GSCM 211 EXAM 1 QUESTIONS AND ANSWERS
Globalization - CORRECT ANSWER✅✅•Exchange of information, ideas, goods, etc. faster across the
globe
•Increases interactions
•Example: IPhone parts
"Globalization for business typically refers to an extension of the make or buy decision beyond
_____________." - CORRECT ANSWER✅✅national borders
globalization PRO - 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
globalization CON - CORRECT ANSWER✅✅•Unequal opportunities across the world
•The world's wealth is increasingly concentrated (rich getting richer)
•Globalization strategy is poorly managed (damage of the environment)
comparative advantage - CORRECT ANSWER✅✅•A party can produce a good or service more efficiently
than its competitors.
•Producing goods and services at a lower opportunity cost
•Example: Cotton sheets from Egypt
Adam Smith in "The Wealth of Nations" called the concept of comparative advantage ______________ -
CORRECT ANSWER✅✅"Absolute Advantage"
Mercantilism - CORRECT ANSWER✅✅- countries controlling trade so they export more than they
import
, Thomas Friedman has said "the world has moved from periods of being round (where trade barriers are
high) to periods of being flat (where barriers to trade are lowered). - CORRECT ANSWER✅✅
Bretton Woods System - CORRECT ANSWER✅✅- foundation of the majority of world trade
-financial and commodity interdependence
-US dollar as the main trading currency
-Tariffs reduced or eliminated
Major Trading Blocs - CORRECT ANSWER✅✅NAFTA - U.S., Canada, Mexico
European Union - 28 trading partners in Europe
APEC - group of 21 Pacific Rim countries
ASEAN - trading bloc of 10 countries in Asia
Mercosur - trading bloc in Latin America
CAFTA - Central America
European Union - CORRECT ANSWER✅✅The European Union is probably the most famous of these
trading blocs, where non-tariff barriers to trade have been collectively removed by member nations. The
EU now has 27 members and was originally inspired by a small open borders trading union between
Belgium, The Netherlands, and Luxembourg.
African Continental - CORRECT ANSWER✅✅Free Trade AgreementThe agreement initially requires
members to remove from 90% of goods, allowing free access to commodities, goods, and services across
the continent, The United Economic Commission for Africa (UNECA) estimates the agreement will boost
intra-African trade by 52% by 2022.
Mercosur - CORRECT ANSWER✅✅Mercosur or Mercosul is a sub-regional bloc comprising Argentina,
Brazil, Paraguay, Uruguay, and Venezuela. Its associate countries are Chile, Bolivia, Colombia, Ecuador,
and Peru, Observer countries are New Zealand and Mexico. Its purpose is to promote free trade and the
fluid movement of goods, people, and currency.
NAFTA has been replaced by USMCA (United States - Mexico - Canada Agreement) - CORRECT
ANSWER✅✅Trade pact signed in 1992 that gradually eliminated most tariffs and other trade barriers
on products and services passing between the United States, Canada, and Mexico. The pact effectively
Globalization - CORRECT ANSWER✅✅•Exchange of information, ideas, goods, etc. faster across the
globe
•Increases interactions
•Example: IPhone parts
"Globalization for business typically refers to an extension of the make or buy decision beyond
_____________." - CORRECT ANSWER✅✅national borders
globalization PRO - 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
globalization CON - CORRECT ANSWER✅✅•Unequal opportunities across the world
•The world's wealth is increasingly concentrated (rich getting richer)
•Globalization strategy is poorly managed (damage of the environment)
comparative advantage - CORRECT ANSWER✅✅•A party can produce a good or service more efficiently
than its competitors.
•Producing goods and services at a lower opportunity cost
•Example: Cotton sheets from Egypt
Adam Smith in "The Wealth of Nations" called the concept of comparative advantage ______________ -
CORRECT ANSWER✅✅"Absolute Advantage"
Mercantilism - CORRECT ANSWER✅✅- countries controlling trade so they export more than they
import
, Thomas Friedman has said "the world has moved from periods of being round (where trade barriers are
high) to periods of being flat (where barriers to trade are lowered). - CORRECT ANSWER✅✅
Bretton Woods System - CORRECT ANSWER✅✅- foundation of the majority of world trade
-financial and commodity interdependence
-US dollar as the main trading currency
-Tariffs reduced or eliminated
Major Trading Blocs - CORRECT ANSWER✅✅NAFTA - U.S., Canada, Mexico
European Union - 28 trading partners in Europe
APEC - group of 21 Pacific Rim countries
ASEAN - trading bloc of 10 countries in Asia
Mercosur - trading bloc in Latin America
CAFTA - Central America
European Union - CORRECT ANSWER✅✅The European Union is probably the most famous of these
trading blocs, where non-tariff barriers to trade have been collectively removed by member nations. The
EU now has 27 members and was originally inspired by a small open borders trading union between
Belgium, The Netherlands, and Luxembourg.
African Continental - CORRECT ANSWER✅✅Free Trade AgreementThe agreement initially requires
members to remove from 90% of goods, allowing free access to commodities, goods, and services across
the continent, The United Economic Commission for Africa (UNECA) estimates the agreement will boost
intra-African trade by 52% by 2022.
Mercosur - CORRECT ANSWER✅✅Mercosur or Mercosul is a sub-regional bloc comprising Argentina,
Brazil, Paraguay, Uruguay, and Venezuela. Its associate countries are Chile, Bolivia, Colombia, Ecuador,
and Peru, Observer countries are New Zealand and Mexico. Its purpose is to promote free trade and the
fluid movement of goods, people, and currency.
NAFTA has been replaced by USMCA (United States - Mexico - Canada Agreement) - CORRECT
ANSWER✅✅Trade pact signed in 1992 that gradually eliminated most tariffs and other trade barriers
on products and services passing between the United States, Canada, and Mexico. The pact effectively
