Question 1

Which of the following best describes the concept of 'globalization of markets' as discussed in the study materials?

Accepted Answer

It is the convergence of buyer preferences in markets around the world, reducing marketing costs and creating new market opportunities.

Question 2

According to the study materials, which of the following is a key force driving globalization?

Accepted Answer

Technological innovation, such as advancements in transportation and communication.

Question 3

Which organization was created to promote free trade by reducing tariffs and non-tariff barriers, and later expanded to include intellectual property rights?

Accepted Answer

World Trade Organization (WTO)

Question 4

A multinational corporation (MNC) is best defined as:

Accepted Answer

A company that has direct investments abroad in multiple countries and manages production or delivers services in more than one nation.

Question 5

Suppose a country reduces its tariffs on imported goods. According to the study materials, what is a likely effect on domestic consumers?

Accepted Answer

Domestic consumers will have access to a greater variety of goods at lower prices.

Question 6

Which of the following is NOT a criticism of globalization mentioned in the study materials?

Accepted Answer

Globalization creates new market opportunities for businesses.

Question 7

If a firm is able to quickly shift production to countries with lower labor costs, which advantage of globalization is it utilizing?

Accepted Answer

Labor market flexibility in developed nations.

Question 8

Which of the following equations correctly represents Gross Domestic Product (GDP) as described in the study materials?

Accepted Answer

$GDP = C + I + G + (X - M)$

Question 9

A company that adopts a global perspective from its first day of operation is best described as:

Accepted Answer

A born global firm.

Question 10

Which of the following is a plausible negative effect of globalization on jobs and wages in developed nations?

Accepted Answer

It eliminates good-paying manufacturing jobs as firms move production abroad.

Question 11

According to the study materials, which of the following is a benefit of technological innovation for globalization?

Accepted Answer

It makes it easier, faster, and less costly to move data, goods, and equipment around the world.

Question 12

Which of the following statements about income inequality and globalization is supported by the study materials?

Accepted Answer

Globalization critics argue that it widens the gap in average incomes between rich and poor nations.

Question 13

A country joins a regional trade agreement such as NAFTA. According to the study materials, what is a likely outcome?

Accepted Answer

Trade barriers between member nations are reduced, increasing trade and investment.

Question 14

Which of the following is an example of how globalization can impact the environment, as discussed in the study materials?

Accepted Answer

Globalization can create a 'race to the bottom' in environmental regulations as nations compete to attract investment.

Question 15

Suppose a multinational corporation (MNC) is considering investing in a developing nation. Which of the following is a potential benefit for the host country?

Accepted Answer

Increased jobs, investment, and tax revenue.

Question 16

Which of the following best describes the role of the International Monetary Fund (IMF) in globalization?

Accepted Answer

It promotes international monetary cooperation and facilitates the expansion and balanced growth of international trade.

Question 17

A firm is deciding whether to locate its production in a country with lower labor costs but higher transportation costs. Which economic principle should the firm consider to maximize profit?

Accepted Answer

Comparative advantage.

Question 18

Which of the following is a plausible argument in favor of globalization, according to the study materials?

Accepted Answer

Globalization increases wealth and efficiency in all nations by creating new market opportunities and lowering costs.

Question 19

If a country experiences an increase in foreign direct investment (FDI) due to globalization, which of the following is a likely effect on its GDP?

Accepted Answer

GDP will increase due to higher investment and production.

Question 20

Which of the following is a real-world example of how technological innovation supports globalization?

Accepted Answer

The use of email and videoconferencing to coordinate operations across borders, reducing costs and increasing efficiency.

Global Business Environment

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