Chap003TB - CHAPTER 3 GLOBALIZATION AND THE MANAGER...

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CHAPTER 3 GLOBALIZATION AND THE MANAGER TRUE/FALSE Learning Goal 1 Explain what globalization is. Level of Learning 1 (Knows basic terms and facts) 3.1. Globalization is the process whereby national economies and business systems are becoming deeply interlinked with each other. Answer: True LG: 1/LL: 1 Page: 56 AG: 13 3.2. The process of globalization has slightly increased since the 1980s. Answer: False LG: 1/LL: 1 Page: 56 AG: 13 Learning Goal 2 Describe the processes driving globalization. Level of Learning 1 (Knows basic terms and facts) 3.3. In a market economy prices are set by the government. Answer: False LG: 2/LL: 1 Page: 56 AG: 13 3.4. A socialist economy is an economy in which businesses are owned by the state and prices are set by state planners. Answer: True LG: 2/LL: 1 Page: 56 AG: 13 3.5. International trade is the sale of a good or service across borders. Answer: True LG: 2/LL: 1 Page: 58 AG: 13 3.6. Foreign direct investment is investments by a company based in one nation in business activities in another nation. Answer: True LG: 2/LL: 1 Page: 58 AG: 13 3.7. Tariffs are limits on the number of items of a good that can be imported from a foreign nation. Answer: False LG: 2/LL: 1 Page: 58 AG: 13 85
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3.8. Quotas are taxes on imports. Answer: False LG: 2/LL: 1 Page: 58 AG: 13 3.9. Regional trade agreements increase tariffs and quotas between nations within a geographic region. Answer: False LG: 2/LL: 1 Page: 58 AG: 13 Level of Learning 2 (Understands concepts and principles) 3.10. In a market economy government regulation ensures that prices are set at certain levels. Answer: False LG: 2/LL: 2 Page: 56 AG: 13 Rationale: In a market economy prices are set by the interaction of supply and demand, not by government regulation. 3.11. Socialist economies inhibit rather than encourage cross-border trade and investment. Answer: True LG: 2/LL: 2 Page: 56 AG: 13 Rationale: By their nature, socialist economies are antithetical to globalization. They inhibit rather than encourage cross-border trade and investment. Foreign businesses are excluded from many sectors of the economy, if not the entire economy, and state-owned enterprises often focus inward on their own economy. 3.12. The transformation of socialist economies to market-based economies has created both opportunities and threats for Western businesses. Answer: True LG: 2/LL: 2 Page: 57 AG: 13 Rationale: The transformation of economies such as China’s and India’s to more open systems has created a plethora of opportunities and threats for Western businesses. Outsourcing of manufacturing and service activities to these nations has accelerated, as have investment in these nations. 3.13.
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This note was uploaded on 04/17/2011 for the course ENTP 6380 taught by Professor Picken,j during the Spring '08 term at Dallas.

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Chap003TB - CHAPTER 3 GLOBALIZATION AND THE MANAGER...

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