Chapter 03
National Differences in Economic Development
True / False Questions
1. GNI allows a more direct comparison of living standards in different countries.
True False
2. In Sen's view, development is an economic process that should be assessed by material output measure...
1. A company does not need a large size to facilitate, and benefit from, the globalization of
markets.
True False
2. Companies hope to lower their overall cost structure or improve the quality or
functionality of their product offering through globalization of production.
True False
3. The most global markets currently are markets for consumer products.
True False
4. Outsourcing is a process that is limited to manufacturing enterprises.
True False
5. The World Bank has focused on policing the world trading system and making sure
nation-states adhere to the rules laid down in trade treaties.
True False
6. The World Bank is known as the lender of the last resort.
True False
7. One of the UN's central mandates is the promotion of higher standards of living, full
employment, and conditions of economic and social progress and development.
True False
8. The Uruguay Round, finalized in December 1993, reduced protection for patents,
trademarks, and copyrights.
True False
9. "Beggar thy neighbor" retaliatory trade policies involved countries progressively
lowering trade barriers against each other, which contributed to the Great Depression of
the 1930s.
,10. Rivers Inc., a U.S. based sports apparel manufacturer, sets up a production unit in China
to take advantage of the lower labor costs there. This is an example of foreign direct
investment.
True False
11. World Bank gives an aid of 100 million dollars to Kenya for creating rural health care
facilities. This is an example of foreign direct investment.
True False
12. The lowering of barriers to international trade enables firms to view the world, rather
than a single country, as their market.
True False
13. According to WTO data, the volume of world merchandise trade has grown faster than
the world economy since 1950.
True False
14. The cost of microprocessors continues to fall, while their power increases. This
statement supports the predictions made by Moore's Law.
True False
15. Non-U.S. firms increasingly began to invest across national borders because they wanted
to disperse production activities to optimal locations and to build a direct presence in
major foreign markets.
True False
16. A current trend in international business is the decline of medium-sized and small
multinationals, known as mini-multinationals.
True False
17. The globalization of the world economy has resulted in a relative increase in the
dominance of U.S. firms in the global marketplace.
True False
18. Doing business in Russia involves risks because the country has shown signs of shifting
back toward greater state involvement in economic activity and authoritarian
government.
True False
19. Globalization critics argue that the decline in unskilled wage rates is due to the migration
of low-wage manufacturing jobs offshore and a corresponding reduction in demand for
unskilled workers.
, 20. Evidence suggests that technological change has had a bigger impact than globalization
on the declining share of national income enjoyed by labor.
True False
21. According to supporters of free trade, as countries get richer they commit greater
violation of environmental and labor regulations.
True False
22. According to critics of globalization, today's interdependent global economy limits a
nation's national sovereignty.
True False
23. Supporters of debt relief argue that new democratic governments in poor nations should
not be forced to honor debts incurred by corrupt and dictatorial predecessors.
True False
24. A firm does not have to become a multinational enterprise to engage in international
business.
True False
25. Managing an international business is much easier than managing a domestic business.
True False
Multiple Choice Questions
26. The shift toward a more integrated and interdependent world economy is referred to as
_____.
A. outsourci
ng
B. international
marketing
C. privatizati
on
D. globalizati
on
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