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Smartbook Chapter 1, 2, 3 Study Notes
1.) Global markets for industrial goods such as oil and wheat are more typical than those for
consumer products because _____.
Answer: industrial goods serve universal needs
2.) Land, labor, capital, and energy are all examples of factors of _____.
Answer: production
3.) A country with high _____ has a barrier to international trade.
Answer: tariffs on imports of foreign goods
4.) Early outsourcing efforts were mostly limited to _____ activities while today numerous
business activities can be outsourced.
Answer: manufacturing
5.) What is an accurate description of the globalization of production?
Answer: Locating each stage of production where it can be done most economically
6.) Which of these companies is facing an impediment to the globalization of production?
Answer: US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an
overseas company.
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7.) The International Monetary Fund and the World Bank are both examples of _____ that help
govern the global business system.
Answer: global institutions
8.) What is a challenge faced by companies entering the global market?
Answer: Differences in consumer tastes and preferences
9.) Which organization ensures that nation-states comply to the rules associated with trade
treaties signed by member states?
Answer: The World Trade Organization
10.) The Johnson Automotive Group recently closed two of its US manufacturing facilities and
opened a new facility in Asia to take advantage of lower labor costs and savings in energy
costs. The company made this change in order to benefit from _____.
Answer: factors of production
11.) True or False: The International Monetary Fund (IMF) was established to ensure the
stability of the international monetary system.
Answer: True
12.) Advances in _____ technology make it possible for companies to outsource customer
service operations to another country.
Answer: communication
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13.) When global institutions were introduced in the 1940s, governments in struggling nations
would turn to the _____ for low-interest loans needed for infrastructure projects such as
building roads.
Answer: World Bank
14.) What can be an impediment to the globalization of production?
Answer: transportation costs
15.) Global institutions are needed to
Answer: stabilize and monitor the global marketplace.
16.) In return for offering loans, the International Monetary Fund (IMF) Answer: enforces its
economic policies on nations.
17.) The World Trade Organization (WTO) is the successor to ______.
Answer: GATT
18.) The ______ was established on October 24, 1945. Today, one of its key purposes is to
maintain international peace and security.
Answer: United Nations
19.) Which statement best describes the International Monetary Fund (IMF)?
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Answer: The IMF is often seen as the lender of last resort to nation-states whose economies are
in turmoil.
20.) Foreign direct investment occurs when a(n)
Answer: investment is made by a company based in one country into a company or entity based
in another country.
21.) What is an accurate description of the World Bank?
Answer: It focuses on helping developing countries to fight poverty through investments in the
underlying structure of the country.
22.) The International Monetary Fund (IMF) has been criticized forAnswer: minimizing a
nation's sovereignty.
23.) True or false: Experts forecast that world trade will continue to decline more rapidly than
world production.
Answer: False - World trade is expected to increase more rapidly than world production for the
foreseeable future
24.) International trade occurs when a firm _____.
Answer: exports goods or services to consumers in another country.
25.) What are three things that result from the fact that the volume of world trade has been
growing faster than world GDP?
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Answer: -economies of nation-states are becoming more intertwined
-more firms are dispersing parts of their production process around the globe
-world has become significantly wealthier
26.) The globalization of markets and production implies that
Answer: domestic firms are facing intense competition from foreign firms.
27.) We live in an ever-increasing knowledge society. How does this affect international trade?
Answer: Consumers know more about goods made worldwide which drives demand for those
goods.
28.) Using the results from Figure 1.1 in the text, it is evident that as the number of regional
trade agreements goes up, world trade across country borders tends to _____.
Answer: also go up
29.) Since 1970, the average yearly outflow of foreign direct investment has _____.
Answer: increased
30.) Just a few decades ago, it would have cost a business much more money to find buyers in a
foreign country. What has helped lower the cost of this process and allows buyers and
sellers to easily find each other regardless of their location?
Answer: internet
31.) True or false: While lowering trade barriers initially made global production possible, the
advent of technology made globalization a reality.
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Answer: True
32.) In terms of innovation in transportation technology occurring since the 1950s, the
development of
_____ has essentially reduced the size of our entire world. (Check the two that apply.)
Answer: commercial jets
superfreighters
33.) A refrigerator parts manufacturer in China receives an order and loads the goods into a
large receptacle that is then loaded on a ship headed for the United States. When the ship
docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in
Iowa. This scenario shows how _____ made the delivery of goods in the global
marketplace much easier.
Answer: containerization
34.) During the 1960s, which country was the predominant world power in terms of foreign
direct investment?
Answer: the U.S
35.) The decline of the United States standing in industrial power since the 1960s, is considered
a relative decline because it is a reflection of
Answer: the faster economic growth of other economies
36.) As the barriers to the free flow of goods, services, and capital fell during the 1970s, one
motivation for foreign direct investment by non-US firms was the desire to
Answer: move production activities to more desirable locations.
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37.) The stock of foreign direct investment refers to the ______ of foreign investments.
Answer: total cumulative value
38.) there have been two notable trends in the demographics of multinational enterprises since
the 1960s. These include _____.
Answer: the rise of non-US
multinationals the growth of mini-
multinationals
39.) Select the four facts that described the demographics of the global economy up until the
1960s.
Answer: U.S. dominance in world foreign direct investment
The dominance of large, multinational U.S. firms in the international business scene
Roughly half of the globe was off-limits to Western international business
U.S. dominance in the world economy and world trade
40.) In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S.
position compare today?
Answer: It has diminished industrial power.
41.) A country's stock of foreign direct investment is the total cumulative value of foreign
investments that are taken as a percentage of that country's _____.
Answer: GDP
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42.) A(n) ______ is any entity that conducts business in at least two countries.
Answer: multinational enterprise
43.) According to the critics of globalization, what are two results from falling trade barriers?
Answer: A depression of wages in developed nations
The destruction of manufacturing jobs in advanced economies
44.) Studies exploring the share of labor in national income over the last two decades show that
the share of national income accounted for by skilled labor has
Answer: increased
45.) Evidence suggests that _____ has impacted the declining share of national income enjoyed
by labor more so than globalization has.
Answer: technological change
46.) One concern voiced by critics of globalization is that
Answer: an interdependent global economy shifts economic power away from national
governments and toward organizations such as the United Nations.
47.) According to critics of globalization, increased free trade and investment over the past few
decades have
Answer: broadened the gap between the rich and poor nations.
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48.) By the end of the 1970s in Great Britain, state-owned companies monopolized the
telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of
which political system in place at the time?
Answer: social democracy
49.) How are monopolies viewed in a market economy?
Answer: Monopolies are considered a negative force as they can restrict output and increase
prices.
50.) The political economy of a country refers to the interaction of the political, economic, and
_____ systems of a country.
Answer: legal
51.) Political systems that emphasize individualism tend to promote _____.
Answer: democracy
52.) ______ refers to a political system that values the needs of society over that of an
individualAnswer: collectivism
53.) Plato would have agreed that society should be stratified into classes and ______ were best
suited to rule society.
Answer: philosophers and soldiers
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54.) in the early 20th century, communists differed from social democrats in that communists
believed in
Answer: a strategy of revolutionary action.
55.) ______ refers to the process of selling state-owned enterprises to private investors.
Answer: privatization
56.) ______ refers to a philosophy that promotes the free exercise of one's goals and desires in
economic and political pursuits
Answer: individualism
57.) Identify the accurate statement about individualism.
Answer: It stresses that society should be based on individual economic and political freedoms.
58.) Which statement BEST describes a totalitarian system?
Answer: It is a form of government in which the state recognizes no limits to its authority and
strives to regulate all aspects of public and private life.
59.) China and Vietnam have experienced greater individual freedom in the economic sphere;
however, this is not a reflection of the presence of a(n) _____.
Answer: democracy
60.) Nations adopting the pure form of democracy would
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Answer: directly involve citizens in the decision making of the country.
61.) What condition paves the way for an ideal representative democracy?
Answer: Universal adult suffrage
62.) Which characteristic is typical within a totalitarian country?
Answer: There is no questioning of the ruler's decisions.
63.) Under Vladimir Putin, the government of Russia has becoming increasingly _____.
Answer: totalitarian
64.) Theocratic totalitarianism is described as a political system
Answer: in which rulers govern based on religious rules and principles.
65.) In a nation where right-wing totalitarianism is present, you would find that
Answer: political freedom is restricted, frequently on the grounds that it would lead to the rise of
communism.
66.) A pseudo-democracy is the term given to a nation in which
Answer: A pseudo-democracy is the term given to a nation in which
67.) Along the continuum between democracy and totalitarianism, it can be said that
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Answer: it is possible to have a democratic state in which some degree of collectivism exists.
68.) In a market economy, the government's role is to
Answer: encourage free and fair competition and minimize restrictive business practices.
69.) The production of goods in a pure market economy are determined by
Answer: supply and demand
70.) What is the objective of a pure command economy?
Answer: allotment of resources for the overall good of society
71.) Which Greek philosopher is credited with advocating the origins of collectivism?
Answer: Plato
72.) While a pure command economy is thought to be based on the collective good of a society,
it often results in
Answer: state-owned enterprises that have fewer reasons to control costs.
73.) In a ______ economy, both private enterprise and state ownership co-exist.
Answer: mixed
74.) ______ measures the total annual income received by residents of a country.
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Answer: Gross national income
75.) The process of privatization fails to perform as expected when
Answer: newly privatized firms are protected from foreign competition.
76.) The ______ adjustment helps provide a more direct comparison of the living standards
found in different countries.
Answer: purchasing power parity
77.) The base used to make the purchasing power parity adjustment isAnswer: the cost of living
in the United States.
78.) In some countries, barter agreements take the place of cash transactions and this skews the
"official" economic activity figures. This is referred to as _____.
Answer: the shadow economy
79.) he Human Development Index is based onAnswer: life expectancy at birth.
80.) One thing the Human Development Index does not assess but which Amartya Sen believes
should be included to determine development is
Answer: political freedoms
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81.) When analyzing the process of innovation, it can be said that itAnswer: goes hand-in-hand
with entrepreneurship.
82.) One positive aspect of innovation is that it
Answer: increases the economic activity within a country.
83.) Which businessperson is an example of an entrepreneur?
Answer: Natalia, the CEO and founder of Mountain Top Inc., an adventure travel company
84.) Innovators and entrepreneurs flourish most in a _____ because _____.
Answer: market economy; it grants existing businesses and entrepreneurs the freedom to
improve their operations through innovation
85.) Jeffrey Sachs argued that the ______ of a nation can have an impact on economic
development.
Answer: geography
86.) Sachs would agree that _____ helps explain why Malaysia and Singapore have been able to
overcome the issues associated with their tropical geography and achieve economic growth
faster than some tropical nations in Africa.
Answer: education
87.) ______ is one of the steps necessary for a country to shift toward a market-based economic
system.
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Answer: privatization
88.) What is an example of a transaction that would take place in the shadow economy of a
country?
Answer: To avoid paying the federal gift tax, the broker advised his client to transfer the funds
without declaring them as a gift.
89.) ______ involves removing legal restrictions, typically in the economic sphere.
Answer: deregulation
90.) Privatization became a worldwide practice starting in the
Answer: 1980s
91.) The long-run monetary benefits of doing business in a country are influenced by
theAnswer: purchasing power of consumers.
92.) When comparing early and late entrants into a market, it can be said that
Answer: early entrants build brand loyalty and gain experience in a country's business practices.
93.) It would probably be _____ costly to do business in a relatively underdeveloped economy
Answer: more
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94.) The likelihood that political forces will cause drastic changes in a country's business
environment and adversely affect the potential for a company to make a profit is called a
_____ risk.
Answer: political
95.) Which statement accurately describes the effects of social unrest on a country?
Answer: Social unrest can result in abrupt changes in government which tend to have negative
economic implications.
96.) True or False: Economic risks are independent of political risks.
Answer: False
97.) One indicator of economic mismanagement in a country is the
Answer: rate of inflation
98.) The privatization movement was started in
Answer: Great Britain in the 1980s with the sale of British Telecom.
99.) A(n) ______ risk is one that arises from failure to follow statutory or regulatory obligations
and, therefore, one that can impact a trading partner.
Answer: legal
100.) It is ____________ for the government to expropriate profits from innovation through
excessive taxation.
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Answer: legal
101.) A country's economic system and property rights regime are _____ predictors of economic
prospects.
Answer: good
102.) When assessing country attractiveness, the costs might include _____.
Answer: corruption
103.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
Answer: TRUE
104.) The total annual income received by residents of a single nation is reflected in which
official measure?
Answer: gross national income
105.) declining trade barriers
Answer: better ability to export goods
106.) declining investment barriers
Answer: better ability to optimize location economies
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107.) enhanced communication technologies
Answer: growth in e commerce
108.) enhanced transportation technologies
Answer: lowered distance between countries
109.) Arguments for and against globalization: producers
Answer: -more markets to sell in
-can go bankrupt due to competition
110.) Arguments for and against globalization: the environment
Answer: -tougher laws lead to lower pollution rates
-lack of adequate regulation leads to abuse
111.) Arguments for and against globalization: consumers
Answer: -more products to choose from
-don't know how to products are made
112.) Arguments for and against globalization: workers
Answer: -development of better skills
-loss of jobs due to competition
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113.) The primary reason Apple established production facilities in China for its iPhone was to
capitalize on
Answer: the ability of subcontractors to rapidly respond to changes in demand.
114.) Apple sources parts for its iPhone from around the world before assembling the phones in
China.
This reflects the
Answer: globalization of production.
115.) The main factor driving Apple's decision to locate its iPhone production in China was
Answer: speed
116.) A common complaint among those pushing back against globalization is that
Answer: the benefits of globalization are not evenly distributed among socioeconomic classes.
117.) A major factor contributing to the fraying of globalization since 2008 isAnswer: more
regulations limiting credit.
118.) Which socioeconomic group is feeling left behind in the age of globalization?
Answer: the lower and middle classes
119.) Political system:
Right-wing Totalitarianism
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Tribal Totalitarianism
Pseudo Democracy
Communist Totalitarianism
Representative Democracy
Theocratic Totalitarianism
Answer: Country:
Germany in the 1930s
Kenya
Russia
China
U.S.
Saudi Arabia
120.) How can Venezuela's economic system best be described during Hugo Chavez's years as
president?
Answer: mixed
121.) Using the information on political economy in your text and the case above, how would
you characterize Venezuela's political economy under President Hugo Chávez?
Answer: communist totalitarianism
122.) Based on the information on political economy in the text and the case on Venezuela above,
whichstatement best characterizes the situation in Venezuela?
Answer: There is probably a high level of corruption within the government.
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123.) Hugo Chavez's move to nationalize troubled firms is consistent with a
Answer: mixed economy
124.) According to the video, the standard of living in the United States is _____ as compared to
that of China.
Answer: higher
125.) if gross national income per capita adjusted for differences in the cost of living is about
$13,000 in China, a developing country, and is about $56,000 in the United States, a
developed country, then
Answer: on average, Americans can afford more goods and services than their Chinese
counterparts.
126.) GNI figures are helpful in understanding an economy because they
Answer: tell us how poor a country is relative to another
127.) One reason why a global market does not fully exist is _____.
Answer: differences in legal regulations among national markets
128.) The United Nations was established by _____ countries committed to preserving peace
through economic cooperation and trade support.
Answer: 51
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129.) The increasing number of trade agreements in place around the world creates a(n) _____ in
world trade.
Answer: increase
130.) The ______ has developed into the information backbone of the global economy and
reduced the constraints of location, scale, and time zone.
Answer: internet
131.) Creating and managing a globally dispersed production system is made easier by the
______ in costs of information processing and communication.
Answer: decrease
132.) Based on rankings by Forbes in 2003, the second-largest source country of multinational
enterprises was _____.
Answer: Japan
133.) if you were to describe the global economy of the twenty-first century, it would be accurate
to say that
Answer: more nations are becoming part of the developed world.
134.) true or false: Russia, as it is today, is an example of a pseudo-democracy.
Answer: true - Under Vladimir Putin, Russia limits the political and civil liberties of opposition
groups, yet voices opposing his rule are still heard.
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135.) What economic tactic was used when former communist countries removed price controls
and allowed prices to be set as the result of supply and demand?
Answer: deregulation
136.) A(n) ______ risk is the chance that conditions like a change in exchange rates will affect an
investment.
Multiple choice question.
Answer: economic
137.) Legal risk is evident in a country that has _____.
Answer: a violation of property rights
138.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
True false question.
Answer: True
139.) Even though there are many state-owned businesses in China, many Western businesses
feel that they should still invest in the country because
Answer: the nation is moving toward a market-based system.
140.) True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the
full value of their labor.
Answer: false
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120.) Global markets for industrial goods such as oil and wheat are more typical than those for
consumer products because _____.
Answer: industrial goods serve universal needs
121.) Land, labor, capital, and energy are all examples of factors of _____.
Answer: production
122.) A country with high _____ has a barrier to international trade.
Answer: tariffs on imports of foreign goods
123.) Early outsourcing efforts were mostly limited to _____ activities while today numerous
business activities can be outsourced.
Answer: manufacturing
124.) What is an accurate description of the globalization of production?
Answer: Locating each stage of production where it can be done most economically
125.) Which of these companies is facing an impediment to the globalization of production?
Answer: US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an
overseas company.
126.) The International Monetary Fund and the World Bank are both examples of _____ that help
govern the global business system.
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Answer: global institutions
127.) What is a challenge faced by companies entering the global market?
Answer: Differences in consumer tastes and preferences
128.) Which organization ensures that nation-states comply to the rules associated with trade
treaties signed by member states?
Answer: The World Trade Organization
129.) The Johnson Automotive Group recently closed two of its US manufacturing facilities and
opened a new facility in Asia to take advantage of lower labor costs and savings in energy
costs. The company made this change in order to benefit from _____.
Answer: factors of production
130.) True or False: The International Monetary Fund (IMF) was established to ensure the
stability of the international monetary system.
Answer: True
131.) Advances in _____ technology make it possible for companies to outsource customer
service operations to another country.
Answer: communication
132.) When global institutions were introduced in the 1940s, governments in struggling nations
would turn to the _____ for low-interest loans needed for infrastructure projects such as
building roads.
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Answer: World Bank
133.) What can be an impediment to the globalization of production?
Answer: transportation costs
134.) Global institutions are needed to
Answer: stabilize and monitor the global marketplace.
135.) In return for offering loans, the International Monetary Fund (IMF) Answer: enforces its
economic policies on nations.
136.) The World Trade Organization (WTO) is the successor to ______.
Answer: GATT
137.) The ______ was established on October 24, 1945. Today, one of its key purposes is to
maintain international peace and security.
Answer: United Nations
138.) Which statement best describes the International Monetary Fund (IMF)?
Answer: The IMF is often seen as the lender of last resort to nation-states whose economies are
in turmoil.
139.) Foreign direct investment occurs when a(n)
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Answer: investment is made by a company based in one country into a company or entity based
in another country.
140.) What is an accurate description of the World Bank?
Answer: It focuses on helping developing countries to fight poverty through investments in the
underlying structure of the country.
141.) The International Monetary Fund (IMF) has been criticized forAnswer: minimizing a
nation's sovereignty.
142.) True or false: Experts forecast that world trade will continue to decline more rapidly than
world production.
Answer: False - World trade is expected to increase more rapidly than world production for the
foreseeable future
143.) International trade occurs when a firm _____.
Answer: exports goods or services to consumers in another country.
144.) What are three things that result from the fact that the volume of world trade has been
growing faster than world GDP?
Answer: -economies of nation-states are becoming more intertwined
-more firms are dispersing parts of their production process around the globe
-world has become significantly wealthier
145.) The globalization of markets and production implies that
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Answer: domestic firms are facing intense competition from foreign firms.
146.) We live in an ever-increasing knowledge society. How does this affect international trade?
Answer: Consumers know more about goods made worldwide which drives demand for those
goods.
147.) Using the results from Figure 1.1 in the text, it is evident that as the number of regional
trade agreements goes up, world trade across country borders tends to _____.
Answer: also go up
148.) Since 1970, the average yearly outflow of foreign direct investment has _____.
Answer: increased
149.) Just a few decades ago, it would have cost a business much more money to find buyers in a
foreign country. What has helped lower the cost of this process and allows buyers and
sellers to easily find each other regardless of their location?
Answer: internet
150.) True or false: While lowering trade barriers initially made global production possible, the
advent of technology made globalization a reality.
Answer: True
151.) In terms of innovation in transportation technology occurring since the 1950s, the
development of
_____ has essentially reduced the size of our entire world. (Check the two that apply.)
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Answer: commercial jets
superfreighters
152.) A refrigerator parts manufacturer in China receives an order and loads the goods into a
large receptacle that is then loaded on a ship headed for the United States. When the ship
docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in
Iowa. This scenario shows how _____ made the delivery of goods in the global
marketplace much easier.
Answer: containerization
153.) During the 1960s, which country was the predominant world power in terms of foreign
direct investment?
Answer: the U.S
154.) The decline of the United States standing in industrial power since the 1960s, is considered
a relative decline because it is a reflection of
Answer: the faster economic growth of other economies
155.) As the barriers to the free flow of goods, services, and capital fell during the 1970s, one
motivation for foreign direct investment by non-US firms was the desire to
Answer: move production activities to more desirable locations.
156.) The stock of foreign direct investment refers to the ______ of foreign investments.
Answer: total cumulative value
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157.) there have been two notable trends in the demographics of multinational enterprises since
the 1960s. These include _____.
Answer: the rise of non-US
multinationals the growth of mini-
multinationals
158.) Select the four facts that described the demographics of the global economy up until the
1960s.
Answer: U.S. dominance in world foreign direct investment
The dominance of large, multinational U.S. firms in the international business scene
Roughly half of the globe was off-limits to Western international business
U.S. dominance in the world economy and world trade
159.) In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S.
position compare today?
Answer: It has diminished industrial power.
160.) A country's stock of foreign direct investment is the total cumulative value of foreign
investments that are taken as a percentage of that country's _____.
Answer: GDP
161.) A(n) ______ is any entity that conducts business in at least two countries.
Answer: multinational enterprise
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162.) According to the critics of globalization, what are two results from falling trade barriers?
Answer: A depression of wages in developed nations
The destruction of manufacturing jobs in advanced economies
163.) Studies exploring the share of labor in national income over the last two decades show that
the share of national income accounted for by skilled labor has
Answer: increased
164.) Evidence suggests that _____ has impacted the declining share of national income enjoyed
by labor more so than globalization has.
Answer: technological change
165.) One concern voiced by critics of globalization is that
Answer: an interdependent global economy shifts economic power away from national
governments and toward organizations such as the United Nations.
166.) According to critics of globalization, increased free trade and investment over the past few
decades have
Answer: broadened the gap between the rich and poor nations.
167.) By the end of the 1970s in Great Britain, state-owned companies monopolized the
telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of
which political system in place at the time?
Answer: social democracy
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168.) How are monopolies viewed in a market economy?
Answer: Monopolies are considered a negative force as they can restrict output and increase
prices.
169.) The political economy of a country refers to the interaction of the political, economic, and
_____ systems of a country.
Answer: legal
170.) Political systems that emphasize individualism tend to promote _____.
Answer: democracy
171.) ______ refers to a political system that values the needs of society over that of an
individualAnswer: collectivism
172.) Plato would have agreed that society should be stratified into classes and ______ were best
suited to rule society.
Answer: philosophers and soldiers
173.) in the early 20th century, communists differed from social democrats in that communists
believed in
Answer: a strategy of revolutionary action.
174.) ______ refers to the process of selling state-owned enterprises to private investors.
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Answer: privatization
175.) ______ refers to a philosophy that promotes the free exercise of one's goals and desires in
economic and political pursuits
Answer: individualism
176.) Identify the accurate statement about individualism.
Answer: It stresses that society should be based on individual economic and political freedoms.
177.) Which statement BEST describes a totalitarian system?
Answer: It is a form of government in which the state recognizes no limits to its authority and
strives to regulate all aspects of public and private life.
178.) China and Vietnam have experienced greater individual freedom in the economic sphere;
however, this is not a reflection of the presence of a(n) _____.
Answer: democracy
179.) Nations adopting the pure form of democracy would
Answer: directly involve citizens in the decision making of the country.
180.) What condition paves the way for an ideal representative democracy?
Answer: Universal adult suffrage
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181.) Which characteristic is typical within a totalitarian country?
Answer: There is no questioning of the ruler's decisions.
182.) Under Vladimir Putin, the government of Russia has becoming increasingly _____.
Answer: totalitarian
183.) Theocratic totalitarianism is described as a political system
Answer: in which rulers govern based on religious rules and principles.
184.) In a nation where right-wing totalitarianism is present, you would find that
Answer: political freedom is restricted, frequently on the grounds that it would lead to the rise of
communism.
185.) A pseudo-democracy is the term given to a nation in which
Answer: A pseudo-democracy is the term given to a nation in which
186.) Along the continuum between democracy and totalitarianism, it can be said that
Answer: it is possible to have a democratic state in which some degree of collectivism exists.
187.) In a market economy, the government's role is to
Answer: encourage free and fair competition and minimize restrictive business practices.
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188.) The production of goods in a pure market economy are determined by
Answer: supply and demand
189.) What is the objective of a pure command economy?
Answer: allotment of resources for the overall good of society
190.) Which Greek philosopher is credited with advocating the origins of collectivism?
Answer: Plato
191.) While a pure command economy is thought to be based on the collective good of a society,
it often results in
Answer: state-owned enterprises that have fewer reasons to control costs.
192.) In a ______ economy, both private enterprise and state ownership co-exist.
Answer: mixed
193.) ______ measures the total annual income received by residents of a country.
Answer: Gross national income
194.) The process of privatization fails to perform as expected when
Answer: newly privatized firms are protected from foreign competition.
lOMoARcPSD| 61755304
195.) The ______ adjustment helps provide a more direct comparison of the living standards
found in different countries.
Answer: purchasing power parity
196.) The base used to make the purchasing power parity adjustment isAnswer: the cost of living
in the United States.
197.) In some countries, barter agreements take the place of cash transactions and this skews the
"official" economic activity figures. This is referred to as _____.
Answer: the shadow economy
198.) he Human Development Index is based onAnswer: life expectancy at birth.
199.) One thing the Human Development Index does not assess but which Amartya Sen believes
should be included to determine development is
Answer: political freedoms
200.) When analyzing the process of innovation, it can be said that itAnswer: goes hand-in-hand
with entrepreneurship.
201.) One positive aspect of innovation is that it
Answer: increases the economic activity within a country.
lOMoARcPSD| 61755304
202.) Which businessperson is an example of an entrepreneur?
Answer: Natalia, the CEO and founder of Mountain Top Inc., an adventure travel company
203.) Innovators and entrepreneurs flourish most in a _____ because _____.
Answer: market economy; it grants existing businesses and entrepreneurs the freedom to
improve their operations through innovation
204.) Jeffrey Sachs argued that the ______ of a nation can have an impact on economic
development.
Answer: geography
205.) Sachs would agree that _____ helps explain why Malaysia and Singapore have been able to
overcome the issues associated with their tropical geography and achieve economic growth
faster than some tropical nations in Africa.
Answer: education
206.) ______ is one of the steps necessary for a country to shift toward a market-based economic
system.
Answer: privatization
207.) What is an example of a transaction that would take place in the shadow economy of a
country?
Answer: To avoid paying the federal gift tax, the broker advised his client to transfer the funds
without declaring them as a gift.
lOMoARcPSD| 61755304
208.) ______ involves removing legal restrictions, typically in the economic sphere.
Answer: deregulation
209.) Privatization became a worldwide practice starting in the
Answer: 1980s
210.) The long-run monetary benefits of doing business in a country are influenced by
theAnswer: purchasing power of consumers.
211.) When comparing early and late entrants into a market, it can be said that
Answer: early entrants build brand loyalty and gain experience in a country's business practices.
212.) It would probably be _____ costly to do business in a relatively underdeveloped economy
Answer: more
213.) The likelihood that political forces will cause drastic changes in a country's business
environment and adversely affect the potential for a company to make a profit is called a
_____ risk.
Answer: political
214.) Which statement accurately describes the effects of social unrest on a country?
lOMoARcPSD| 61755304
Answer: Social unrest can result in abrupt changes in government which tend to have negative
economic implications.
215.) True or False: Economic risks are independent of political risks.
Answer: False
216.) One indicator of economic mismanagement in a country is the
Answer: rate of inflation
217.) The privatization movement was started in
Answer: Great Britain in the 1980s with the sale of British Telecom.
218.) A(n) ______ risk is one that arises from failure to follow statutory or regulatory obligations
and, therefore, one that can impact a trading partner.
Answer: legal
219.) It is ____________ for the government to expropriate profits from innovation through
excessive taxation.
Answer: legal
220.) A country's economic system and property rights regime are _____ predictors of economic
prospects.
Answer: good
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221.) When assessing country attractiveness, the costs might include _____.
Answer: corruption
222.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
Answer: TRUE
223.) The total annual income received by residents of a single nation is reflected in which
official measure?
Answer: gross national income
224.) declining trade barriers
Answer: better ability to export goods
225.) declining investment barriers
Answer: better ability to optimize location economies
226.) enhanced communication technologies
Answer: growth in e commerce
227.) enhanced transportation technologies
Answer: lowered distance between countries
lOMoARcPSD| 61755304
228.) Arguments for and against globalization: producers
Answer: -more markets to sell in
-can go bankrupt due to competition
229.) Arguments for and against globalization: the environment
Answer: -tougher laws lead to lower pollution rates
-lack of adequate regulation leads to abuse
230.) Arguments for and against globalization: consumers
Answer: -more products to choose from
-don't know how to products are made
231.) Arguments for and against globalization: workers
Answer: -development of better skills
-loss of jobs due to competition
232.) The primary reason Apple established production facilities in China for its iPhone was to
capitalize on
Answer: the ability of subcontractors to rapidly respond to changes in demand.
233.) Apple sources parts for its iPhone from around the world before assembling the phones in
China.
This reflects the
lOMoARcPSD| 61755304
Answer: globalization of production.
234.) The main factor driving Apple's decision to locate its iPhone production in China was
Answer: speed
235.) A common complaint among those pushing back against globalization is that
Answer: the benefits of globalization are not evenly distributed among socioeconomic classes.
236.) A major factor contributing to the fraying of globalization since 2008 isAnswer: more
regulations limiting credit.
237.) Which socioeconomic group is feeling left behind in the age of globalization?
Answer: the lower and middle classes
238.) Political system:
Right-wing Totalitarianism
Tribal Totalitarianism
Pseudo Democracy
Communist Totalitarianism
Representative Democracy
Theocratic Totalitarianism
Answer: Country:
Germany in the 1930s
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Kenya
Russia
China
U.S.
Saudi Arabia
141.) How can Venezuela's economic system best be described during Hugo Chavez's years as
president?
Answer: mixed
142.) Using the information on political economy in your text and the case above, how would
you characterize Venezuela's political economy under President Hugo Chávez?
Answer: communist totalitarianism
143.) Based on the information on political economy in the text and the case on Venezuela above,
whichstatement best characterizes the situation in Venezuela?
Answer: There is probably a high level of corruption within the government.
144.) Hugo Chavez's move to nationalize troubled firms is consistent with a
Answer: mixed economy
145.) According to the video, the standard of living in the United States is _____ as compared to
that of China.
Answer: higher
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146.) if gross national income per capita adjusted for differences in the cost of living is about
$13,000 in China, a developing country, and is about $56,000 in the United States, a
developed country, then
Answer: on average, Americans can afford more goods and services than their Chinese
counterparts.
147.) GNI figures are helpful in understanding an economy because they
Answer: tell us how poor a country is relative to another
148.) One reason why a global market does not fully exist is _____.
Answer: differences in legal regulations among national markets
149.) The United Nations was established by _____ countries committed to preserving peace
through economic cooperation and trade support.
Answer: 51
150.) The increasing number of trade agreements in place around the world creates a(n) _____ in
world trade.
Answer: increase
151.) The ______ has developed into the information backbone of the global economy and
reduced the constraints of location, scale, and time zone.
Answer: internet
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152.) Creating and managing a globally dispersed production system is made easier by the
______ in costs of information processing and communication.
Answer: decrease
153.) Based on rankings by Forbes in 2003, the second-largest source country of multinational
enterprises was _____.
Answer: Japan
154.) if you were to describe the global economy of the twenty-first century, it would be accurate
to say that
Answer: more nations are becoming part of the developed world.
155.) true or false: Russia, as it is today, is an example of a pseudo-democracy.
Answer: true - Under Vladimir Putin, Russia limits the political and civil liberties of opposition
groups, yet voices opposing his rule are still heard.
156.) What economic tactic was used when former communist countries removed price controls
and allowed prices to be set as the result of supply and demand?
Answer: deregulation
157.) A(n) ______ risk is the chance that conditions like a change in exchange rates will affect an
investment.
Multiple choice question.
Answer: economic
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158.) Legal risk is evident in a country that has _____.
Answer: a violation of property rights
159.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
True false question.
Answer: True
160.) Even though there are many state-owned businesses in China, many Western businesses
feel that they should still invest in the country because
Answer: the nation is moving toward a market-based system.
161.) True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the
full value of their labor.
Answer: false
239.) Global markets for industrial goods such as oil and wheat are more typical than those for
consumer products because _____.
Answer: industrial goods serve universal needs
240.) Land, labor, capital, and energy are all examples of factors of _____.
Answer: production
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241.) A country with high _____ has a barrier to international trade.
Answer: tariffs on imports of foreign goods
242.) Early outsourcing efforts were mostly limited to _____ activities while today numerous
business activities can be outsourced.
Answer: manufacturing
243.) What is an accurate description of the globalization of production?
Answer: Locating each stage of production where it can be done most economically
244.) Which of these companies is facing an impediment to the globalization of production?
Answer: US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an
overseas company.
245.) The International Monetary Fund and the World Bank are both examples of _____ that help
govern the global business system.
Answer: global institutions
246.) What is a challenge faced by companies entering the global market?
Answer: Differences in consumer tastes and preferences
247.) Which organization ensures that nation-states comply to the rules associated with trade
treaties signed by member states?
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Answer: The World Trade Organization
248.) The Johnson Automotive Group recently closed two of its US manufacturing facilities and
opened a new facility in Asia to take advantage of lower labor costs and savings in energy
costs. The company made this change in order to benefit from _____.
Answer: factors of production
249.) True or False: The International Monetary Fund (IMF) was established to ensure the
stability of the international monetary system.
Answer: True
250.) Advances in _____ technology make it possible for companies to outsource customer
service operations to another country.
Answer: communication
251.) When global institutions were introduced in the 1940s, governments in struggling nations
would turn to the _____ for low-interest loans needed for infrastructure projects such as
building roads.
Answer: World Bank
252.) What can be an impediment to the globalization of production?
Answer: transportation costs
253.) Global institutions are needed to
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Answer: stabilize and monitor the global marketplace.
254.) In return for offering loans, the International Monetary Fund (IMF) Answer: enforces its
economic policies on nations.
255.) The World Trade Organization (WTO) is the successor to ______.
Answer: GATT
256.) The ______ was established on October 24, 1945. Today, one of its key purposes is to
maintain international peace and security.
Answer: United Nations
257.) Which statement best describes the International Monetary Fund (IMF)?
Answer: The IMF is often seen as the lender of last resort to nation-states whose economies are
in turmoil.
258.) Foreign direct investment occurs when a(n)
Answer: investment is made by a company based in one country into a company or entity based
in another country.
259.) What is an accurate description of the World Bank?
Answer: It focuses on helping developing countries to fight poverty through investments in the
underlying structure of the country.
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260.) The International Monetary Fund (IMF) has been criticized forAnswer: minimizing a
nation's sovereignty.
261.) True or false: Experts forecast that world trade will continue to decline more rapidly than
world production.
Answer: False - World trade is expected to increase more rapidly than world production for the
foreseeable future
262.) International trade occurs when a firm _____.
Answer: exports goods or services to consumers in another country.
263.) What are three things that result from the fact that the volume of world trade has been
growing faster than world GDP?
Answer: -economies of nation-states are becoming more intertwined
-more firms are dispersing parts of their production process around the globe
-world has become significantly wealthier
264.) The globalization of markets and production implies that
Answer: domestic firms are facing intense competition from foreign firms.
265.) We live in an ever-increasing knowledge society. How does this affect international trade?
Answer: Consumers know more about goods made worldwide which drives demand for those
goods.
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266.) Using the results from Figure 1.1 in the text, it is evident that as the number of regional
trade agreements goes up, world trade across country borders tends to _____.
Answer: also go up
267.) Since 1970, the average yearly outflow of foreign direct investment has _____.
Answer: increased
268.) Just a few decades ago, it would have cost a business much more money to find buyers in a
foreign country. What has helped lower the cost of this process and allows buyers and
sellers to easily find each other regardless of their location?
Answer: internet
269.) True or false: While lowering trade barriers initially made global production possible, the
advent of technology made globalization a reality.
Answer: True
270.) In terms of innovation in transportation technology occurring since the 1950s, the
development of
_____ has essentially reduced the size of our entire world. (Check the two that apply.)
Answer: commercial jets
superfreighters
271.) A refrigerator parts manufacturer in China receives an order and loads the goods into a
large receptacle that is then loaded on a ship headed for the United States. When the ship
docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in
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Iowa. This scenario shows how _____ made the delivery of goods in the global
marketplace much easier.
Answer: containerization
272.) During the 1960s, which country was the predominant world power in terms of foreign
direct investment?
Answer: the U.S
273.) The decline of the United States standing in industrial power since the 1960s, is considered
a relative decline because it is a reflection of
Answer: the faster economic growth of other economies
274.) As the barriers to the free flow of goods, services, and capital fell during the 1970s, one
motivation for foreign direct investment by non-US firms was the desire to
Answer: move production activities to more desirable locations.
275.) The stock of foreign direct investment refers to the ______ of foreign investments.
Answer: total cumulative value
276.) there have been two notable trends in the demographics of multinational enterprises since
the 1960s. These include _____.
Answer: the rise of non-US
multinationals the growth of mini-
multinationals
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277.) Select the four facts that described the demographics of the global economy up until the
1960s.
Answer: U.S. dominance in world foreign direct investment
The dominance of large, multinational U.S. firms in the international business scene
Roughly half of the globe was off-limits to Western international business
U.S. dominance in the world economy and world trade
278.) In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S.
position compare today?
Answer: It has diminished industrial power.
279.) A country's stock of foreign direct investment is the total cumulative value of foreign
investments that are taken as a percentage of that country's _____.
Answer: GDP
280.) A(n) ______ is any entity that conducts business in at least two countries.
Answer: multinational enterprise
281.) According to the critics of globalization, what are two results from falling trade barriers?
Answer: A depression of wages in developed nations
The destruction of manufacturing jobs in advanced economies
282.) Studies exploring the share of labor in national income over the last two decades show that
the share of national income accounted for by skilled labor has
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Answer: increased
283.) Evidence suggests that _____ has impacted the declining share of national income enjoyed
by labor more so than globalization has.
Answer: technological change
284.) One concern voiced by critics of globalization is that
Answer: an interdependent global economy shifts economic power away from national
governments and toward organizations such as the United Nations.
285.) According to critics of globalization, increased free trade and investment over the past few
decades have
Answer: broadened the gap between the rich and poor nations.
286.) By the end of the 1970s in Great Britain, state-owned companies monopolized the
telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of
which political system in place at the time?
Answer: social democracy
287.) How are monopolies viewed in a market economy?
Answer: Monopolies are considered a negative force as they can restrict output and increase
prices.
288.) The political economy of a country refers to the interaction of the political, economic, and
_____ systems of a country.
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Answer: legal
289.) Political systems that emphasize individualism tend to promote _____.
Answer: democracy
290.) ______ refers to a political system that values the needs of society over that of an
individualAnswer: collectivism
291.) Plato would have agreed that society should be stratified into classes and ______ were best
suited to rule society.
Answer: philosophers and soldiers
292.) in the early 20th century, communists differed from social democrats in that communists
believed in
Answer: a strategy of revolutionary action.
293.) ______ refers to the process of selling state-owned enterprises to private investors.
Answer: privatization
294.) ______ refers to a philosophy that promotes the free exercise of one's goals and desires in
economic and political pursuits
Answer: individualism
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295.) Identify the accurate statement about individualism.
Answer: It stresses that society should be based on individual economic and political freedoms.
296.) Which statement BEST describes a totalitarian system?
Answer: It is a form of government in which the state recognizes no limits to its authority and
strives to regulate all aspects of public and private life.
297.) China and Vietnam have experienced greater individual freedom in the economic sphere;
however, this is not a reflection of the presence of a(n) _____.
Answer: democracy
298.) Nations adopting the pure form of democracy would
Answer: directly involve citizens in the decision making of the country.
299.) What condition paves the way for an ideal representative democracy?
Answer: Universal adult suffrage
300.) Which characteristic is typical within a totalitarian country?
Answer: There is no questioning of the ruler's decisions.
301.) Under Vladimir Putin, the government of Russia has becoming increasingly _____.
Answer: totalitarian
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302.) Theocratic totalitarianism is described as a political system
Answer: in which rulers govern based on religious rules and principles.
303.) In a nation where right-wing totalitarianism is present, you would find that
Answer: political freedom is restricted, frequently on the grounds that it would lead to the rise of
communism.
304.) A pseudo-democracy is the term given to a nation in which
Answer: A pseudo-democracy is the term given to a nation in which
305.) Along the continuum between democracy and totalitarianism, it can be said that
Answer: it is possible to have a democratic state in which some degree of collectivism exists.
306.) In a market economy, the government's role is to
Answer: encourage free and fair competition and minimize restrictive business practices.
307.) The production of goods in a pure market economy are determined by
Answer: supply and demand
308.) What is the objective of a pure command economy?
Answer: allotment of resources for the overall good of society
lOMoARcPSD| 61755304
309.) Which Greek philosopher is credited with advocating the origins of collectivism?
Answer: Plato
310.) While a pure command economy is thought to be based on the collective good of a society,
it often results in
Answer: state-owned enterprises that have fewer reasons to control costs.
311.) In a ______ economy, both private enterprise and state ownership co-exist.
Answer: mixed
312.) ______ measures the total annual income received by residents of a country.
Answer: Gross national income
313.) The process of privatization fails to perform as expected when
Answer: newly privatized firms are protected from foreign competition.
314.) The ______ adjustment helps provide a more direct comparison of the living standards
found in different countries.
Answer: purchasing power parity
315.) The base used to make the purchasing power parity adjustment isAnswer: the cost of living
in the United States.
lOMoARcPSD| 61755304
316.) In some countries, barter agreements take the place of cash transactions and this skews the
"official" economic activity figures. This is referred to as _____.
Answer: the shadow economy
317.) he Human Development Index is based onAnswer: life expectancy at birth.
318.) One thing the Human Development Index does not assess but which Amartya Sen believes
should be included to determine development is
Answer: political freedoms
319.) When analyzing the process of innovation, it can be said that itAnswer: goes hand-in-hand
with entrepreneurship.
320.) One positive aspect of innovation is that it
Answer: increases the economic activity within a country.
321.) Which businessperson is an example of an entrepreneur?
Answer: Natalia, the CEO and founder of Mountain Top Inc., an adventure travel company
322.) Innovators and entrepreneurs flourish most in a _____ because _____.
Answer: market economy; it grants existing businesses and entrepreneurs the freedom to
improve their operations through innovation
lOMoARcPSD| 61755304
323.) Jeffrey Sachs argued that the ______ of a nation can have an impact on economic
development.
Answer: geography
324.) Sachs would agree that _____ helps explain why Malaysia and Singapore have been able to
overcome the issues associated with their tropical geography and achieve economic growth
faster than some tropical nations in Africa.
Answer: education
325.) ______ is one of the steps necessary for a country to shift toward a market-based economic
system.
Answer: privatization
326.) What is an example of a transaction that would take place in the shadow economy of a
country?
Answer: To avoid paying the federal gift tax, the broker advised his client to transfer the funds
without declaring them as a gift.
327.) ______ involves removing legal restrictions, typically in the economic sphere.
Answer: deregulation
328.) Privatization became a worldwide practice starting in the
Answer: 1980s
lOMoARcPSD| 61755304
329.) The long-run monetary benefits of doing business in a country are influenced by
theAnswer: purchasing power of consumers.
330.) When comparing early and late entrants into a market, it can be said that
Answer: early entrants build brand loyalty and gain experience in a country's business practices.
331.) It would probably be _____ costly to do business in a relatively underdeveloped economy
Answer: more
332.) The likelihood that political forces will cause drastic changes in a country's business
environment and adversely affect the potential for a company to make a profit is called a
_____ risk.
Answer: political
333.) Which statement accurately describes the effects of social unrest on a country?
Answer: Social unrest can result in abrupt changes in government which tend to have negative
economic implications.
334.) True or False: Economic risks are independent of political risks.
Answer: False
335.) One indicator of economic mismanagement in a country is the
lOMoARcPSD| 61755304
Answer: rate of inflation
336.) The privatization movement was started in
Answer: Great Britain in the 1980s with the sale of British Telecom.
337.) A(n) ______ risk is one that arises from failure to follow statutory or regulatory obligations
and, therefore, one that can impact a trading partner.
Answer: legal
338.) It is ____________ for the government to expropriate profits from innovation through
excessive taxation.
Answer: legal
339.) A country's economic system and property rights regime are _____ predictors of economic
prospects.
Answer: good
340.) When assessing country attractiveness, the costs might include _____.
Answer: corruption
341.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
Answer: TRUE
lOMoARcPSD| 61755304
342.) The total annual income received by residents of a single nation is reflected in which
official measure?
Answer: gross national income
343.) declining trade barriers
Answer: better ability to export goods
344.) declining investment barriers
Answer: better ability to optimize location economies
345.) enhanced communication technologies
Answer: growth in e commerce
346.) enhanced transportation technologies
Answer: lowered distance between countries
347.) Arguments for and against globalization: producers
Answer: -more markets to sell in
-can go bankrupt due to competition
348.) Arguments for and against globalization: the environment
lOMoARcPSD| 61755304
Answer: -tougher laws lead to lower pollution rates
-lack of adequate regulation leads to abuse
349.) Arguments for and against globalization: consumers
Answer: -more products to choose from
-don't know how to products are made
350.) Arguments for and against globalization: workers
Answer: -development of better skills
-loss of jobs due to competition
351.) The primary reason Apple established production facilities in China for its iPhone was to
capitalize on
Answer: the ability of subcontractors to rapidly respond to changes in demand.
352.) Apple sources parts for its iPhone from around the world before assembling the phones in
China.
This reflects the
Answer: globalization of production.
353.) The main factor driving Apple's decision to locate its iPhone production in China was
Answer: speed
354.) A common complaint among those pushing back against globalization is that
lOMoARcPSD| 61755304
Answer: the benefits of globalization are not evenly distributed among socioeconomic classes.
355.) A major factor contributing to the fraying of globalization since 2008 isAnswer: more
regulations limiting credit.
356.) Which socioeconomic group is feeling left behind in the age of globalization?
Answer: the lower and middle classes
357.) Political system:
Right-wing Totalitarianism
Tribal Totalitarianism
Pseudo Democracy
Communist Totalitarianism
Representative Democracy
Theocratic Totalitarianism
Answer: Country:
Germany in the 1930s
Kenya
Russia
China
U.S.
Saudi Arabia
162.) How can Venezuela's economic system best be described during Hugo Chavez's years as
president?
lOMoARcPSD| 61755304
Answer: mixed
163.) Using the information on political economy in your text and the case above, how would
you characterize Venezuela's political economy under President Hugo Chávez?
Answer: communist totalitarianism
164.) Based on the information on political economy in the text and the case on Venezuela above,
whichstatement best characterizes the situation in Venezuela?
Answer: There is probably a high level of corruption within the government.
165.) Hugo Chavez's move to nationalize troubled firms is consistent with a
Answer: mixed economy
166.) According to the video, the standard of living in the United States is _____ as compared to
that of China.
Answer: higher
167.) if gross national income per capita adjusted for differences in the cost of living is about
$13,000 in China, a developing country, and is about $56,000 in the United States, a
developed country, then
Answer: on average, Americans can afford more goods and services than their Chinese
counterparts.
168.) GNI figures are helpful in understanding an economy because they
lOMoARcPSD| 61755304
Answer: tell us how poor a country is relative to another
169.) One reason why a global market does not fully exist is _____.
Answer: differences in legal regulations among national markets
170.) The United Nations was established by _____ countries committed to preserving peace
through economic cooperation and trade support.
Answer: 51
171.) The increasing number of trade agreements in place around the world creates a(n) _____ in
world trade.
Answer: increase
172.) The ______ has developed into the information backbone of the global economy and
reduced the constraints of location, scale, and time zone.
Answer: internet
173.) Creating and managing a globally dispersed production system is made easier by the
______ in costs of information processing and communication.
Answer: decrease
174.) Based on rankings by Forbes in 2003, the second-largest source country of multinational
enterprises was _____.
Answer: Japan
lOMoARcPSD| 61755304
175.) if you were to describe the global economy of the twenty-first century, it would be accurate
to say that
Answer: more nations are becoming part of the developed world.
176.) true or false: Russia, as it is today, is an example of a pseudo-democracy.
Answer: true - Under Vladimir Putin, Russia limits the political and civil liberties of opposition
groups, yet voices opposing his rule are still heard.
177.) What economic tactic was used when former communist countries removed price controls
and allowed prices to be set as the result of supply and demand?
Answer: deregulation
178.) A(n) ______ risk is the chance that conditions like a change in exchange rates will affect an
investment.
Multiple choice question.
Answer: economic
179.) Legal risk is evident in a country that has _____.
Answer: a violation of property rights
180.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
True false question.
Answer: True
lOMoARcPSD| 61755304
181.) Even though there are many state-owned businesses in China, many Western businesses
feel that they should still invest in the country because
Answer: the nation is moving toward a market-based system.
182.) True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the
full value of their labor.
Answer: false
358.) Global markets for industrial goods such as oil and wheat are more typical than those for
consumer products because _____.
Answer: industrial goods serve universal needs
359.) Land, labor, capital, and energy are all examples of factors of _____.
Answer: production
360.) A country with high _____ has a barrier to international trade.
Answer: tariffs on imports of foreign goods
361.) Early outsourcing efforts were mostly limited to _____ activities while today numerous
business activities can be outsourced.
Answer: manufacturing
362.) What is an accurate description of the globalization of production?
lOMoARcPSD| 61755304
Answer: Locating each stage of production where it can be done most economically
363.) Which of these companies is facing an impediment to the globalization of production?
Answer: US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an
overseas company.
364.) The International Monetary Fund and the World Bank are both examples of _____ that help
govern the global business system.
Answer: global institutions
365.) What is a challenge faced by companies entering the global market?
Answer: Differences in consumer tastes and preferences
366.) Which organization ensures that nation-states comply to the rules associated with trade
treaties signed by member states?
Answer: The World Trade Organization
367.) The Johnson Automotive Group recently closed two of its US manufacturing facilities and
opened a new facility in Asia to take advantage of lower labor costs and savings in energy
costs. The company made this change in order to benefit from _____.
Answer: factors of production
368.) True or False: The International Monetary Fund (IMF) was established to ensure the
stability of the international monetary system.
lOMoARcPSD| 61755304
Answer: True
369.) Advances in _____ technology make it possible for companies to outsource customer
service operations to another country.
Answer: communication
370.) When global institutions were introduced in the 1940s, governments in struggling nations
would turn to the _____ for low-interest loans needed for infrastructure projects such as
building roads.
Answer: World Bank
371.) What can be an impediment to the globalization of production?
Answer: transportation costs
372.) Global institutions are needed to
Answer: stabilize and monitor the global marketplace.
373.) In return for offering loans, the International Monetary Fund (IMF) Answer: enforces its
economic policies on nations.
374.) The World Trade Organization (WTO) is the successor to ______.
Answer: GATT
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375.) The ______ was established on October 24, 1945. Today, one of its key purposes is to
maintain international peace and security.
Answer: United Nations
376.) Which statement best describes the International Monetary Fund (IMF)?
Answer: The IMF is often seen as the lender of last resort to nation-states whose economies are
in turmoil.
377.) Foreign direct investment occurs when a(n)
Answer: investment is made by a company based in one country into a company or entity based
in another country.
378.) What is an accurate description of the World Bank?
Answer: It focuses on helping developing countries to fight poverty through investments in the
underlying structure of the country.
379.) The International Monetary Fund (IMF) has been criticized forAnswer: minimizing a
nation's sovereignty.
380.) True or false: Experts forecast that world trade will continue to decline more rapidly than
world production.
Answer: False - World trade is expected to increase more rapidly than world production for the
foreseeable future
lOMoARcPSD| 61755304
381.) International trade occurs when a firm _____.
Answer: exports goods or services to consumers in another country.
382.) What are three things that result from the fact that the volume of world trade has been
growing faster than world GDP?
Answer: -economies of nation-states are becoming more intertwined
-more firms are dispersing parts of their production process around the globe
-world has become significantly wealthier
383.) The globalization of markets and production implies that
Answer: domestic firms are facing intense competition from foreign firms.
384.) We live in an ever-increasing knowledge society. How does this affect international trade?
Answer: Consumers know more about goods made worldwide which drives demand for those
goods.
385.) Using the results from Figure 1.1 in the text, it is evident that as the number of regional
trade agreements goes up, world trade across country borders tends to _____.
Answer: also go up
386.) Since 1970, the average yearly outflow of foreign direct investment has _____.
Answer: increased
lOMoARcPSD| 61755304
387.) Just a few decades ago, it would have cost a business much more money to find buyers in a
foreign country. What has helped lower the cost of this process and allows buyers and
sellers to easily find each other regardless of their location?
Answer: internet
388.) True or false: While lowering trade barriers initially made global production possible, the
advent of technology made globalization a reality.
Answer: True
389.) In terms of innovation in transportation technology occurring since the 1950s, the
development of
_____ has essentially reduced the size of our entire world. (Check the two that apply.)
Answer: commercial jets
superfreighters
390.) A refrigerator parts manufacturer in China receives an order and loads the goods into a
large receptacle that is then loaded on a ship headed for the United States. When the ship
docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in
Iowa. This scenario shows how _____ made the delivery of goods in the global
marketplace much easier.
Answer: containerization
391.) During the 1960s, which country was the predominant world power in terms of foreign
direct investment?
Answer: the U.S
lOMoARcPSD| 61755304
392.) The decline of the United States standing in industrial power since the 1960s, is considered
a relative decline because it is a reflection of
Answer: the faster economic growth of other economies
393.) As the barriers to the free flow of goods, services, and capital fell during the 1970s, one
motivation for foreign direct investment by non-US firms was the desire to
Answer: move production activities to more desirable locations.
394.) The stock of foreign direct investment refers to the ______ of foreign investments.
Answer: total cumulative value
395.) there have been two notable trends in the demographics of multinational enterprises since
the 1960s. These include _____.
Answer: the rise of non-US
multinationals the growth of mini-
multinationals
396.) Select the four facts that described the demographics of the global economy up until the
1960s.
Answer: U.S. dominance in world foreign direct investment
The dominance of large, multinational U.S. firms in the international business scene
Roughly half of the globe was off-limits to Western international business
U.S. dominance in the world economy and world trade
lOMoARcPSD| 61755304
397.) In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S.
position compare today?
Answer: It has diminished industrial power.
398.) A country's stock of foreign direct investment is the total cumulative value of foreign
investments that are taken as a percentage of that country's _____.
Answer: GDP
399.) A(n) ______ is any entity that conducts business in at least two countries.
Answer: multinational enterprise
400.) According to the critics of globalization, what are two results from falling trade barriers?
Answer: A depression of wages in developed nations
The destruction of manufacturing jobs in advanced economies
401.) Studies exploring the share of labor in national income over the last two decades show that
the share of national income accounted for by skilled labor has
Answer: increased
402.) Evidence suggests that _____ has impacted the declining share of national income enjoyed
by labor more so than globalization has.
Answer: technological change
lOMoARcPSD| 61755304
403.) One concern voiced by critics of globalization is that
Answer: an interdependent global economy shifts economic power away from national
governments and toward organizations such as the United Nations.
404.) According to critics of globalization, increased free trade and investment over the past few
decades have
Answer: broadened the gap between the rich and poor nations.
405.) By the end of the 1970s in Great Britain, state-owned companies monopolized the
telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of
which political system in place at the time?
Answer: social democracy
406.) How are monopolies viewed in a market economy?
Answer: Monopolies are considered a negative force as they can restrict output and increase
prices.
407.) The political economy of a country refers to the interaction of the political, economic, and
_____ systems of a country.
Answer: legal
408.) Political systems that emphasize individualism tend to promote _____.
Answer: democracy
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409.) ______ refers to a political system that values the needs of society over that of an
individualAnswer: collectivism
410.) Plato would have agreed that society should be stratified into classes and ______ were best
suited to rule society.
Answer: philosophers and soldiers
411.) in the early 20th century, communists differed from social democrats in that communists
believed in
Answer: a strategy of revolutionary action.
412.) ______ refers to the process of selling state-owned enterprises to private investors.
Answer: privatization
413.) ______ refers to a philosophy that promotes the free exercise of one's goals and desires in
economic and political pursuits
Answer: individualism
414.) Identify the accurate statement about individualism.
Answer: It stresses that society should be based on individual economic and political freedoms.
415.) Which statement BEST describes a totalitarian system?
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Answer: It is a form of government in which the state recognizes no limits to its authority and
strives to regulate all aspects of public and private life.
416.) China and Vietnam have experienced greater individual freedom in the economic sphere;
however, this is not a reflection of the presence of a(n) _____.
Answer: democracy
417.) Nations adopting the pure form of democracy would
Answer: directly involve citizens in the decision making of the country.
418.) What condition paves the way for an ideal representative democracy?
Answer: Universal adult suffrage
419.) Which characteristic is typical within a totalitarian country?
Answer: There is no questioning of the ruler's decisions.
420.) Under Vladimir Putin, the government of Russia has becoming increasingly _____.
Answer: totalitarian
421.) Theocratic totalitarianism is described as a political system
Answer: in which rulers govern based on religious rules and principles.
422.) In a nation where right-wing totalitarianism is present, you would find that
lOMoARcPSD| 61755304
Answer: political freedom is restricted, frequently on the grounds that it would lead to the rise of
communism.
423.) A pseudo-democracy is the term given to a nation in which
Answer: A pseudo-democracy is the term given to a nation in which
424.) Along the continuum between democracy and totalitarianism, it can be said that
Answer: it is possible to have a democratic state in which some degree of collectivism exists.
425.) In a market economy, the government's role is to
Answer: encourage free and fair competition and minimize restrictive business practices.
426.) The production of goods in a pure market economy are determined by
Answer: supply and demand
427.) What is the objective of a pure command economy?
Answer: allotment of resources for the overall good of society
428.) Which Greek philosopher is credited with advocating the origins of collectivism?
Answer: Plato
429.) While a pure command economy is thought to be based on the collective good of a society,
it often results in
lOMoARcPSD| 61755304
Answer: state-owned enterprises that have fewer reasons to control costs.
430.) In a ______ economy, both private enterprise and state ownership co-exist.
Answer: mixed
431.) ______ measures the total annual income received by residents of a country.
Answer: Gross national income
432.) The process of privatization fails to perform as expected when
Answer: newly privatized firms are protected from foreign competition.
433.) The ______ adjustment helps provide a more direct comparison of the living standards
found in different countries.
Answer: purchasing power parity
434.) The base used to make the purchasing power parity adjustment isAnswer: the cost of living
in the United States.
435.) In some countries, barter agreements take the place of cash transactions and this skews the
"official" economic activity figures. This is referred to as _____.
Answer: the shadow economy
436.) he Human Development Index is based onAnswer: life expectancy at birth.
lOMoARcPSD| 61755304
437.) One thing the Human Development Index does not assess but which Amartya Sen believes
should be included to determine development is
Answer: political freedoms
438.) When analyzing the process of innovation, it can be said that itAnswer: goes hand-in-hand
with entrepreneurship.
439.) One positive aspect of innovation is that it
Answer: increases the economic activity within a country.
440.) Which businessperson is an example of an entrepreneur?
Answer: Natalia, the CEO and founder of Mountain Top Inc., an adventure travel company
441.) Innovators and entrepreneurs flourish most in a _____ because _____.
Answer: market economy; it grants existing businesses and entrepreneurs the freedom to
improve their operations through innovation
442.) Jeffrey Sachs argued that the ______ of a nation can have an impact on economic
development.
Answer: geography
443.) Sachs would agree that _____ helps explain why Malaysia and Singapore have been able to
overcome the issues associated with their tropical geography and achieve economic growth
faster than some tropical nations in Africa.
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Answer: education
444.) ______ is one of the steps necessary for a country to shift toward a market-based economic
system.
Answer: privatization
445.) What is an example of a transaction that would take place in the shadow economy of a
country?
Answer: To avoid paying the federal gift tax, the broker advised his client to transfer the funds
without declaring them as a gift.
446.) ______ involves removing legal restrictions, typically in the economic sphere.
Answer: deregulation
447.) Privatization became a worldwide practice starting in the
Answer: 1980s
448.) The long-run monetary benefits of doing business in a country are influenced by
theAnswer: purchasing power of consumers.
449.) When comparing early and late entrants into a market, it can be said that
Answer: early entrants build brand loyalty and gain experience in a country's business practices.
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450.) It would probably be _____ costly to do business in a relatively underdeveloped economy
Answer: more
451.) The likelihood that political forces will cause drastic changes in a country's business
environment and adversely affect the potential for a company to make a profit is called a
_____ risk.
Answer: political
452.) Which statement accurately describes the effects of social unrest on a country?
Answer: Social unrest can result in abrupt changes in government which tend to have negative
economic implications.
453.) True or False: Economic risks are independent of political risks.
Answer: False
454.) One indicator of economic mismanagement in a country is the
Answer: rate of inflation
455.) The privatization movement was started in
Answer: Great Britain in the 1980s with the sale of British Telecom.
456.) A(n) ______ risk is one that arises from failure to follow statutory or regulatory obligations
and, therefore, one that can impact a trading partner.
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Answer: legal
457.) It is ____________ for the government to expropriate profits from innovation through
excessive taxation.
Answer: legal
458.) A country's economic system and property rights regime are _____ predictors of economic
prospects.
Answer: good
459.) When assessing country attractiveness, the costs might include _____.
Answer: corruption
460.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
Answer: TRUE
461.) The total annual income received by residents of a single nation is reflected in which
official measure?
Answer: gross national income
462.) declining trade barriers
Answer: better ability to export goods
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463.) declining investment barriers
Answer: better ability to optimize location economies
464.) enhanced communication technologies
Answer: growth in e commerce
465.) enhanced transportation technologies
Answer: lowered distance between countries
466.) Arguments for and against globalization: producers
Answer: -more markets to sell in
-can go bankrupt due to competition
467.) Arguments for and against globalization: the environment
Answer: -tougher laws lead to lower pollution rates
-lack of adequate regulation leads to abuse
468.) Arguments for and against globalization: consumers
Answer: -more products to choose from
-don't know how to products are made
469.) Arguments for and against globalization: workers
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Answer: -development of better skills
-loss of jobs due to competition
470.) The primary reason Apple established production facilities in China for its iPhone was to
capitalize on
Answer: the ability of subcontractors to rapidly respond to changes in demand.
471.) Apple sources parts for its iPhone from around the world before assembling the phones in
China.
This reflects the
Answer: globalization of production.
472.) The main factor driving Apple's decision to locate its iPhone production in China was
Answer: speed
473.) A common complaint among those pushing back against globalization is that
Answer: the benefits of globalization are not evenly distributed among socioeconomic classes.
474.) A major factor contributing to the fraying of globalization since 2008 isAnswer: more
regulations limiting credit.
475.) Which socioeconomic group is feeling left behind in the age of globalization?
Answer: the lower and middle classes
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476.) Political system:
Right-wing Totalitarianism
Tribal Totalitarianism
Pseudo Democracy
Communist Totalitarianism
Representative Democracy
Theocratic Totalitarianism
Answer: Country:
Germany in the 1930s
Kenya
Russia
China
U.S.
Saudi Arabia
183.) How can Venezuela's economic system best be described during Hugo Chavez's years as
president?
Answer: mixed
184.) Using the information on political economy in your text and the case above, how would
you characterize Venezuela's political economy under President Hugo Chávez?
Answer: communist totalitarianism
185.) Based on the information on political economy in the text and the case on Venezuela above,
whichstatement best characterizes the situation in Venezuela?
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Answer: There is probably a high level of corruption within the government.
186.) Hugo Chavez's move to nationalize troubled firms is consistent with a
Answer: mixed economy
187.) According to the video, the standard of living in the United States is _____ as compared to
that of China.
Answer: higher
188.) if gross national income per capita adjusted for differences in the cost of living is about
$13,000 in China, a developing country, and is about $56,000 in the United States, a
developed country, then
Answer: on average, Americans can afford more goods and services than their Chinese
counterparts.
189.) GNI figures are helpful in understanding an economy because they
Answer: tell us how poor a country is relative to another
190.) One reason why a global market does not fully exist is _____.
Answer: differences in legal regulations among national markets
191.) The United Nations was established by _____ countries committed to preserving peace
through economic cooperation and trade support.
Answer: 51
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192.) The increasing number of trade agreements in place around the world creates a(n) _____ in
world trade.
Answer: increase
193.) The ______ has developed into the information backbone of the global economy and
reduced the constraints of location, scale, and time zone.
Answer: internet
194.) Creating and managing a globally dispersed production system is made easier by the
______ in costs of information processing and communication.
Answer: decrease
195.) Based on rankings by Forbes in 2003, the second-largest source country of multinational
enterprises was _____.
Answer: Japan
196.) if you were to describe the global economy of the twenty-first century, it would be accurate
to say that
Answer: more nations are becoming part of the developed world.
197.) true or false: Russia, as it is today, is an example of a pseudo-democracy.
Answer: true - Under Vladimir Putin, Russia limits the political and civil liberties of opposition
groups, yet voices opposing his rule are still heard.
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198.) What economic tactic was used when former communist countries removed price controls
and allowed prices to be set as the result of supply and demand?
Answer: deregulation
199.) A(n) ______ risk is the chance that conditions like a change in exchange rates will affect an
investment.
Multiple choice question.
Answer: economic
200.) Legal risk is evident in a country that has _____.
Answer: a violation of property rights
201.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
True false question.
Answer: True
202.) Even though there are many state-owned businesses in China, many Western businesses
feel that they should still invest in the country because
Answer: the nation is moving toward a market-based system.
203.) True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the
full value of their labor.
Answer: false
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477.) Global markets for industrial goods such as oil and wheat are more typical than those for
consumer products because _____.
Answer: industrial goods serve universal needs
478.) Land, labor, capital, and energy are all examples of factors of _____.
Answer: production
479.) A country with high _____ has a barrier to international trade.
Answer: tariffs on imports of foreign goods
480.) Early outsourcing efforts were mostly limited to _____ activities while today numerous
business activities can be outsourced.
Answer: manufacturing
481.) What is an accurate description of the globalization of production?
Answer: Locating each stage of production where it can be done most economically
482.) Which of these companies is facing an impediment to the globalization of production?
Answer: US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an
overseas company.
483.) The International Monetary Fund and the World Bank are both examples of _____ that help
govern the global business system.
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Answer: global institutions
484.) What is a challenge faced by companies entering the global market?
Answer: Differences in consumer tastes and preferences
485.) Which organization ensures that nation-states comply to the rules associated with trade
treaties signed by member states?
Answer: The World Trade Organization
486.) The Johnson Automotive Group recently closed two of its US manufacturing facilities and
opened a new facility in Asia to take advantage of lower labor costs and savings in energy
costs. The company made this change in order to benefit from _____.
Answer: factors of production
487.) True or False: The International Monetary Fund (IMF) was established to ensure the
stability of the international monetary system.
Answer: True
488.) Advances in _____ technology make it possible for companies to outsource customer
service operations to another country.
Answer: communication
489.) When global institutions were introduced in the 1940s, governments in struggling nations
would turn to the _____ for low-interest loans needed for infrastructure projects such as
building roads.
lOMoARcPSD| 61755304
Answer: World Bank
490.) What can be an impediment to the globalization of production?
Answer: transportation costs
491.) Global institutions are needed to
Answer: stabilize and monitor the global marketplace.
492.) In return for offering loans, the International Monetary Fund (IMF) Answer: enforces its
economic policies on nations.
493.) The World Trade Organization (WTO) is the successor to ______.
Answer: GATT
494.) The ______ was established on October 24, 1945. Today, one of its key purposes is to
maintain international peace and security.
Answer: United Nations
495.) Which statement best describes the International Monetary Fund (IMF)?
Answer: The IMF is often seen as the lender of last resort to nation-states whose economies are
in turmoil.
496.) Foreign direct investment occurs when a(n)
lOMoARcPSD| 61755304
Answer: investment is made by a company based in one country into a company or entity based
in another country.
497.) What is an accurate description of the World Bank?
Answer: It focuses on helping developing countries to fight poverty through investments in the
underlying structure of the country.
498.) The International Monetary Fund (IMF) has been criticized forAnswer: minimizing a
nation's sovereignty.
499.) True or false: Experts forecast that world trade will continue to decline more rapidly than
world production.
Answer: False - World trade is expected to increase more rapidly than world production for the
foreseeable future
500.) International trade occurs when a firm _____.
Answer: exports goods or services to consumers in another country.
501.) What are three things that result from the fact that the volume of world trade has been
growing faster than world GDP?
Answer: -economies of nation-states are becoming more intertwined
-more firms are dispersing parts of their production process around the globe
-world has become significantly wealthier
502.) The globalization of markets and production implies that
lOMoARcPSD| 61755304
Answer: domestic firms are facing intense competition from foreign firms.
503.) We live in an ever-increasing knowledge society. How does this affect international trade?
Answer: Consumers know more about goods made worldwide which drives demand for those
goods.
504.) Using the results from Figure 1.1 in the text, it is evident that as the number of regional
trade agreements goes up, world trade across country borders tends to _____.
Answer: also go up
505.) Since 1970, the average yearly outflow of foreign direct investment has _____.
Answer: increased
506.) Just a few decades ago, it would have cost a business much more money to find buyers in a
foreign country. What has helped lower the cost of this process and allows buyers and
sellers to easily find each other regardless of their location?
Answer: internet
507.) True or false: While lowering trade barriers initially made global production possible, the
advent of technology made globalization a reality.
Answer: True
508.) In terms of innovation in transportation technology occurring since the 1950s, the
development of
_____ has essentially reduced the size of our entire world. (Check the two that apply.)
lOMoARcPSD| 61755304
Answer: commercial jets
superfreighters
509.) A refrigerator parts manufacturer in China receives an order and loads the goods into a
large receptacle that is then loaded on a ship headed for the United States. When the ship
docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in
Iowa. This scenario shows how _____ made the delivery of goods in the global
marketplace much easier.
Answer: containerization
510.) During the 1960s, which country was the predominant world power in terms of foreign
direct investment?
Answer: the U.S
511.) The decline of the United States standing in industrial power since the 1960s, is considered
a relative decline because it is a reflection of
Answer: the faster economic growth of other economies
512.) As the barriers to the free flow of goods, services, and capital fell during the 1970s, one
motivation for foreign direct investment by non-US firms was the desire to
Answer: move production activities to more desirable locations.
513.) The stock of foreign direct investment refers to the ______ of foreign investments.
Answer: total cumulative value
lOMoARcPSD| 61755304
514.) there have been two notable trends in the demographics of multinational enterprises since
the 1960s. These include _____.
Answer: the rise of non-US
multinationals the growth of mini-
multinationals
515.) Select the four facts that described the demographics of the global economy up until the
1960s.
Answer: U.S. dominance in world foreign direct investment
The dominance of large, multinational U.S. firms in the international business scene
Roughly half of the globe was off-limits to Western international business
U.S. dominance in the world economy and world trade
516.) In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S.
position compare today?
Answer: It has diminished industrial power.
517.) A country's stock of foreign direct investment is the total cumulative value of foreign
investments that are taken as a percentage of that country's _____.
Answer: GDP
518.) A(n) ______ is any entity that conducts business in at least two countries.
Answer: multinational enterprise
lOMoARcPSD| 61755304
519.) According to the critics of globalization, what are two results from falling trade barriers?
Answer: A depression of wages in developed nations
The destruction of manufacturing jobs in advanced economies
520.) Studies exploring the share of labor in national income over the last two decades show that
the share of national income accounted for by skilled labor has
Answer: increased
521.) Evidence suggests that _____ has impacted the declining share of national income enjoyed
by labor more so than globalization has.
Answer: technological change
522.) One concern voiced by critics of globalization is that
Answer: an interdependent global economy shifts economic power away from national
governments and toward organizations such as the United Nations.
523.) According to critics of globalization, increased free trade and investment over the past few
decades have
Answer: broadened the gap between the rich and poor nations.
524.) By the end of the 1970s in Great Britain, state-owned companies monopolized the
telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of
which political system in place at the time?
Answer: social democracy
lOMoARcPSD| 61755304
525.) How are monopolies viewed in a market economy?
Answer: Monopolies are considered a negative force as they can restrict output and increase
prices.
526.) The political economy of a country refers to the interaction of the political, economic, and
_____ systems of a country.
Answer: legal
527.) Political systems that emphasize individualism tend to promote _____.
Answer: democracy
528.) ______ refers to a political system that values the needs of society over that of an
individualAnswer: collectivism
529.) Plato would have agreed that society should be stratified into classes and ______ were best
suited to rule society.
Answer: philosophers and soldiers
530.) in the early 20th century, communists differed from social democrats in that communists
believed in
Answer: a strategy of revolutionary action.
531.) ______ refers to the process of selling state-owned enterprises to private investors.
lOMoARcPSD| 61755304
Answer: privatization
532.) ______ refers to a philosophy that promotes the free exercise of one's goals and desires in
economic and political pursuits
Answer: individualism
533.) Identify the accurate statement about individualism.
Answer: It stresses that society should be based on individual economic and political freedoms.
534.) Which statement BEST describes a totalitarian system?
Answer: It is a form of government in which the state recognizes no limits to its authority and
strives to regulate all aspects of public and private life.
535.) China and Vietnam have experienced greater individual freedom in the economic sphere;
however, this is not a reflection of the presence of a(n) _____.
Answer: democracy
536.) Nations adopting the pure form of democracy would
Answer: directly involve citizens in the decision making of the country.
537.) What condition paves the way for an ideal representative democracy?
Answer: Universal adult suffrage
lOMoARcPSD| 61755304
538.) Which characteristic is typical within a totalitarian country?
Answer: There is no questioning of the ruler's decisions.
539.) Under Vladimir Putin, the government of Russia has becoming increasingly _____.
Answer: totalitarian
540.) Theocratic totalitarianism is described as a political system
Answer: in which rulers govern based on religious rules and principles.
541.) In a nation where right-wing totalitarianism is present, you would find that
Answer: political freedom is restricted, frequently on the grounds that it would lead to the rise of
communism.
542.) A pseudo-democracy is the term given to a nation in which
Answer: A pseudo-democracy is the term given to a nation in which
543.) Along the continuum between democracy and totalitarianism, it can be said that
Answer: it is possible to have a democratic state in which some degree of collectivism exists.
544.) In a market economy, the government's role is to
Answer: encourage free and fair competition and minimize restrictive business practices.
lOMoARcPSD| 61755304
545.) The production of goods in a pure market economy are determined by
Answer: supply and demand
546.) What is the objective of a pure command economy?
Answer: allotment of resources for the overall good of society
547.) Which Greek philosopher is credited with advocating the origins of collectivism?
Answer: Plato
548.) While a pure command economy is thought to be based on the collective good of a society,
it often results in
Answer: state-owned enterprises that have fewer reasons to control costs.
549.) In a ______ economy, both private enterprise and state ownership co-exist.
Answer: mixed
550.) ______ measures the total annual income received by residents of a country.
Answer: Gross national income
551.) The process of privatization fails to perform as expected when
Answer: newly privatized firms are protected from foreign competition.
lOMoARcPSD| 61755304
552.) The ______ adjustment helps provide a more direct comparison of the living standards
found in different countries.
Answer: purchasing power parity
553.) The base used to make the purchasing power parity adjustment isAnswer: the cost of living
in the United States.
554.) In some countries, barter agreements take the place of cash transactions and this skews the
"official" economic activity figures. This is referred to as _____.
Answer: the shadow economy
555.) he Human Development Index is based onAnswer: life expectancy at birth.
556.) One thing the Human Development Index does not assess but which Amartya Sen believes
should be included to determine development is
Answer: political freedoms
557.) When analyzing the process of innovation, it can be said that itAnswer: goes hand-in-hand
with entrepreneurship.
558.) One positive aspect of innovation is that it
Answer: increases the economic activity within a country.
lOMoARcPSD| 61755304
559.) Which businessperson is an example of an entrepreneur?
Answer: Natalia, the CEO and founder of Mountain Top Inc., an adventure travel company
560.) Innovators and entrepreneurs flourish most in a _____ because _____.
Answer: market economy; it grants existing businesses and entrepreneurs the freedom to
improve their operations through innovation
561.) Jeffrey Sachs argued that the ______ of a nation can have an impact on economic
development.
Answer: geography
562.) Sachs would agree that _____ helps explain why Malaysia and Singapore have been able to
overcome the issues associated with their tropical geography and achieve economic growth
faster than some tropical nations in Africa.
Answer: education
563.) ______ is one of the steps necessary for a country to shift toward a market-based economic
system.
Answer: privatization
564.) What is an example of a transaction that would take place in the shadow economy of a
country?
Answer: To avoid paying the federal gift tax, the broker advised his client to transfer the funds
without declaring them as a gift.
lOMoARcPSD| 61755304
565.) ______ involves removing legal restrictions, typically in the economic sphere.
Answer: deregulation
566.) Privatization became a worldwide practice starting in the
Answer: 1980s
567.) The long-run monetary benefits of doing business in a country are influenced by
theAnswer: purchasing power of consumers.
568.) When comparing early and late entrants into a market, it can be said that
Answer: early entrants build brand loyalty and gain experience in a country's business practices.
569.) It would probably be _____ costly to do business in a relatively underdeveloped economy
Answer: more
570.) The likelihood that political forces will cause drastic changes in a country's business
environment and adversely affect the potential for a company to make a profit is called a
_____ risk.
Answer: political
571.) Which statement accurately describes the effects of social unrest on a country?
lOMoARcPSD| 61755304
Answer: Social unrest can result in abrupt changes in government which tend to have negative
economic implications.
572.) True or False: Economic risks are independent of political risks.
Answer: False
573.) One indicator of economic mismanagement in a country is the
Answer: rate of inflation
574.) The privatization movement was started in
Answer: Great Britain in the 1980s with the sale of British Telecom.
575.) A(n) ______ risk is one that arises from failure to follow statutory or regulatory obligations
and, therefore, one that can impact a trading partner.
Answer: legal
576.) It is ____________ for the government to expropriate profits from innovation through
excessive taxation.
Answer: legal
577.) A country's economic system and property rights regime are _____ predictors of economic
prospects.
Answer: good
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578.) When assessing country attractiveness, the costs might include _____.
Answer: corruption
579.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
Answer: TRUE
580.) The total annual income received by residents of a single nation is reflected in which
official measure?
Answer: gross national income
581.) declining trade barriers
Answer: better ability to export goods
582.) declining investment barriers
Answer: better ability to optimize location economies
583.) enhanced communication technologies
Answer: growth in e commerce
584.) enhanced transportation technologies
Answer: lowered distance between countries
lOMoARcPSD| 61755304
585.) Arguments for and against globalization: producers
Answer: -more markets to sell in
-can go bankrupt due to competition
586.) Arguments for and against globalization: the environment
Answer: -tougher laws lead to lower pollution rates
-lack of adequate regulation leads to abuse
587.) Arguments for and against globalization: consumers
Answer: -more products to choose from
-don't know how to products are made
588.) Arguments for and against globalization: workers
Answer: -development of better skills
-loss of jobs due to competition
589.) The primary reason Apple established production facilities in China for its iPhone was to
capitalize on
Answer: the ability of subcontractors to rapidly respond to changes in demand.
590.) Apple sources parts for its iPhone from around the world before assembling the phones in
China.
This reflects the
lOMoARcPSD| 61755304
Answer: globalization of production.
591.) The main factor driving Apple's decision to locate its iPhone production in China was
Answer: speed
592.) A common complaint among those pushing back against globalization is that
Answer: the benefits of globalization are not evenly distributed among socioeconomic classes.
593.) A major factor contributing to the fraying of globalization since 2008 isAnswer: more
regulations limiting credit.
594.) Which socioeconomic group is feeling left behind in the age of globalization?
Answer: the lower and middle classes
595.) Political system:
Right-wing Totalitarianism
Tribal Totalitarianism
Pseudo Democracy
Communist Totalitarianism
Representative Democracy
Theocratic Totalitarianism
Answer: Country:
Germany in the 1930s
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Kenya
Russia
China
U.S.
Saudi Arabia
204.) How can Venezuela's economic system best be described during Hugo Chavez's years as
president?
Answer: mixed
205.) Using the information on political economy in your text and the case above, how would
you characterize Venezuela's political economy under President Hugo Chávez?
Answer: communist totalitarianism
206.) Based on the information on political economy in the text and the case on Venezuela above,
whichstatement best characterizes the situation in Venezuela?
Answer: There is probably a high level of corruption within the government.
207.) Hugo Chavez's move to nationalize troubled firms is consistent with a
Answer: mixed economy
208.) According to the video, the standard of living in the United States is _____ as compared to
that of China.
Answer: higher
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209.) if gross national income per capita adjusted for differences in the cost of living is about
$13,000 in China, a developing country, and is about $56,000 in the United States, a
developed country, then
Answer: on average, Americans can afford more goods and services than their Chinese
counterparts.
210.) GNI figures are helpful in understanding an economy because they
Answer: tell us how poor a country is relative to another
211.) One reason why a global market does not fully exist is _____.
Answer: differences in legal regulations among national markets
212.) The United Nations was established by _____ countries committed to preserving peace
through economic cooperation and trade support.
Answer: 51
213.) The increasing number of trade agreements in place around the world creates a(n) _____ in
world trade.
Answer: increase
214.) The ______ has developed into the information backbone of the global economy and
reduced the constraints of location, scale, and time zone.
Answer: internet
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215.) Creating and managing a globally dispersed production system is made easier by the
______ in costs of information processing and communication.
Answer: decrease
216.) Based on rankings by Forbes in 2003, the second-largest source country of multinational
enterprises was _____.
Answer: Japan
217.) if you were to describe the global economy of the twenty-first century, it would be accurate
to say that
Answer: more nations are becoming part of the developed world.
218.) true or false: Russia, as it is today, is an example of a pseudo-democracy.
Answer: true - Under Vladimir Putin, Russia limits the political and civil liberties of opposition
groups, yet voices opposing his rule are still heard.
219.) What economic tactic was used when former communist countries removed price controls
and allowed prices to be set as the result of supply and demand?
Answer: deregulation
220.) A(n) ______ risk is the chance that conditions like a change in exchange rates will affect an
investment.
Multiple choice question.
Answer: economic
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221.) Legal risk is evident in a country that has _____.
Answer: a violation of property rights
222.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
True false question.
Answer: True
223.) Even though there are many state-owned businesses in China, many Western businesses
feel that they should still invest in the country because
Answer: the nation is moving toward a market-based system.
224.) True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the
full value of their labor.
Answer: false
596.) Global markets for industrial goods such as oil and wheat are more typical than those for
consumer products because _____.
Answer: industrial goods serve universal needs
597.) Land, labor, capital, and energy are all examples of factors of _____.
Answer: production
lOMoARcPSD| 61755304
598.) A country with high _____ has a barrier to international trade.
Answer: tariffs on imports of foreign goods
599.) Early outsourcing efforts were mostly limited to _____ activities while today numerous
business activities can be outsourced.
Answer: manufacturing
600.) What is an accurate description of the globalization of production?
Answer: Locating each stage of production where it can be done most economically
601.) Which of these companies is facing an impediment to the globalization of production?
Answer: US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an
overseas company.
602.) The International Monetary Fund and the World Bank are both examples of _____ that help
govern the global business system.
Answer: global institutions
603.) What is a challenge faced by companies entering the global market?
Answer: Differences in consumer tastes and preferences
604.) Which organization ensures that nation-states comply to the rules associated with trade
treaties signed by member states?
lOMoARcPSD| 61755304
Answer: The World Trade Organization
605.) The Johnson Automotive Group recently closed two of its US manufacturing facilities and
opened a new facility in Asia to take advantage of lower labor costs and savings in energy
costs. The company made this change in order to benefit from _____.
Answer: factors of production
606.) True or False: The International Monetary Fund (IMF) was established to ensure the
stability of the international monetary system.
Answer: True
607.) Advances in _____ technology make it possible for companies to outsource customer
service operations to another country.
Answer: communication
608.) When global institutions were introduced in the 1940s, governments in struggling nations
would turn to the _____ for low-interest loans needed for infrastructure projects such as
building roads.
Answer: World Bank
609.) What can be an impediment to the globalization of production?
Answer: transportation costs
610.) Global institutions are needed to
lOMoARcPSD| 61755304
Answer: stabilize and monitor the global marketplace.
611.) In return for offering loans, the International Monetary Fund (IMF) Answer: enforces its
economic policies on nations.
612.) The World Trade Organization (WTO) is the successor to ______.
Answer: GATT
613.) The ______ was established on October 24, 1945. Today, one of its key purposes is to
maintain international peace and security.
Answer: United Nations
614.) Which statement best describes the International Monetary Fund (IMF)?
Answer: The IMF is often seen as the lender of last resort to nation-states whose economies are
in turmoil.
615.) Foreign direct investment occurs when a(n)
Answer: investment is made by a company based in one country into a company or entity based
in another country.
616.) What is an accurate description of the World Bank?
Answer: It focuses on helping developing countries to fight poverty through investments in the
underlying structure of the country.
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617.) The International Monetary Fund (IMF) has been criticized forAnswer: minimizing a
nation's sovereignty.
618.) True or false: Experts forecast that world trade will continue to decline more rapidly than
world production.
Answer: False - World trade is expected to increase more rapidly than world production for the
foreseeable future
619.) International trade occurs when a firm _____.
Answer: exports goods or services to consumers in another country.
620.) What are three things that result from the fact that the volume of world trade has been
growing faster than world GDP?
Answer: -economies of nation-states are becoming more intertwined
-more firms are dispersing parts of their production process around the globe
-world has become significantly wealthier
621.) The globalization of markets and production implies that
Answer: domestic firms are facing intense competition from foreign firms.
622.) We live in an ever-increasing knowledge society. How does this affect international trade?
Answer: Consumers know more about goods made worldwide which drives demand for those
goods.
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623.) Using the results from Figure 1.1 in the text, it is evident that as the number of regional
trade agreements goes up, world trade across country borders tends to _____.
Answer: also go up
624.) Since 1970, the average yearly outflow of foreign direct investment has _____.
Answer: increased
625.) Just a few decades ago, it would have cost a business much more money to find buyers in a
foreign country. What has helped lower the cost of this process and allows buyers and
sellers to easily find each other regardless of their location?
Answer: internet
626.) True or false: While lowering trade barriers initially made global production possible, the
advent of technology made globalization a reality.
Answer: True
627.) In terms of innovation in transportation technology occurring since the 1950s, the
development of
_____ has essentially reduced the size of our entire world. (Check the two that apply.)
Answer: commercial jets
superfreighters
628.) A refrigerator parts manufacturer in China receives an order and loads the goods into a
large receptacle that is then loaded on a ship headed for the United States. When the ship
docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in
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Iowa. This scenario shows how _____ made the delivery of goods in the global
marketplace much easier.
Answer: containerization
629.) During the 1960s, which country was the predominant world power in terms of foreign
direct investment?
Answer: the U.S
630.) The decline of the United States standing in industrial power since the 1960s, is considered
a relative decline because it is a reflection of
Answer: the faster economic growth of other economies
631.) As the barriers to the free flow of goods, services, and capital fell during the 1970s, one
motivation for foreign direct investment by non-US firms was the desire to
Answer: move production activities to more desirable locations.
632.) The stock of foreign direct investment refers to the ______ of foreign investments.
Answer: total cumulative value
633.) there have been two notable trends in the demographics of multinational enterprises since
the 1960s. These include _____.
Answer: the rise of non-US
multinationals the growth of mini-
multinationals
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634.) Select the four facts that described the demographics of the global economy up until the
1960s.
Answer: U.S. dominance in world foreign direct investment
The dominance of large, multinational U.S. firms in the international business scene
Roughly half of the globe was off-limits to Western international business
U.S. dominance in the world economy and world trade
635.) In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S.
position compare today?
Answer: It has diminished industrial power.
636.) A country's stock of foreign direct investment is the total cumulative value of foreign
investments that are taken as a percentage of that country's _____.
Answer: GDP
637.) A(n) ______ is any entity that conducts business in at least two countries.
Answer: multinational enterprise
638.) According to the critics of globalization, what are two results from falling trade barriers?
Answer: A depression of wages in developed nations
The destruction of manufacturing jobs in advanced economies
639.) Studies exploring the share of labor in national income over the last two decades show that
the share of national income accounted for by skilled labor has
lOMoARcPSD| 61755304
Answer: increased
640.) Evidence suggests that _____ has impacted the declining share of national income enjoyed
by labor more so than globalization has.
Answer: technological change
641.) One concern voiced by critics of globalization is that
Answer: an interdependent global economy shifts economic power away from national
governments and toward organizations such as the United Nations.
642.) According to critics of globalization, increased free trade and investment over the past few
decades have
Answer: broadened the gap between the rich and poor nations.
643.) By the end of the 1970s in Great Britain, state-owned companies monopolized the
telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of
which political system in place at the time?
Answer: social democracy
644.) How are monopolies viewed in a market economy?
Answer: Monopolies are considered a negative force as they can restrict output and increase
prices.
645.) The political economy of a country refers to the interaction of the political, economic, and
_____ systems of a country.
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Answer: legal
646.) Political systems that emphasize individualism tend to promote _____.
Answer: democracy
647.) ______ refers to a political system that values the needs of society over that of an
individualAnswer: collectivism
648.) Plato would have agreed that society should be stratified into classes and ______ were best
suited to rule society.
Answer: philosophers and soldiers
649.) in the early 20th century, communists differed from social democrats in that communists
believed in
Answer: a strategy of revolutionary action.
650.) ______ refers to the process of selling state-owned enterprises to private investors.
Answer: privatization
651.) ______ refers to a philosophy that promotes the free exercise of one's goals and desires in
economic and political pursuits
Answer: individualism
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652.) Identify the accurate statement about individualism.
Answer: It stresses that society should be based on individual economic and political freedoms.
653.) Which statement BEST describes a totalitarian system?
Answer: It is a form of government in which the state recognizes no limits to its authority and
strives to regulate all aspects of public and private life.
654.) China and Vietnam have experienced greater individual freedom in the economic sphere;
however, this is not a reflection of the presence of a(n) _____.
Answer: democracy
655.) Nations adopting the pure form of democracy would
Answer: directly involve citizens in the decision making of the country.
656.) What condition paves the way for an ideal representative democracy?
Answer: Universal adult suffrage
657.) Which characteristic is typical within a totalitarian country?
Answer: There is no questioning of the ruler's decisions.
658.) Under Vladimir Putin, the government of Russia has becoming increasingly _____.
Answer: totalitarian
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659.) Theocratic totalitarianism is described as a political system
Answer: in which rulers govern based on religious rules and principles.
660.) In a nation where right-wing totalitarianism is present, you would find that
Answer: political freedom is restricted, frequently on the grounds that it would lead to the rise of
communism.
661.) A pseudo-democracy is the term given to a nation in which
Answer: A pseudo-democracy is the term given to a nation in which
662.) Along the continuum between democracy and totalitarianism, it can be said that
Answer: it is possible to have a democratic state in which some degree of collectivism exists.
663.) In a market economy, the government's role is to
Answer: encourage free and fair competition and minimize restrictive business practices.
664.) The production of goods in a pure market economy are determined by
Answer: supply and demand
665.) What is the objective of a pure command economy?
Answer: allotment of resources for the overall good of society
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666.) Which Greek philosopher is credited with advocating the origins of collectivism?
Answer: Plato
667.) While a pure command economy is thought to be based on the collective good of a society,
it often results in
Answer: state-owned enterprises that have fewer reasons to control costs.
668.) In a ______ economy, both private enterprise and state ownership co-exist.
Answer: mixed
669.) ______ measures the total annual income received by residents of a country.
Answer: Gross national income
670.) The process of privatization fails to perform as expected when
Answer: newly privatized firms are protected from foreign competition.
671.) The ______ adjustment helps provide a more direct comparison of the living standards
found in different countries.
Answer: purchasing power parity
672.) The base used to make the purchasing power parity adjustment isAnswer: the cost of living
in the United States.
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673.) In some countries, barter agreements take the place of cash transactions and this skews the
"official" economic activity figures. This is referred to as _____.
Answer: the shadow economy
674.) he Human Development Index is based onAnswer: life expectancy at birth.
675.) One thing the Human Development Index does not assess but which Amartya Sen believes
should be included to determine development is
Answer: political freedoms
676.) When analyzing the process of innovation, it can be said that itAnswer: goes hand-in-hand
with entrepreneurship.
677.) One positive aspect of innovation is that it
Answer: increases the economic activity within a country.
678.) Which businessperson is an example of an entrepreneur?
Answer: Natalia, the CEO and founder of Mountain Top Inc., an adventure travel company
679.) Innovators and entrepreneurs flourish most in a _____ because _____.
Answer: market economy; it grants existing businesses and entrepreneurs the freedom to
improve their operations through innovation
lOMoARcPSD| 61755304
680.) Jeffrey Sachs argued that the ______ of a nation can have an impact on economic
development.
Answer: geography
681.) Sachs would agree that _____ helps explain why Malaysia and Singapore have been able to
overcome the issues associated with their tropical geography and achieve economic growth
faster than some tropical nations in Africa.
Answer: education
682.) ______ is one of the steps necessary for a country to shift toward a market-based economic
system.
Answer: privatization
683.) What is an example of a transaction that would take place in the shadow economy of a
country?
Answer: To avoid paying the federal gift tax, the broker advised his client to transfer the funds
without declaring them as a gift.
684.) ______ involves removing legal restrictions, typically in the economic sphere.
Answer: deregulation
685.) Privatization became a worldwide practice starting in the
Answer: 1980s
lOMoARcPSD| 61755304
686.) The long-run monetary benefits of doing business in a country are influenced by
theAnswer: purchasing power of consumers.
687.) When comparing early and late entrants into a market, it can be said that
Answer: early entrants build brand loyalty and gain experience in a country's business practices.
688.) It would probably be _____ costly to do business in a relatively underdeveloped economy
Answer: more
689.) The likelihood that political forces will cause drastic changes in a country's business
environment and adversely affect the potential for a company to make a profit is called a
_____ risk.
Answer: political
690.) Which statement accurately describes the effects of social unrest on a country?
Answer: Social unrest can result in abrupt changes in government which tend to have negative
economic implications.
691.) True or False: Economic risks are independent of political risks.
Answer: False
692.) One indicator of economic mismanagement in a country is the
lOMoARcPSD| 61755304
Answer: rate of inflation
693.) The privatization movement was started in
Answer: Great Britain in the 1980s with the sale of British Telecom.
694.) A(n) ______ risk is one that arises from failure to follow statutory or regulatory obligations
and, therefore, one that can impact a trading partner.
Answer: legal
695.) It is ____________ for the government to expropriate profits from innovation through
excessive taxation.
Answer: legal
696.) A country's economic system and property rights regime are _____ predictors of economic
prospects.
Answer: good
697.) When assessing country attractiveness, the costs might include _____.
Answer: corruption
698.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
Answer: TRUE
lOMoARcPSD| 61755304
699.) The total annual income received by residents of a single nation is reflected in which
official measure?
Answer: gross national income
700.) declining trade barriers
Answer: better ability to export goods
701.) declining investment barriers
Answer: better ability to optimize location economies
702.) enhanced communication technologies
Answer: growth in e commerce
703.) enhanced transportation technologies
Answer: lowered distance between countries
704.) Arguments for and against globalization: producers
Answer: -more markets to sell in
-can go bankrupt due to competition
705.) Arguments for and against globalization: the environment
lOMoARcPSD| 61755304
Answer: -tougher laws lead to lower pollution rates
-lack of adequate regulation leads to abuse
706.) Arguments for and against globalization: consumers
Answer: -more products to choose from
-don't know how to products are made
707.) Arguments for and against globalization: workers
Answer: -development of better skills
-loss of jobs due to competition
708.) The primary reason Apple established production facilities in China for its iPhone was to
capitalize on
Answer: the ability of subcontractors to rapidly respond to changes in demand.
709.) Apple sources parts for its iPhone from around the world before assembling the phones in
China.
This reflects the
Answer: globalization of production.
710.) The main factor driving Apple's decision to locate its iPhone production in China was
Answer: speed
711.) A common complaint among those pushing back against globalization is that
lOMoARcPSD| 61755304
Answer: the benefits of globalization are not evenly distributed among socioeconomic classes.
712.) A major factor contributing to the fraying of globalization since 2008 isAnswer: more
regulations limiting credit.
713.) Which socioeconomic group is feeling left behind in the age of globalization?
Answer: the lower and middle classes
714.) Political system:
Right-wing Totalitarianism
Tribal Totalitarianism
Pseudo Democracy
Communist Totalitarianism
Representative Democracy
Theocratic Totalitarianism
Answer: Country:
Germany in the 1930s
Kenya
Russia
China
U.S.
Saudi Arabia
225.) How can Venezuela's economic system best be described during Hugo Chavez's years as
president?
lOMoARcPSD| 61755304
Answer: mixed
226.) Using the information on political economy in your text and the case above, how would
you characterize Venezuela's political economy under President Hugo Chávez?
Answer: communist totalitarianism
227.) Based on the information on political economy in the text and the case on Venezuela above,
whichstatement best characterizes the situation in Venezuela?
Answer: There is probably a high level of corruption within the government.
228.) Hugo Chavez's move to nationalize troubled firms is consistent with a
Answer: mixed economy
229.) According to the video, the standard of living in the United States is _____ as compared to
that of China.
Answer: higher
230.) if gross national income per capita adjusted for differences in the cost of living is about
$13,000 in China, a developing country, and is about $56,000 in the United States, a
developed country, then
Answer: on average, Americans can afford more goods and services than their Chinese
counterparts.
231.) GNI figures are helpful in understanding an economy because they
lOMoARcPSD| 61755304
Answer: tell us how poor a country is relative to another
232.) One reason why a global market does not fully exist is _____.
Answer: differences in legal regulations among national markets
233.) The United Nations was established by _____ countries committed to preserving peace
through economic cooperation and trade support.
Answer: 51
234.) The increasing number of trade agreements in place around the world creates a(n) _____ in
world trade.
Answer: increase
235.) The ______ has developed into the information backbone of the global economy and
reduced the constraints of location, scale, and time zone.
Answer: internet
236.) Creating and managing a globally dispersed production system is made easier by the
______ in costs of information processing and communication.
Answer: decrease
237.) Based on rankings by Forbes in 2003, the second-largest source country of multinational
enterprises was _____.
Answer: Japan
lOMoARcPSD| 61755304
238.) if you were to describe the global economy of the twenty-first century, it would be accurate
to say that
Answer: more nations are becoming part of the developed world.
239.) true or false: Russia, as it is today, is an example of a pseudo-democracy.
Answer: true - Under Vladimir Putin, Russia limits the political and civil liberties of opposition
groups, yet voices opposing his rule are still heard.
240.) What economic tactic was used when former communist countries removed price controls
and allowed prices to be set as the result of supply and demand?
Answer: deregulation
241.) A(n) ______ risk is the chance that conditions like a change in exchange rates will affect an
investment.
Multiple choice question.
Answer: economic
242.) Legal risk is evident in a country that has _____.
Answer: a violation of property rights
243.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
True false question.
Answer: True
lOMoARcPSD| 61755304
244.) Even though there are many state-owned businesses in China, many Western businesses
feel that they should still invest in the country because
Answer: the nation is moving toward a market-based system.
245.) True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the
full value of their labor.
Answer: false
715.) Global markets for industrial goods such as oil and wheat are more typical than those for
consumer products because _____.
Answer: industrial goods serve universal needs
716.) Land, labor, capital, and energy are all examples of factors of _____.
Answer: production
717.) A country with high _____ has a barrier to international trade.
Answer: tariffs on imports of foreign goods
718.) Early outsourcing efforts were mostly limited to _____ activities while today numerous
business activities can be outsourced.
Answer: manufacturing
719.) What is an accurate description of the globalization of production?
lOMoARcPSD| 61755304
Answer: Locating each stage of production where it can be done most economically
720.) Which of these companies is facing an impediment to the globalization of production?
Answer: US law dictates that Tru-Brite Dental cannot send X-rays electronically to be read by an
overseas company.
721.) The International Monetary Fund and the World Bank are both examples of _____ that help
govern the global business system.
Answer: global institutions
722.) What is a challenge faced by companies entering the global market?
Answer: Differences in consumer tastes and preferences
723.) Which organization ensures that nation-states comply to the rules associated with trade
treaties signed by member states?
Answer: The World Trade Organization
724.) The Johnson Automotive Group recently closed two of its US manufacturing facilities and
opened a new facility in Asia to take advantage of lower labor costs and savings in energy
costs. The company made this change in order to benefit from _____.
Answer: factors of production
725.) True or False: The International Monetary Fund (IMF) was established to ensure the
stability of the international monetary system.
lOMoARcPSD| 61755304
Answer: True
726.) Advances in _____ technology make it possible for companies to outsource customer
service operations to another country.
Answer: communication
727.) When global institutions were introduced in the 1940s, governments in struggling nations
would turn to the _____ for low-interest loans needed for infrastructure projects such as
building roads.
Answer: World Bank
728.) What can be an impediment to the globalization of production?
Answer: transportation costs
729.) Global institutions are needed to
Answer: stabilize and monitor the global marketplace.
730.) In return for offering loans, the International Monetary Fund (IMF) Answer: enforces its
economic policies on nations.
731.) The World Trade Organization (WTO) is the successor to ______.
Answer: GATT
lOMoARcPSD| 61755304
732.) The ______ was established on October 24, 1945. Today, one of its key purposes is to
maintain international peace and security.
Answer: United Nations
733.) Which statement best describes the International Monetary Fund (IMF)?
Answer: The IMF is often seen as the lender of last resort to nation-states whose economies are
in turmoil.
734.) Foreign direct investment occurs when a(n)
Answer: investment is made by a company based in one country into a company or entity based
in another country.
735.) What is an accurate description of the World Bank?
Answer: It focuses on helping developing countries to fight poverty through investments in the
underlying structure of the country.
736.) The International Monetary Fund (IMF) has been criticized forAnswer: minimizing a
nation's sovereignty.
737.) True or false: Experts forecast that world trade will continue to decline more rapidly than
world production.
Answer: False - World trade is expected to increase more rapidly than world production for the
foreseeable future
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738.) International trade occurs when a firm _____.
Answer: exports goods or services to consumers in another country.
739.) What are three things that result from the fact that the volume of world trade has been
growing faster than world GDP?
Answer: -economies of nation-states are becoming more intertwined
-more firms are dispersing parts of their production process around the globe
-world has become significantly wealthier
740.) The globalization of markets and production implies that
Answer: domestic firms are facing intense competition from foreign firms.
741.) We live in an ever-increasing knowledge society. How does this affect international trade?
Answer: Consumers know more about goods made worldwide which drives demand for those
goods.
742.) Using the results from Figure 1.1 in the text, it is evident that as the number of regional
trade agreements goes up, world trade across country borders tends to _____.
Answer: also go up
743.) Since 1970, the average yearly outflow of foreign direct investment has _____.
Answer: increased
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744.) Just a few decades ago, it would have cost a business much more money to find buyers in a
foreign country. What has helped lower the cost of this process and allows buyers and
sellers to easily find each other regardless of their location?
Answer: internet
745.) True or false: While lowering trade barriers initially made global production possible, the
advent of technology made globalization a reality.
Answer: True
746.) In terms of innovation in transportation technology occurring since the 1950s, the
development of
_____ has essentially reduced the size of our entire world. (Check the two that apply.)
Answer: commercial jets
superfreighters
747.) A refrigerator parts manufacturer in China receives an order and loads the goods into a
large receptacle that is then loaded on a ship headed for the United States. When the ship
docks, this receptacle is placed onto a truck and the goods are delivered to a warehouse in
Iowa. This scenario shows how _____ made the delivery of goods in the global
marketplace much easier.
Answer: containerization
748.) During the 1960s, which country was the predominant world power in terms of foreign
direct investment?
Answer: the U.S
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749.) The decline of the United States standing in industrial power since the 1960s, is considered
a relative decline because it is a reflection of
Answer: the faster economic growth of other economies
750.) As the barriers to the free flow of goods, services, and capital fell during the 1970s, one
motivation for foreign direct investment by non-US firms was the desire to
Answer: move production activities to more desirable locations.
751.) The stock of foreign direct investment refers to the ______ of foreign investments.
Answer: total cumulative value
752.) there have been two notable trends in the demographics of multinational enterprises since
the 1960s. These include _____.
Answer: the rise of non-US
multinationals the growth of mini-
multinationals
753.) Select the four facts that described the demographics of the global economy up until the
1960s.
Answer: U.S. dominance in world foreign direct investment
The dominance of large, multinational U.S. firms in the international business scene
Roughly half of the globe was off-limits to Western international business
U.S. dominance in the world economy and world trade
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754.) In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S.
position compare today?
Answer: It has diminished industrial power.
755.) A country's stock of foreign direct investment is the total cumulative value of foreign
investments that are taken as a percentage of that country's _____.
Answer: GDP
756.) A(n) ______ is any entity that conducts business in at least two countries.
Answer: multinational enterprise
757.) According to the critics of globalization, what are two results from falling trade barriers?
Answer: A depression of wages in developed nations
The destruction of manufacturing jobs in advanced economies
758.) Studies exploring the share of labor in national income over the last two decades show that
the share of national income accounted for by skilled labor has
Answer: increased
759.) Evidence suggests that _____ has impacted the declining share of national income enjoyed
by labor more so than globalization has.
Answer: technological change
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760.) One concern voiced by critics of globalization is that
Answer: an interdependent global economy shifts economic power away from national
governments and toward organizations such as the United Nations.
761.) According to critics of globalization, increased free trade and investment over the past few
decades have
Answer: broadened the gap between the rich and poor nations.
762.) By the end of the 1970s in Great Britain, state-owned companies monopolized the
telecommunications, gas, railway, electric, and shipbuilding industries. This was a reflection of
which political system in place at the time?
Answer: social democracy
763.) How are monopolies viewed in a market economy?
Answer: Monopolies are considered a negative force as they can restrict output and increase
prices.
764.) The political economy of a country refers to the interaction of the political, economic, and
_____ systems of a country.
Answer: legal
765.) Political systems that emphasize individualism tend to promote _____.
Answer: democracy
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766.) ______ refers to a political system that values the needs of society over that of an
individualAnswer: collectivism
767.) Plato would have agreed that society should be stratified into classes and ______ were best
suited to rule society.
Answer: philosophers and soldiers
768.) in the early 20th century, communists differed from social democrats in that communists
believed in
Answer: a strategy of revolutionary action.
769.) ______ refers to the process of selling state-owned enterprises to private investors.
Answer: privatization
770.) ______ refers to a philosophy that promotes the free exercise of one's goals and desires in
economic and political pursuits
Answer: individualism
771.) Identify the accurate statement about individualism.
Answer: It stresses that society should be based on individual economic and political freedoms.
772.) Which statement BEST describes a totalitarian system?
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Answer: It is a form of government in which the state recognizes no limits to its authority and
strives to regulate all aspects of public and private life.
773.) China and Vietnam have experienced greater individual freedom in the economic sphere;
however, this is not a reflection of the presence of a(n) _____.
Answer: democracy
774.) Nations adopting the pure form of democracy would
Answer: directly involve citizens in the decision making of the country.
775.) What condition paves the way for an ideal representative democracy?
Answer: Universal adult suffrage
776.) Which characteristic is typical within a totalitarian country?
Answer: There is no questioning of the ruler's decisions.
777.) Under Vladimir Putin, the government of Russia has becoming increasingly _____.
Answer: totalitarian
778.) Theocratic totalitarianism is described as a political system
Answer: in which rulers govern based on religious rules and principles.
779.) In a nation where right-wing totalitarianism is present, you would find that
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Answer: political freedom is restricted, frequently on the grounds that it would lead to the rise of
communism.
780.) A pseudo-democracy is the term given to a nation in which
Answer: A pseudo-democracy is the term given to a nation in which
781.) Along the continuum between democracy and totalitarianism, it can be said that
Answer: it is possible to have a democratic state in which some degree of collectivism exists.
782.) In a market economy, the government's role is to
Answer: encourage free and fair competition and minimize restrictive business practices.
783.) The production of goods in a pure market economy are determined by
Answer: supply and demand
784.) What is the objective of a pure command economy?
Answer: allotment of resources for the overall good of society
785.) Which Greek philosopher is credited with advocating the origins of collectivism?
Answer: Plato
786.) While a pure command economy is thought to be based on the collective good of a society,
it often results in
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Answer: state-owned enterprises that have fewer reasons to control costs.
787.) In a ______ economy, both private enterprise and state ownership co-exist.
Answer: mixed
788.) ______ measures the total annual income received by residents of a country.
Answer: Gross national income
789.) The process of privatization fails to perform as expected when
Answer: newly privatized firms are protected from foreign competition.
790.) The ______ adjustment helps provide a more direct comparison of the living standards
found in different countries.
Answer: purchasing power parity
791.) The base used to make the purchasing power parity adjustment isAnswer: the cost of living
in the United States.
792.) In some countries, barter agreements take the place of cash transactions and this skews the
"official" economic activity figures. This is referred to as _____.
Answer: the shadow economy
793.) he Human Development Index is based onAnswer: life expectancy at birth.
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794.) One thing the Human Development Index does not assess but which Amartya Sen believes
should be included to determine development is
Answer: political freedoms
795.) When analyzing the process of innovation, it can be said that itAnswer: goes hand-in-hand
with entrepreneurship.
796.) One positive aspect of innovation is that it
Answer: increases the economic activity within a country.
797.) Which businessperson is an example of an entrepreneur?
Answer: Natalia, the CEO and founder of Mountain Top Inc., an adventure travel company
798.) Innovators and entrepreneurs flourish most in a _____ because _____.
Answer: market economy; it grants existing businesses and entrepreneurs the freedom to
improve their operations through innovation
799.) Jeffrey Sachs argued that the ______ of a nation can have an impact on economic
development.
Answer: geography
800.) Sachs would agree that _____ helps explain why Malaysia and Singapore have been able to
overcome the issues associated with their tropical geography and achieve economic growth
faster than some tropical nations in Africa.
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Answer: education
801.) ______ is one of the steps necessary for a country to shift toward a market-based economic
system.
Answer: privatization
802.) What is an example of a transaction that would take place in the shadow economy of a
country?
Answer: To avoid paying the federal gift tax, the broker advised his client to transfer the funds
without declaring them as a gift.
803.) ______ involves removing legal restrictions, typically in the economic sphere.
Answer: deregulation
804.) Privatization became a worldwide practice starting in the
Answer: 1980s
805.) The long-run monetary benefits of doing business in a country are influenced by
theAnswer: purchasing power of consumers.
806.) When comparing early and late entrants into a market, it can be said that
Answer: early entrants build brand loyalty and gain experience in a country's business practices.
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807.) It would probably be _____ costly to do business in a relatively underdeveloped economy
Answer: more
808.) The likelihood that political forces will cause drastic changes in a country's business
environment and adversely affect the potential for a company to make a profit is called a
_____ risk.
Answer: political
809.) Which statement accurately describes the effects of social unrest on a country?
Answer: Social unrest can result in abrupt changes in government which tend to have negative
economic implications.
810.) True or False: Economic risks are independent of political risks.
Answer: False
811.) One indicator of economic mismanagement in a country is the
Answer: rate of inflation
812.) The privatization movement was started in
Answer: Great Britain in the 1980s with the sale of British Telecom.
813.) A(n) ______ risk is one that arises from failure to follow statutory or regulatory obligations
and, therefore, one that can impact a trading partner.
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Answer: legal
814.) It is ____________ for the government to expropriate profits from innovation through
excessive taxation.
Answer: legal
815.) A country's economic system and property rights regime are _____ predictors of economic
prospects.
Answer: good
816.) When assessing country attractiveness, the costs might include _____.
Answer: corruption
817.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
Answer: TRUE
818.) The total annual income received by residents of a single nation is reflected in which
official measure?
Answer: gross national income
819.) declining trade barriers
Answer: better ability to export goods
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820.) declining investment barriers
Answer: better ability to optimize location economies
821.) enhanced communication technologies
Answer: growth in e commerce
822.) enhanced transportation technologies
Answer: lowered distance between countries
823.) Arguments for and against globalization: producers
Answer: -more markets to sell in
-can go bankrupt due to competition
824.) Arguments for and against globalization: the environment
Answer: -tougher laws lead to lower pollution rates
-lack of adequate regulation leads to abuse
825.) Arguments for and against globalization: consumers
Answer: -more products to choose from
-don't know how to products are made
826.) Arguments for and against globalization: workers
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Answer: -development of better skills
-loss of jobs due to competition
827.) The primary reason Apple established production facilities in China for its iPhone was to
capitalize on
Answer: the ability of subcontractors to rapidly respond to changes in demand.
828.) Apple sources parts for its iPhone from around the world before assembling the phones in
China.
This reflects the
Answer: globalization of production.
829.) The main factor driving Apple's decision to locate its iPhone production in China was
Answer: speed
830.) A common complaint among those pushing back against globalization is that
Answer: the benefits of globalization are not evenly distributed among socioeconomic classes.
831.) A major factor contributing to the fraying of globalization since 2008 isAnswer: more
regulations limiting credit.
832.) Which socioeconomic group is feeling left behind in the age of globalization?
Answer: the lower and middle classes
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833.) Political system:
Right-wing Totalitarianism
Tribal Totalitarianism
Pseudo Democracy
Communist Totalitarianism
Representative Democracy
Theocratic Totalitarianism
Answer: Country:
Germany in the 1930s
Kenya
Russia
China
U.S.
Saudi Arabia
246.) How can Venezuela's economic system best be described during Hugo Chavez's years as
president?
Answer: mixed
247.) Using the information on political economy in your text and the case above, how would
you characterize Venezuela's political economy under President Hugo Chávez?
Answer: communist totalitarianism
248.) Based on the information on political economy in the text and the case on Venezuela above,
whichstatement best characterizes the situation in Venezuela?
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Answer: There is probably a high level of corruption within the government.
249.) Hugo Chavez's move to nationalize troubled firms is consistent with a
Answer: mixed economy
250.) According to the video, the standard of living in the United States is _____ as compared to
that of China.
Answer: higher
251.) if gross national income per capita adjusted for differences in the cost of living is about
$13,000 in China, a developing country, and is about $56,000 in the United States, a
developed country, then
Answer: on average, Americans can afford more goods and services than their Chinese
counterparts.
252.) GNI figures are helpful in understanding an economy because they
Answer: tell us how poor a country is relative to another
253.) One reason why a global market does not fully exist is _____.
Answer: differences in legal regulations among national markets
254.) The United Nations was established by _____ countries committed to preserving peace
through economic cooperation and trade support.
Answer: 51
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255.) The increasing number of trade agreements in place around the world creates a(n) _____ in
world trade.
Answer: increase
256.) The ______ has developed into the information backbone of the global economy and
reduced the constraints of location, scale, and time zone.
Answer: internet
257.) Creating and managing a globally dispersed production system is made easier by the
______ in costs of information processing and communication.
Answer: decrease
258.) Based on rankings by Forbes in 2003, the second-largest source country of multinational
enterprises was _____.
Answer: Japan
259.) if you were to describe the global economy of the twenty-first century, it would be accurate
to say that
Answer: more nations are becoming part of the developed world.
260.) true or false: Russia, as it is today, is an example of a pseudo-democracy.
Answer: true - Under Vladimir Putin, Russia limits the political and civil liberties of opposition
groups, yet voices opposing his rule are still heard.
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261.) What economic tactic was used when former communist countries removed price controls
and allowed prices to be set as the result of supply and demand?
Answer: deregulation
262.) A(n) ______ risk is the chance that conditions like a change in exchange rates will affect an
investment.
Multiple choice question.
Answer: economic
263.) Legal risk is evident in a country that has _____.
Answer: a violation of property rights
264.) True or False: For privatization to work, it must be accompanied by a more general
deregulation and opening of the economy.
True false question.
Answer: True
265.) Even though there are many state-owned businesses in China, many Western businesses
feel that they should still invest in the country because
Answer: the nation is moving toward a market-based system.
266.) True or False: According to Karl Marx, the pay of workers in a capitalist society reflects the
full value of their labor.
Answer: false
