Ibus 310 Exam 1 Notes

Which best describes Detroit Bike's sourcing of components from other countries for assembly in the United States?

globalization of production

Which best describes what takes place when a Chinese supplier of bicycle parts exports bike seats to Detroit Bikes?

international trade

Detroit Bike's strategy has been impacted by tariffs imposed by Donald Trump on parts imported from China. Which institution is responsible for ensuring countries adhere to their trade treaties?

The World Trade Organization

Detroit Bike is located in the United States, assembles its product in the United States, but imports components from China and other countries. Which best describes Detroit Bikes?

an international business

declining trade barriers

better ability to export goods

declining investment barriers

better ability to optimize location economies

enhanced communication technologies

growth in e-commerce

enhanced transportation technologies

lowered distance between countries

producers

arguments for globalization: more markets to sell in.

arguments against: can go bankrupt due to competition

the environment

arguments for globalization: tougher laws lead to lower pollution rates.

arguments against: lack of adequate regulations causes abuse

Consumers

arguments for globalization: more products to choose from

arguments against: don't know how products are made

workers

arguments for globalization: development of better skills

arguments against: loss of jobs due to competition

A common complaint among those pushing back against globalization is that

the benefits of globalization are not evenly distributed among socioeconomic classes

A major factor contributing to the fraying of globalization since 2008 is

more regulations limiting credit

Which socioeconomic group is feeling left behind in the age of globalization?

the lower and middle classes

saudi arabia has what kind of political system?

theocratic totalitarianism

zimbabwe has what kind of political system?

tribal totalitarianism

united states has what kind of political system?

representative democracy

china has what kind of political system?

communist totalitarianism

italy in the 1930's has what kind of political system?

right-wing totalitarianism

france has what kind of political system?

social democracy

How can Venezuela's economic system best be described during Hugo Chavez's years as president?

mixed

how would you characterize Venezuela's political economy under President Nicolas Maduro?

pseudo-democracy

which statement best characterizes the situation in Venezuela?

There is probably a high level of corruption within the government.

Hugo Chavez's move to nationalize troubled firms is consistent with a

mixed economy

benefits of company globalization

-middle-class population growth potential

-free market economy

-first-mover advantage

costs of company globalization

-bribe payments

-infrastructure issues

-resolving contract disputes

risks of company globalization

-unexpected political change

-economic uncertainty

China, India, and Indonesia are expected to be among the world's seven largest economies by 2050. Economic development in a country can be measured using what?

gross national income

By 2050, India will be one of the largest economies in the world. A disadvantage of using data such as GNI and PPP to understand the attractiveness of India as an export or investment market is that they

provide a static picture of development.

India, China, and Indonesia have all focused on improving their education systems and implementing market reforms. Which of the following is true about education and economic development?

India, China, and Indonesia should rank higher on the Human Development Index as compared to countries that have not invested in education.

What is an accurate description of the World Bank?

It focuses on helping developing countries to fight poverty through investments in the underlying structure of the country.

Select the four facts that described the demographics of the global economy up until the 1960s.

-Roughly half of the globe was off-limits to Western international business

-The dominance of large, multinational U.S. firms in the international business scene

-U.S. dominance in the world economy and world trade

-U.S. dominance in world foreign direct investment

The first web browser was introduced to the public when?

1994

Companies rely on containerization to _____.

simplify the transfer of shipments from one form of transport to another

Based on rankings by Forbes in 2003, the second-largest source country of multinational enterprises was _____.

Japan

The opponents of globalization argue that falling barriers to international trade will

eliminate manufacturing jobs in wealthy economies.

Supporters of globalization suggest that a solution to the problem of slow real income growth among the unskilled is _____.

to increase investments in education

Critics of globalization point out that free trade

allows firms to abuse the weak labor and environmental laws in developing countries.

Supporters of globalization argue that bodies such as the World Trade Organization and the United Nations exist to:

serve the collective interests of member states, not to subvert those interests.

Select the four reasons that explain why managing an international business is different from managing a purely domestic business.

-International business must work within government limits

-International transactions involve converting money into different currencies.

-Countries are different.

-The range of problems in international business is wider.

Why are consumer products less likely than industrial products to be a source for the global marketplace?

Differences in consumer tastes

During the 1960s, which country was the predominant world power in terms of foreign direct investment?

the US

One concern voiced by critics of globalization is that

an interdependent global economy shifts economic power away from national governments and toward organizations such as the United Nations.

Global markets for industrial goods such as oil and wheat are more typical than those for consumer products because _____.

industrial goods serve universal needs

Land, labor, capital, and energy are all examples of factors of _____.

production

The World Trade Organization (WTO) is the successor to ______.

GATT

Which of the following are notable trends in the demographics of multinational enterprises since the 1960s?

-The growth of mini-multinationals

-The rise of non-U.S. multinationals

Renata is traveling across Europe and is surprised to find Starbucks, McDonald's, and Coca-Cola in nearly every city she visits. This shows a convergence of consumer tastes, which creates a _____.

globalization of markets

What is a challenge faced by companies entering the global market?

Differences in consumer tastes and preferences

Globalization naturally leads to firms following each other around the world, which then _____.

creates some uniformity across markets

When Jerry started his small appliance manufacturing company in the 1950s, every component part was made in the United States and the product was assembled in the United States. Today, he sources the components from China. The change at this company is an example of the _____.

globalization of production

A(n) ______ is any entity that conducts business in at least two countries.

multinational enterprise

Early outsourcing efforts were mostly limited to _____ activities while today numerous business activities can be outsourced.

manufacturing

What can be an impediment to the globalization of production?

transportation costs

The International Monetary Fund and the World Bank are both examples of _____ that help govern the global business system.

global institutions

Which statement best describes the International Monetary Fund (IMF)?

The IMF is often seen as the lender of last resort to nation states whose economies are in turmoil.

during the 1920s and 1930s, many of the world's nation-states put formidable trade barriers in place. What was the main reason behind these actions?

To protect domestic industries from foreign competition

A U.S.-based shoe company has decided to invest in a British company that specializes in clasps and buckles. This would be an example of _____.

foreign direct investment

Which of these companies is facing an impediment to the globalization of production?

U.S. law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an overseas company.

The International Monetary Fund (IMF) was established to:

ensure the stability of the international monetary system.

How did nation-states react to the economic environment of the 1920s and 1930s?

Trade barriers were increased.

Foreign direct investment occurs when a(n) _____.

investment is made by a company based in one country into a company or entity based in another country.

Trade agreements between nations are another way in which trade barriers have been reduced. Which statement accurately depicts the current state of trade agreements in the world?

While fewer nations are entering into trade agreements, they are lowering their barriers to trade through bartering.

How have tariff rates for manufactured goods been affected by the global efforts of GATT?

Tariff rates fell significantly since 1950.

During the 1960s, U.S. firms created just over _____ of worldwide foreign direct investment and British firms were second accounting for just over 10 percent.

65%