D080 Pre-Assessment Questions and Answers

Which negative outcome on political systems comes from globalization? - Creation of isolationist policies Which factor results in a higher rate of globalization? - Reduced trade barriers What are the four factors in Ghemawat's CAGE analysis? - Culture, administration, geography, economy What is a major drawback to the home country when companies outsource manufacturing jobs to countries with lower worker wages? - Loss of manufacturing jobs A country has a characteristic traditional economic system with poor infrastructure 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. What is a characteristic of a market economy? - Firms seek to maximize profi ts. Which impact does Islamic law directly have on businesses? - It forbids charging interest. Which institution helps to maintain availability of global financing to solve trade deficit issues? - International Monetary Fund What is the current focus of the World Bank? - Improving quality of life For which concern has the World Trade Organization been criticized? - Adoption of labor standards protecting labor rights 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. Two countries agree to open their borders to international business transactions with one another without tariffs. How does this affect global business? - It leads to developing free trade policies with strategic partners. 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. What was the economic impact of the North American Free Trade Agreement (NAFTA)? - The shift of jobs away from low comparative advantage industries A company that is located in Country A would like to sell products in Country B. The government of Country B is pushing for a tariff-based international 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. 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 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. What is a purpose of a country implementing trade protectionism? - To protect an infant industry 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? - Provide tax exemptions Which level of regional economic integration is a key feature of a Customs Union? - Unified trading policies with non-members What is a drawback of creating regional trade agreements? - They shift employment opportunities. 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. 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 telecommunications market by investing in local companies in the region through acquisition. Which alliance supports this director's suggestion? - Central America Free Trade Agreement A firm based in Country A manufactures its products in Country B and pays the manufacturing employees in the currency in which they are located. Which currency situation will result in the maximum profit for the firm? - The currency in Country A is strong relative to the currency in Country B. Which drawback is associated with regional economic integration? - Increased exclusive internal trade Which factor contributes to the creation of a monopoly? - Control of natural resources Which convention provides gap fillers for terms that may not be expressly stated in agreements between two companies? - Contracts for the International Sale of Goods Which laws are violated by practices such as price-fixing, price discrimination, restraints, and monopolization? - Anti-trust An international company's consumers are demanding that the owners make socially ethical business decisions concerning their packaging, but the company is finding that the suggested green modifications are increasing the costs of producing the product. Which concern is this company facing by meeting these ethical demands? - Decreased profitability A business is entering a global market at the same time it has been trying to improve its level of corporate social responsibility (CSR). Which CSR goal should this company remember during this process? - Increase shareholder trust via high ethical standards A company would like to expand its corporate social responsibility (CSR) initiatives to a global level. Which strategy should the company use to meet this goal? - Engage stakeholders on the issue of air quality An individual is encouraged to provide a small, quiet fee to local offi cials to get some critical work doneoverseas for a global offi ce. The individual was told that this would greatly expedite the work. Theindividual took that advice, and the work was completed, but the manager in the United States was upsetwith the action and called the individual to discuss the matter.