonetarymsystem.mItmismofte
nmseenmasmthemlendermofmlastmresortmtomnation-
statesmwhosemeconomiesmareminmturmoilmandmwhosemcurrenciesmaremlosingmvaluemagainstmthose
m ofmothermnations.
2-3
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
, 7. OnemofmthemUN'smcentralmmandatesmismthempromotionmofmhighermstandardsmofmliving,mfullm
employment,mandmconditionsmofmeconomicmandmsocialmprogressmandmdevelopment.m
m
TRUE
AlthoughmthemUNmismperhapsmbestmknownmformitsmpeacekeepingmrole,monemofmthemorganization
'smcentralmmandatesmismthempromotionmofmhighermstandardsmofmliving,mfullmemployment,mandmc
onditionsmofmeconomicmandmsocialmprogressmandmdevelopment—
allmissuesmthatmaremcentralmtom
themcreationmofmamvibrantmglobalmeconomy.
8. ThemUruguaymRound,mfinalizedminmDecemberm1993,mreducedmprotectionmformpatents,mtrademarks
,m
andmcopyrights.m
m
FALSE
UndermthemumbrellamofmGATT,mthemmostmrecentmnegotiationsmtombemcompleted,mknownmasmthem
UruguaymRound,mweremfinalizedminmDecemberm1993.mThemUruguaymRoundmprovidedmenhancedm
protectionmformpatents,mtrademarks,mandmcopyrights.
9. "Beggarmthymneighbor"mretaliatorymtradempoliciesminvolvedmcountriesmprogressivelymloweringmtrade
m
barriersmagainstmeachmother,mwhichmcontributedmtomthemGreatmDepressionmofmthem1930s.m
m
FALSE
Themtypicalmaimmofmtariffsmonmimportsmofmmanufacturedmgoodsmwasmtomprotectmdomesticmindu
striesmfrommforeignmcompetition.mOnemconsequence,mhowever,mwasm"beggarmthymneighbor"mret
aliatorymtradempolicies,mwithmcountriesmprogressivelymraisingmtradembarriersmagainstmeachmoth
er.mUltimately,mthismdepressedmworldmdemandmandmcontributedmtomthemGreatmDepressionmofm
them1930s.
2-4
Copyrightm©m2017mMcGraw-
HillmEducation.mAllmrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-HillmEducation.
