Test Bank for the textbook 1
Ch. 1 Globalization
1. Since Wally's Whistles is a medium-size business, it wouldn't benefit from globalization.
ANS: F
RAT: A company does not have to’ be the’ size of multinational giants to’ facilitate, and’ benefit
from, the’ globalization of markets. In the’ United States, for’ example, according to’ the’
International Trade Administration, more than 300,000 small and’ medium-size firms with fewer than
500 employees exported in 2017, accounting for’ 98 percent of the’ companies that exported that
year.
Dif: 1 Easy
Theme: What Is Globalization?
OBJ: 01-01 Understand’ what is meant by the’ term globalization.
Type: Understand
- Knowledge Application
-- Keyboard Navigation
2. Globalization of production can help companies lower their overall cost structure or improve the’
quality or functionality of their product offering.
ANS: T
RAT: The’ globalization of production refers to’ the’ sourcing of goods and’ services from locations
around the’ globe to’ take advantage of national differences in the’ cost and’ quality of factors of
production. By doing this, companies hope to’ lower their overall cost structure or improve the’
quality or functionality of their product offering, thereby allowing them to’ compete more effectively.
Dif: 1 Easy
Theme: What Is Globalization?
OBJ: 01-01 Understand’ what is meant by the’ term globalization.
Type: Remember
- Analytical Thinking
-- Keyboard Navigation
3. Johann's business does not make consumer products; therefore, it would not be likely to’
participate in global markets.
ANS: F
RAT: Most global markets currently are not markets for’ consumer products—where national
differences in tastes and’ preferences are still often important enough to’ act as a brake on
,Test Bank for the textbook 2
globalization—but markets for’ industrial goods and’ materials that serve a universal need the’ world
over.
Dif: 1 Easy
Theme: What Is Globalization?
OBJ: 01-01 Understand’ what is meant by the’ term globalization.
Type: Remember
- Analytical Thinking
-- Keyboard Navigation
4. Outsourcing is a process that is limited to’ manufacturing enterprises.
ANS: F
RAT: Early outsourcing efforts were primarily confined to’ manufacturing activities. Increasingly,
however, companies are taking advantage of modern communications technology, particularly the’
Internet, to’ outsource service activities to’ low-cost producers in other nations.
Dif: 1 Easy
Theme: What Is Globalization?
OBJ: 01-01 Understand’ what is meant by the’ term globalization.
Type: Remember
- Analytical Thinking
-- Keyboard Navigation
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.
ANS: F
RAT: The’ World Trade Organization is 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. The’ World Bank was set up to’ promote economic development.
Dif: 1 Easy
Theme: What Is Globalization?
OBJ: 01-01 Understand’ what is meant by the’ term globalization.
Type: Understand
- Knowledge Application
-- Keyboard Navigation
,Test Bank for the textbook 3
6. When Cyprus had a financial crisis, it went to’ the’ World Bank, known as the’ lender of last
resort, to’ bail it out.
ANS: F
RAT: The’ IMF was established to’ maintain order in the’ international monetary system. It is often
seen as the’ lender of last resort to’ nation-states whose economies are in turmoil and’ whose
currencies are losing value against those of other nations.
Dif: 1 Easy
Theme: What Is Globalization?
OBJ: 01-01 Understand’ what is meant by the’ term globalization.
Type: Remember
- Knowledge Application
-- Keyboard Navigation
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.
ANS: T
RAT: Although the’ UN is perhaps best known for’ its peacekeeping role, one of the’ organization's
central mandates is the’ promotion of higher standards of living, full employment, and’ conditions of
economic and’ social progress and’ development—all issues that are central to’ the’ creation of a
vibrant global economy.
Dif: 1 Easy
Theme: What Is Globalization?
OBJ: 01-01 Understand’ what is meant by the’ term globalization.
Type: Remember
- Knowledge Application
-- Keyboard Navigation
8. The’ Uruguay Round, finalized in December 1993, reduced protection for’ patents, trademarks,
and’ copyrights.
ANS: F
RAT: Under the’ umbrella of GATT, the’ most recent negotiations to’ be completed, known as the’
Uruguay Round, were finalized in December 1993. The’ Uruguay Round provided enhanced
protection for’ patents, trademarks, and’ copyrights.
Dif: 1 Easy
Theme: Drivers of Globalization
, Test Bank for the textbook 4
OBJ: 01-02 Recognize the’ main drivers of globalization.
Type: Remember
- Knowledge Application
-- Keyboard Navigation
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.
ANS: F
RAT: The’ typical aim of tariffs on imports of manufactured goods was to’ protect domestic
industries from foreign competition. One consequence, however, was "beggar thy neighbor"
retaliatory trade policies, with countries progressively raising trade barriers against each other.
Ultimately, this depressed world demand’ and’ contributed to’ the’ Great Depression of the’ 1930s.
Dif: 1 Easy
Theme: Drivers of Globalization
OBJ: 01-02 Recognize the’ main drivers of globalization.
Type: Understand
- Analytical Thinking
-- Keyboard Navigation
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.
ANS: T
RAT: Foreign direct investment (FDI. occurs when a firm invests resources in business activities
outside its home country.
Dif: 2 Medium
Theme: Drivers of Globalization
OBJ: 01-02 Recognize the’ main drivers of globalization.
Type: Apply
- Knowledge Application
-- Keyboard Navigation
11. World Bank gives aid of $100 million to’ Kenya for’ creating rural health care facilities. This is an
example of foreign direct investment.
ANS: F
