USB PHD Initial Research Proposal Template

Chapter 04
Business in a Globalized World
True / False Questions
1. Globalization directly and indirectly influences the politics, environment, geopolitics, and
economics of virtually every country in the world.
True False
2. Although many firms conduct business across national boundaries, most global commerce is
carried out by a small number of powerful firms.
True False
3. Even small local businesses often compete with global companies from around the world.
True False
4. The importing of foreign goods by U.S. firms is called foreign direct investment.
True False
5. The main purpose of inversion is to reduce corporate income tax obligations.
True False
4-1
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McGraw-Hill Education.
6. The World Bank makes currency exchange easier for member countries so that they can
participate in global trade.
True False
7. The World Trade Organization conducts negotiations, called "cycles," on various topics, rotating its
meetings among different cities.
True False
8. Under the World Trade Organization's most favored nation rule, member countries may not
discriminate against foreign products for any reason.
True False
9. Globalization is accepted worldwide and creates little controversy.
True False
10. Productivity rises more quickly when countries produce goods and services for which they have a
natural talent.
True False
11. Only manufacturing jobs are being lost through globalization.
True False
12. Critics of globalization support the spread of American ideals and culture throughout the rest of
the world.
True False
4-2
13. Most nations in the world share similar political, social and economic beliefs.
True False
14. At the beginning of the 20th century, no country in the world had universal suffrage.
True False
15. The term sector refers to broad divisions of a whole.
True False
Multiple Choice Questions
16. Global market channels involve a firm producing goods in:
A. Their home country and exporting them to other countries.
B. Their home country to sell at home.
C. A foreign country to sell at home.
D. A foreign country to sell abroad.
17. A firm that has global operations has:
A. All of their manufacturing and service operations abroad.
B. Some or all of their manufacturing or service operations abroad.
C. Manufacturing but not service operations abroad.
D. Service but not manufacturing operations abroad.
4-3
18. A firm that would like to develop a global supply chain would:
A. Manufacture components or supplies in other countries.
B. Sell raw materials, components or supplies produced at home abroad.
C. Purchase raw materials, components, or supplies from sellers in other countries.
D. Check products that were manufactured abroad for defects in their home country.
19. The three strategies of globalization can be summarized using what three words?
A. Channels, operations, and chains.
B. Export, locate, and purchase.
C. Sell, make, and buy.
D. Ethics, import, and sell.
20. According to the United Nations, how many transnational corporations operate in the global
economy?
A. 49,000.
B. 104,000.
C. 290,000.
D. 900,000.
21. Which of the following statements accurately describe the practice of tax inversion?
A. A company shifts their headquarters to a foreign country.
B. A company decreases cash holdings in a foreign country.
C. A company increases debt in their home country.
D. Both A and C, but not B.
4-4
22. Microfinance refers to:
A. Banks lending money to a very small number of businesses.
B. Banks lending money to low-income businesses.
C. Banks lending very small amounts of money to wealthy businesses.
D. Banks charging low fees for all business loans.
23. An example of an international financial and trade institution is:
A. World Bank.
B. International Monetary Fund.
C. World Trade Organization.
D. All of the above.
24. Representation on the World Bank's board of directors is based on:
A. The size of the member nation's population.
B. The size of the member nation's economy.
C. The size of the member nation's land mass.
D. Equal representation of all member nations.
25. The primary goal of a "vulture fund" is to:
A. Provide countries with debt-relief.
B. Pay back loans in default.
C. Increase global financial stability.
D. Make a profit.
4-5
26. The primary purpose of the International Monetary Fund is to:
A. Lend foreign currency to member countries.
B. Exchange one currency for another.
C. Consolidate the debt facing third world nations.
D. Collect the interest on loans made by the World Bank to third-world nations.
27. The purpose of the World Trade Organization is to:
A. Impose barriers to free trade among nations.
B. Eliminate barriers to free trade among nations.
C. Develop trading partnerships between rich and poor nations.
D. Decrease globalization and free trade.
28. Under the World Trade Organization's most-favored nation rule:
A. All import restrictions imposed by other nations on their goods are illegal unless a cultural
waiver is issued.
B. All import restrictions are illegal unless proven scientifically.
C. Most-favored nations can impose heavy tariffs on other nations.
D. Most-favored nations can oppose the dumping of goods by any nation in their home market.
4-6
29. The theory of comparative advantage states that:
A. Productivity rises more quickly when countries produce goods and services for which they have
a natural talent.
B. Productivity decreases when countries produce goods and services based on their natural
resources.
C. All countries start out on an equal playing field.
D. Countries that operate under a policy of isolationism have a comparative advantage.
30. An individual who is a supporter of globalization would argue that it helps the developing world
by:
A. Giving entrepreneurs access to foreign investment funds to support economic development.
B. Allowing new ideas and technological innovations to spread quickly.
C. Providing people in developing countries with more jobs.
31. What U.S. company is the best example of using globalization to reduce the price of its products?
A. K-Mart.
B. Toys R Us.
C. Walmart.
D. Macy's.
4-7
32. A critic of globalization might argue that companies decide to manufacture in China mainly
because of China's:
A. Strict law enforcement.
B. High environmental standards.
C. Weak health and safety regulations.
D. Strong worker unions.
33. The term "race to the bottom" refers to:
A. Seeking to mine valuable minerals from the bottom of the ocean.
B. Moving production jobs to the country with the lowest labor cost.
C. Efforts to deconstruct the assembly process in manufacturing industries.
D. An old concept of globalization that is no longer relevant.
34. According to the United Nations, a feature of democracy is:
A. Fair elections.
B. An independent media.
C. A government with power balanced among executive, legislative, and judicial branches.
35. Single-party rule by communist parties still remains in:
A. Lithuania.
B. Vietnam.
C. Thailand.
D. Russia.
4-8
36. The most important agreement which codifies human rights is the:
A. The American Civil Liberties Act.
B. The Versailles Treaty.
C. The Universal Declaration of Human Rights.
D. The U.S. Declaration of Independence.
37. A society where economic power is concentrated in the hands of government officials and political
authorities is called:
A. A central state control system.
B. A social democracy.
C. A political control system.
D. A military dictatorship.
38. A free enterprise system refers to:
A. Economic assets that are privately owned and exchanged in an open market.
B. Property ownership by a centralized government.
C. A mix of privately owned and government controlled economic assets.
D. An index of economic freedom.
39. The Heritage Foundation scored which nation of the world among the most repressed in 2012?
A. Hong Kong.
B. Australia.
C. North Korea.
D. Singapore.
4-9
40. Assets that a person accumulates and owns at a certain point in time are called:
A. Income.
B. Equity.
C. Wealth.
D. Microfinance.
41. The percentage of global wealth concentrated at the Bottom of the Pyramid is:
A. 8 percent.
B. 22 percent.
C. 60 percent.
D. 70 percent.
42. Which statement(s) below are true about global income?
A. Income is how much one earns in a day or a year.
B. Income at the bottom of the pyramid varies from place to place.
C. Around 400 billion people globally sit at the bottom of the pyramid.
D. Both A and B, but not C.
43. Experts attribute the growth of nongovernmental organizations to:
A. The creation of global stock exchanges and enhanced currency transactions.
B. The globalization of marketing and converging consumer preferences.
C. Greater openness in many societies.
4-10
44. Government has distinctive resources and competencies including:
A. Knowledge of public policy.
B. Ability to enforce the rules.
C. Revenue from taxation.
45. An example of a Global Action Network, or GAN, is:
A. The World Trade Organization.
B. Nongovernmental organizations.
C. The Kimberley Process.
D. The Heritage Foundation.
Short Answer Questions
46. What is a transnational corporation? How do these corporations operate in the global
marketplace?
4-11
47. Describe the roles of the World Bank, International Monetary Fund, and World Trade Organization
as international financial and trade institutions.
48. Discuss the benefits and costs of globalization. Provide examples of how globalization has helped
or harmed individual nations and the world economy.
49. Explain the theory of competitive advantage.
4-12
50. Compare and contrast the world's political and economic systems and their effects on
globalization.
51. Explain global wealth and power inequalities. What are the special challenges of serving the
"bottom of the pyramid" sector?
52. How can global action networks help global problem solving?
4-13
Chapter 04 Business in a Globalized World Answer Key
True / False Questions
1. Globalization directly and indirectly influences the politics, environment, geopolitics, and
economics of virtually every country in the world.
TRUE
Accessibility: Keyboard Navigation

Learning Objective: 04-01 Defining globalization and classifying the major ways in which companies enter the global
marketplace.
2. Although many firms conduct business across national boundaries, most global commerce is
carried out by a small number of powerful firms.
TRUE

marketplace.
3. Even small local businesses often compete with global companies from around the world.
TRUE

marketplace.
4-14
4. The importing of foreign goods by U.S. firms is called foreign direct investment.
FALSE

marketplace.
5. The main purpose of inversion is to reduce corporate income tax obligations.
TRUE

marketplace.
6. The World Bank makes currency exchange easier for member countries so that they can
participate in global trade.
FALSE

Learning Objective: 04-02 Identifying the international financial and trade institutions that have shaped the globalization process
in recent decades.
7. The World Trade Organization conducts negotiations, called "cycles," on various topics, rotating
its meetings among different cities.
FALSE

in recent decades.
4-15
8. Under the World Trade Organization's most favored nation rule, member countries may not
discriminate against foreign products for any reason.
TRUE

in recent decades.
9. Globalization is accepted worldwide and creates little controversy.
FALSE

Learning Objective: 04-03 Analyzing the benefits and costs of the globalization of business.
10. Productivity rises more quickly when countries produce goods and services for which they have
a natural talent.
TRUE

11. Only manufacturing jobs are being lost through globalization.
FALSE

4-16
12. Critics of globalization support the spread of American ideals and culture throughout the rest
of the world.
FALSE

13. Most nations in the world share similar political, social and economic beliefs.
FALSE

Learning Objective: 04-04 Identifying the major types of political and economic systems in which companies operate across the
world.
14. At the beginning of the 20th century, no country in the world had universal suffrage.
TRUE

world.
15. The term sector refers to broad divisions of a whole.
TRUE

Learning Objective: 04-06 Assessing how businesses can work collaboratively with governments and the civil sector to address
global social issues.
4-17
Multiple Choice Questions
16. Global market channels involve a firm producing goods in:
A. Their home country and exporting them to other countries.
B. Their home country to sell at home.
C. A foreign country to sell at home.
D. A foreign country to sell abroad.

Difficulty: 2 Medium
marketplace.
17. A firm that has global operations has:
A. All of their manufacturing and service operations abroad.
B. Some or all of their manufacturing or service operations abroad.
C. Manufacturing but not service operations abroad.
D. Service but not manufacturing operations abroad.

marketplace.
4-18
18. A firm that would like to develop a global supply chain would:
A. Manufacture components or supplies in other countries.
B. Sell raw materials, components or supplies produced at home abroad.
C. Purchase raw materials, components, or supplies from sellers in other countries.
D. Check products that were manufactured abroad for defects in their home country.

marketplace.
19. The three strategies of globalization can be summarized using what three words?
A. Channels, operations, and chains.
B. Export, locate, and purchase.
C. Sell, make, and buy.
D. Ethics, import, and sell.

Difficulty: 1 Easy
marketplace.
4-19
20. According to the United Nations, how many transnational corporations operate in the global
economy?
A. 49,000.
B. 104,000.
C. 290,000.
D. 900,000.

Difficulty: 3 Hard
marketplace.
21. Which of the following statements accurately describe the practice of tax inversion?
A. A company shifts their headquarters to a foreign country.
B. A company decreases cash holdings in a foreign country.
C. A company increases debt in their home country.
D. Both A and C, but not B.

Difficulty: 3 Hard
marketplace.
4-20
22. Microfinance refers to:
A. Banks lending money to a very small number of businesses.
B. Banks lending money to low-income businesses.
C. Banks lending very small amounts of money to wealthy businesses.
D. Banks charging low fees for all business loans.

Difficulty: 1 Easy
in recent decades.
23. An example of an international financial and trade institution is:
A. World Bank.
B. International Monetary Fund.
C. World Trade Organization.

Difficulty: 1 Easy
in recent decades.
4-21
24. Representation on the World Bank's board of directors is based on:
A. The size of the member nation's population.
B. The size of the member nation's economy.
C. The size of the member nation's land mass.
D. Equal representation of all member nations.

in recent decades.
25. The primary goal of a "vulture fund" is to:
A. Provide countries with debt-relief.
B. Pay back loans in default.
C. Increase global financial stability.
D. Make a profit.

in recent decades.
4-22
26. The primary purpose of the International Monetary Fund is to:
A. Lend foreign currency to member countries.
B. Exchange one currency for another.
C. Consolidate the debt facing third world nations.
D. Collect the interest on loans made by the World Bank to third-world nations.

in recent decades.
27. The purpose of the World Trade Organization is to:
A. Impose barriers to free trade among nations.
B. Eliminate barriers to free trade among nations.
C. Develop trading partnerships between rich and poor nations.
D. Decrease globalization and free trade.

in recent decades.
4-23
28. Under the World Trade Organization's most-favored nation rule:
A. All import restrictions imposed by other nations on their goods are illegal unless a cultural
waiver is issued.
B. All import restrictions are illegal unless proven scientifically.
C. Most-favored nations can impose heavy tariffs on other nations.
D. Most-favored nations can oppose the dumping of goods by any nation in their home
market.

Difficulty: 3 Hard
in recent decades.
29. The theory of comparative advantage states that:
A. Productivity rises more quickly when countries produce goods and services for which they
have a natural talent.
B. Productivity decreases when countries produce goods and services based on their natural
resources.
C. All countries start out on an equal playing field.
D. Countries that operate under a policy of isolationism have a comparative advantage.

Difficulty: 3 Hard
4-24
30. An individual who is a supporter of globalization would argue that it helps the developing
world by:
A. Giving entrepreneurs access to foreign investment funds to support economic development.
B. Allowing new ideas and technological innovations to spread quickly.
C. Providing people in developing countries with more jobs.

Difficulty: 1 Easy
31. What U.S. company is the best example of using globalization to reduce the price of its
products?
A. K-Mart.
B. Toys R Us.
C. Walmart.
D. Macy's.

Difficulty: 1 Easy
4-25
32. A critic of globalization might argue that companies decide to manufacture in China mainly
because of China's:
A. Strict law enforcement.
B. High environmental standards.
C. Weak health and safety regulations.
D. Strong worker unions.

Difficulty: 1 Easy
33. The term "race to the bottom" refers to:
A. Seeking to mine valuable minerals from the bottom of the ocean.
B. Moving production jobs to the country with the lowest labor cost.
C. Efforts to deconstruct the assembly process in manufacturing industries.
D. An old concept of globalization that is no longer relevant.

34. According to the United Nations, a feature of democracy is:
A. Fair elections.
B. An independent media.
C. A government with power balanced among executive, legislative, and judicial branches.
4-26
Difficulty: 1 Easy
world.
35. Single-party rule by communist parties still remains in:
A. Lithuania.
B. Vietnam.
C. Thailand.
D. Russia.

world.
36. The most important agreement which codifies human rights is the:
A. The American Civil Liberties Act.
B. The Versailles Treaty.
C. The Universal Declaration of Human Rights.
D. The U.S. Declaration of Independence.

Difficulty: 3 Hard
world.
4-27
37. A society where economic power is concentrated in the hands of government officials and
political authorities is called:
A. A central state control system.
B. A social democracy.
C. A political control system.
D. A military dictatorship.

world.
38. A free enterprise system refers to:
A. Economic assets that are privately owned and exchanged in an open market.
B. Property ownership by a centralized government.
C. A mix of privately owned and government controlled economic assets.
D. An index of economic freedom.

Difficulty: 1 Easy
world.
4-28
39. The Heritage Foundation scored which nation of the world among the most repressed in 2012?
A. Hong Kong.
B. Australia.
C. North Korea.
D. Singapore.

Difficulty: 3 Hard
world.
40. Assets that a person accumulates and owns at a certain point in time are called:
A. Income.
B. Equity.
C. Wealth.
D. Microfinance.

Learning Objective: 04-05 Understanding global inequalities of wealth and income and analyzing the special challenges of
serving those at the "bottom of the pyramid".
4-29
41. The percentage of global wealth concentrated at the Bottom of the Pyramid is:
A. 8 percent.
B. 22 percent.
C. 60 percent.
D. 70 percent.

42. Which statement(s) below are true about global income?
A. Income is how much one earns in a day or a year.
B. Income at the bottom of the pyramid varies from place to place.
C. Around 400 billion people globally sit at the bottom of the pyramid.
D. Both A and B, but not C.

Difficulty: 3 Hard
4-30
43. Experts attribute the growth of nongovernmental organizations to:
A. The creation of global stock exchanges and enhanced currency transactions.
B. The globalization of marketing and converging consumer preferences.
C. Greater openness in many societies.

Difficulty: 3 Hard
44. Government has distinctive resources and competencies including:
A. Knowledge of public policy.
B. Ability to enforce the rules.
C. Revenue from taxation.

Difficulty: 1 Easy
4-31
45. An example of a Global Action Network, or GAN, is:
A. The World Trade Organization.
B. Nongovernmental organizations.
C. The Kimberley Process.
D. The Heritage Foundation.

Short Answer Questions
46. What is a transnational corporation? How do these corporations operate in the global
marketplace?
Answers may vary.
marketplace.
4-32
47. Describe the roles of the World Bank, International Monetary Fund, and World Trade
Organization as international financial and trade institutions.
Answers may vary.
in recent decades.
48. Discuss the benefits and costs of globalization. Provide examples of how globalization has
helped or harmed individual nations and the world economy.
Answers may vary.
49. Explain the theory of competitive advantage.
Answers may vary.
4-33
50. Compare and contrast the world's political and economic systems and their effects on
globalization.
Answers may vary.
world.
51. Explain global wealth and power inequalities. What are the special challenges of serving the
"bottom of the pyramid" sector?
Answers may vary.
52. How can global action networks help global problem solving?
Answers may vary.
4-34

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Chapter 04

Business in a Globalized World

True / False Questions

5. The main purpose of inversion is to reduce corporate income tax obligations.

participate in global trade.

discriminate against foreign products for any reason.

9. Globalization is accepted worldwide and creates little controversy.

11. Only manufacturing jobs are being lost through globalization.

15. The term sector refers to broad divisions of a whole.

Multiple Choice Questions

16. Global market channels involve a firm producing goods in:

A. Their home country and exporting them to other countries.

B. Their home country to sell at home.

C. A foreign country to sell at home.

D. A foreign country to sell abroad.

17. A firm that has global operations has:

A. All of their manufacturing and service operations abroad.

B. Some or all of their manufacturing or service operations abroad.

C. Manufacturing but not service operations abroad.

D. Service but not manufacturing operations abroad.

A. Manufacture components or supplies in other countries.

B. Sell raw materials, components or supplies produced at home abroad.

C. Purchase raw materials, components, or supplies from sellers in other countries.

A. Channels, operations, and chains.

B. Export, locate, and purchase.

C. Sell, make, and buy.

D. Ethics, import, and sell.

A. A company shifts their headquarters to a foreign country.

B. A company decreases cash holdings in a foreign country.

C. A company increases debt in their home country.

D. Both A and C, but not B.

A. Banks lending money to a very small number of businesses.

B. Banks lending money to low-income businesses.

C. Banks lending very small amounts of money to wealthy businesses.

D. Banks charging low fees for all business loans.

23. An example of an international financial and trade institution is:

B. International Monetary Fund.

C. World Trade Organization.

D. All of the above.

24. Representation on the World Bank's board of directors is based on:

A. The size of the member nation's population.

B. The size of the member nation's economy.

C. The size of the member nation's land mass.

D. Equal representation of all member nations.

25. The primary goal of a "vulture fund" is to:

A. Provide countries with debt-relief.

B. Pay back loans in default.

C. Increase global financial stability.

A. Lend foreign currency to member countries.

B. Exchange one currency for another.

C. Consolidate the debt facing third world nations.

27. The purpose of the World Trade Organization is to:

A. Impose barriers to free trade among nations.

B. Eliminate barriers to free trade among nations.

C. Develop trading partnerships between rich and poor nations.

D. Decrease globalization and free trade.

28. Under the World Trade Organization's most-favored nation rule:

B. All import restrictions are illegal unless proven scientifically.

C. Most-favored nations can impose heavy tariffs on other nations.

C. All countries start out on an equal playing field.

D. Countries that operate under a policy of isolationism have a comparative advantage.

A. Giving entrepreneurs access to foreign investment funds to support economic development.

B. Allowing new ideas and technological innovations to spread quickly.