INTERNATIONAL BUSINESS EXAM 1 REVIEW QUESTIONS AND
ANSWERS
Globalization - CORRECT ANSWER✅✅Movement from thinking about markets in terms of geographic
areas to thinking about them as something that transcends borders; the shift towards a more integrated
and interdependent world economy
World-wide sourcing - CORRECT ANSWER✅✅All types of businesses are getting inputs from several
global locations
Globalization of markets - CORRECT ANSWER✅✅Merging of historically distinct and separate national
markets into one huge global market;
Globalization of production - CORRECT ANSWER✅✅Sourcing of goods and services from locations
around the globe to take advantage of national differences in cost and quality factors of production
Factors of production - CORRECT ANSWER✅✅inputs into the productive processes of a firm, including
labor management, land, capital, and technological know how
General Agreement on Tariffs and Trade (GATT) - CORRECT ANSWER✅✅International treaty that
committed signatures to lowering barriers to the free flow of goods across national borders and led to
the WTO
World Trade Organization - CORRECT ANSWER✅✅Primarily responsible for policing the world trading
system and making sure nation-states adhere to the rules laid down in trade treaties signed by WTO
member states (97% of world trade countries)
International Monetary Fund - CORRECT ANSWER✅✅International institution set up to maintain order
in the international monetary system
United Nations - CORRECT ANSWER✅✅International organization made up of 193 countries to
promote peace, security, and cooperation
, G20 - CORRECT ANSWER✅✅Comprises the finance ministers and central bank governors of the 19
largest economies in the world, plus representatives from the EU and European Central Bank
International Trade - CORRECT ANSWER✅✅Occurs when a firm exports goods or services to consumers
in another country
Foreign Direct Investment (FDI) - CORRECT ANSWER✅✅Direct investment in business operations in a
foreign country
Two factors that underlie trend towards greater globalization - CORRECT ANSWER✅✅Declining barriers
to international trade and technological chanve
Moore's Law - CORRECT ANSWER✅✅The power of microprocessor technology doubles and its costs of
production fall in half every 18 months
Stock of FDI - CORRECT ANSWER✅✅The total accumulated value of foreign-owned assets at a given
time
Multinational Enterprise - CORRECT ANSWER✅✅A firm that owns business operations in more than
one country
International Business - CORRECT ANSWER✅✅Any firm that engages in international trade or
investment
Two major forces in the global economy - CORRECT ANSWER✅✅trade and investment
Political economy - CORRECT ANSWER✅✅The political, economic, and legal systems of a country
Political system - CORRECT ANSWER✅✅System of government in a nation
ANSWERS
Globalization - CORRECT ANSWER✅✅Movement from thinking about markets in terms of geographic
areas to thinking about them as something that transcends borders; the shift towards a more integrated
and interdependent world economy
World-wide sourcing - CORRECT ANSWER✅✅All types of businesses are getting inputs from several
global locations
Globalization of markets - CORRECT ANSWER✅✅Merging of historically distinct and separate national
markets into one huge global market;
Globalization of production - CORRECT ANSWER✅✅Sourcing of goods and services from locations
around the globe to take advantage of national differences in cost and quality factors of production
Factors of production - CORRECT ANSWER✅✅inputs into the productive processes of a firm, including
labor management, land, capital, and technological know how
General Agreement on Tariffs and Trade (GATT) - CORRECT ANSWER✅✅International treaty that
committed signatures to lowering barriers to the free flow of goods across national borders and led to
the WTO
World Trade Organization - CORRECT ANSWER✅✅Primarily responsible for policing the world trading
system and making sure nation-states adhere to the rules laid down in trade treaties signed by WTO
member states (97% of world trade countries)
International Monetary Fund - CORRECT ANSWER✅✅International institution set up to maintain order
in the international monetary system
United Nations - CORRECT ANSWER✅✅International organization made up of 193 countries to
promote peace, security, and cooperation
, G20 - CORRECT ANSWER✅✅Comprises the finance ministers and central bank governors of the 19
largest economies in the world, plus representatives from the EU and European Central Bank
International Trade - CORRECT ANSWER✅✅Occurs when a firm exports goods or services to consumers
in another country
Foreign Direct Investment (FDI) - CORRECT ANSWER✅✅Direct investment in business operations in a
foreign country
Two factors that underlie trend towards greater globalization - CORRECT ANSWER✅✅Declining barriers
to international trade and technological chanve
Moore's Law - CORRECT ANSWER✅✅The power of microprocessor technology doubles and its costs of
production fall in half every 18 months
Stock of FDI - CORRECT ANSWER✅✅The total accumulated value of foreign-owned assets at a given
time
Multinational Enterprise - CORRECT ANSWER✅✅A firm that owns business operations in more than
one country
International Business - CORRECT ANSWER✅✅Any firm that engages in international trade or
investment
Two major forces in the global economy - CORRECT ANSWER✅✅trade and investment
Political economy - CORRECT ANSWER✅✅The political, economic, and legal systems of a country
Political system - CORRECT ANSWER✅✅System of government in a nation
