Pre-Assessment: Managing in a Global Business Environment
1. Which negative outcome on political systems comes from globalization?: -
Creation of isolationist policies
2. Which factor results in a higher rate of globalization?: Reduced trade barriers
3. What are the four factors in Ghemawat's CAGE analysis?: Culture, adminis- tration, geography,
economy
4. What is a major drawback to the home country when companies outsource manufacturing jobs to
countries with lower worker wages?: Loss of manufac- turing jobs
5. A country has a characteristic traditional economic system with poor infra- structure and limited
economic opportunity. What is the impact of this system on the process of globalization?: The
globalization process is at a disadvantage as the country has a lower standard of living.
6. What is a characteristic of a market economy?: Firms seek to maximize profits.
7. Which impact does Islamic law directly have on businesses?: It forbids charging interest.
8. Which institution helps to maintain availability of global financing to solve trade deficit issues?:
International Monetary Fund
9. What is the current focus of the World Bank?: Improving quality of life.
10.For which concern has the World Trade Organization been criticized?: In- fluence of free trade
policies on labor rights
11.How is the Special Drawing Right of the International Monetary Fund (IMF) valued?: It is based
on the value of the five most significant members' currencies.
12.Two countries agree to open their borders to international business trans- action with one
another without tariffs. How does this affect global business?-
: It leads to developing free trade policies with strategic partners.
13.A country uses its established technology infrastructure to produce a good. What is the impact
of this infrastructure on trade?: It will create barriers to entry for other nations.
14.What was the economic impact of the North American Free Trade Agree- ment (NAFTA)?: The
shift of jobs away from low comparative advantage industries
15.A company that is located in Country A would like to sell products in Coun- try B. The government
of Country B is pushing for a tariff-based international trade agreement on the product. What is the
reasoning behind Country B's decision?: Country B seeks to protect its economy and give it the
opportunity for long-term expansion
16.Countries A and B participate in trade agreements that allow free trade among participant
countries. However, Country A imposed quotas on several imported products to protect its domestic
products. What is the effect, if any, on the domestic prices of these products?: Increases
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, Pre-Assessment: Managing in a Global Business Environment
17.Two countries decide to open up trade with each other. What is likely
to happen when trade opens up?: Jobs will increase in comparative advantage industries.
18.What is a purpose of a country implementing trade protectionism?: To protect an infant
industry
19.Country A and Country B are trying to mend their relationship. A company from Country A would
like to invest in a company in Country B. Which action by Country B will help these two countries
meet their goal?: Provide tax exemptions
20.Which level of regional economic integration is a key feature of a Customs Union?: Unified
trading policies with non-members
21.What is a drawback of creating regional trade agreements?: They shift employment
opportunities.
22.The United States-Mexico- Canada Agreement (USMCA), a modification of the North American
Free Trade Agreement (NAFTA), broadened the scope of free-trade between member nations and
tightened restrictions in the region. Which regulation was established by this new agreement?:
Almost half of all automobile parts must be made by a labor force that earns a minimum of $16
per hour by 2023.
23.A U.S. capital investment firm is researching new markets to enter to diversify its portfolio. The
director of foreign investments presented a pitch to the board of directors encouraging entry into the
Costa Rican telecommuni- cations market by investing in local companies in the region through
acquisi- tion. Which alliance supports this director's suggestion?: Central America Free Trade
Agreement
24.A firm based in Country A manufactures its products in Country B and pays the manufacturing
employees in the currency in which they are located. Which currency situation will result in the
maximum profit for the firm?: The currency in Country A is strong relative to the currency in
Country B.
25.Which drawback is associated with regional economic integration?: In- creased exclusive
internal trade
26.Which factor contributes to the creation of a monopoly?: Control of natural resources
27.Which convention provides gap fillers for terms that may not be expressly stated in agreements
between two companies?: Contracts for the International Sale of Goods
28.Which laws are violated by practices such as price-fixing, price discrimi- nation, restraints, and
monopolization?: Anti-trust
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1. Which negative outcome on political systems comes from globalization?: -
Creation of isolationist policies
2. Which factor results in a higher rate of globalization?: Reduced trade barriers
3. What are the four factors in Ghemawat's CAGE analysis?: Culture, adminis- tration, geography,
economy
4. What is a major drawback to the home country when companies outsource manufacturing jobs to
countries with lower worker wages?: Loss of manufac- turing jobs
5. A country has a characteristic traditional economic system with poor infra- structure and limited
economic opportunity. What is the impact of this system on the process of globalization?: The
globalization process is at a disadvantage as the country has a lower standard of living.
6. What is a characteristic of a market economy?: Firms seek to maximize profits.
7. Which impact does Islamic law directly have on businesses?: It forbids charging interest.
8. Which institution helps to maintain availability of global financing to solve trade deficit issues?:
International Monetary Fund
9. What is the current focus of the World Bank?: Improving quality of life.
10.For which concern has the World Trade Organization been criticized?: In- fluence of free trade
policies on labor rights
11.How is the Special Drawing Right of the International Monetary Fund (IMF) valued?: It is based
on the value of the five most significant members' currencies.
12.Two countries agree to open their borders to international business trans- action with one
another without tariffs. How does this affect global business?-
: It leads to developing free trade policies with strategic partners.
13.A country uses its established technology infrastructure to produce a good. What is the impact
of this infrastructure on trade?: It will create barriers to entry for other nations.
14.What was the economic impact of the North American Free Trade Agree- ment (NAFTA)?: The
shift of jobs away from low comparative advantage industries
15.A company that is located in Country A would like to sell products in Coun- try B. The government
of Country B is pushing for a tariff-based international trade agreement on the product. What is the
reasoning behind Country B's decision?: Country B seeks to protect its economy and give it the
opportunity for long-term expansion
16.Countries A and B participate in trade agreements that allow free trade among participant
countries. However, Country A imposed quotas on several imported products to protect its domestic
products. What is the effect, if any, on the domestic prices of these products?: Increases
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6
, Pre-Assessment: Managing in a Global Business Environment
17.Two countries decide to open up trade with each other. What is likely
to happen when trade opens up?: Jobs will increase in comparative advantage industries.
18.What is a purpose of a country implementing trade protectionism?: To protect an infant
industry
19.Country A and Country B are trying to mend their relationship. A company from Country A would
like to invest in a company in Country B. Which action by Country B will help these two countries
meet their goal?: Provide tax exemptions
20.Which level of regional economic integration is a key feature of a Customs Union?: Unified
trading policies with non-members
21.What is a drawback of creating regional trade agreements?: They shift employment
opportunities.
22.The United States-Mexico- Canada Agreement (USMCA), a modification of the North American
Free Trade Agreement (NAFTA), broadened the scope of free-trade between member nations and
tightened restrictions in the region. Which regulation was established by this new agreement?:
Almost half of all automobile parts must be made by a labor force that earns a minimum of $16
per hour by 2023.
23.A U.S. capital investment firm is researching new markets to enter to diversify its portfolio. The
director of foreign investments presented a pitch to the board of directors encouraging entry into the
Costa Rican telecommuni- cations market by investing in local companies in the region through
acquisi- tion. Which alliance supports this director's suggestion?: Central America Free Trade
Agreement
24.A firm based in Country A manufactures its products in Country B and pays the manufacturing
employees in the currency in which they are located. Which currency situation will result in the
maximum profit for the firm?: The currency in Country A is strong relative to the currency in
Country B.
25.Which drawback is associated with regional economic integration?: In- creased exclusive
internal trade
26.Which factor contributes to the creation of a monopoly?: Control of natural resources
27.Which convention provides gap fillers for terms that may not be expressly stated in agreements
between two companies?: Contracts for the International Sale of Goods
28.Which laws are violated by practices such as price-fixing, price discrimi- nation, restraints, and
monopolization?: Anti-trust
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