GSCM 311 Midterm Question and
answer verified to pass 2025/2026
globalization - correct answer ✔extension of MAKE or BUY decision BEYOND NATIONAL BORDERS
- exchange of information, ideas, and goods FASTER across the globe
Pros of globalization - correct answer ✔- increased awareness of other cultures and countries
- globalization encourages innovation
- INCOME of low cost labor in developing countries has increased
- developing countries have increased access to first-world products
Cons of globalization - correct answer ✔- unequal opportunities across the world
- world's wealth is increasingly concentrated
- globalization strategy is poorly managed (damage of environment)
What did Adam Smith do? - correct answer ✔wrote The Wealth of Nations
absolute advantage - correct answer ✔party can produce a good or service more efficiently than its
competitors
comparative advantage - correct answer ✔producing goods and service at lower opportunity cost
mercantilism - correct answer ✔countries controlling trade so they export more than they import
Thomas Friedman said... - correct answer ✔world has moved from periods of being round (trade
barriers high) to periods of being flat (where barriers to trade are lowered)
, Bretton Wood System - correct answer ✔- foundation of majority of world trade since 1944
- created financial and commodity interdependence
- US dollar as main trading currency
- TARIFFS reduced or eliminated
- free MOVEMENT between involved countries
European Union - correct answer ✔- most famous trading bloc
- non-tariff barriers to trade have been removed by member nations
- 27 members
- inspired by open borders trading between Belgium, Netherland, Luxembourg
African Continental Free Trade Agreement - correct answer ✔- remove tariffs from 90% of its goods
initially, will eventually allow free access to 97% of goods
- estimated to boost intra-African trade by 52% in 2022
Mercosur - correct answer ✔- comprises Argentina, Brazil, Paraguay, Uruguay, Venezuela
- associate countries are Chile, Bolivia, Colombia, Ecuador, Peru
- promote free trade and fluid movement of goods, people, and currency
NAFTA (replaced by USMCA in 2020) - correct answer ✔- gradually eliminated most tariffs and trade
barriers on products and services passing between US, Canada, Mexico
- effectively created a free-trade bloc
Regional Comprehensive Economic Partnership - correct answer ✔- will be world's largest trading bloc
- help China beat US in economic supremacy in Asia-Pacific region
answer verified to pass 2025/2026
globalization - correct answer ✔extension of MAKE or BUY decision BEYOND NATIONAL BORDERS
- exchange of information, ideas, and goods FASTER across the globe
Pros of globalization - correct answer ✔- increased awareness of other cultures and countries
- globalization encourages innovation
- INCOME of low cost labor in developing countries has increased
- developing countries have increased access to first-world products
Cons of globalization - correct answer ✔- unequal opportunities across the world
- world's wealth is increasingly concentrated
- globalization strategy is poorly managed (damage of environment)
What did Adam Smith do? - correct answer ✔wrote The Wealth of Nations
absolute advantage - correct answer ✔party can produce a good or service more efficiently than its
competitors
comparative advantage - correct answer ✔producing goods and service at lower opportunity cost
mercantilism - correct answer ✔countries controlling trade so they export more than they import
Thomas Friedman said... - correct answer ✔world has moved from periods of being round (trade
barriers high) to periods of being flat (where barriers to trade are lowered)
, Bretton Wood System - correct answer ✔- foundation of majority of world trade since 1944
- created financial and commodity interdependence
- US dollar as main trading currency
- TARIFFS reduced or eliminated
- free MOVEMENT between involved countries
European Union - correct answer ✔- most famous trading bloc
- non-tariff barriers to trade have been removed by member nations
- 27 members
- inspired by open borders trading between Belgium, Netherland, Luxembourg
African Continental Free Trade Agreement - correct answer ✔- remove tariffs from 90% of its goods
initially, will eventually allow free access to 97% of goods
- estimated to boost intra-African trade by 52% in 2022
Mercosur - correct answer ✔- comprises Argentina, Brazil, Paraguay, Uruguay, Venezuela
- associate countries are Chile, Bolivia, Colombia, Ecuador, Peru
- promote free trade and fluid movement of goods, people, and currency
NAFTA (replaced by USMCA in 2020) - correct answer ✔- gradually eliminated most tariffs and trade
barriers on products and services passing between US, Canada, Mexico
- effectively created a free-trade bloc
Regional Comprehensive Economic Partnership - correct answer ✔- will be world's largest trading bloc
- help China beat US in economic supremacy in Asia-Pacific region
