BUSMHR 2000 EXAM 1 400+ EXAM QUESTIONS &
CORRECT ANSWERS LATEST 2025
Globalization - ANSWER-The shift toward a more integrated and interdependent
world economy.
Globalization of markets - ANSWER-The merging of historically distinct and
separate national markets into one huge global marketplace.
Globalization of production - ANSWER-The sourcing of goods and services from
locations around the globe to take advantage of national differences in the cost
and quality of factors of production.
Factors of production - ANSWER-Labor, energy, land, and capital.
General Agreement on Tariffs and Trade (GATT) - ANSWER-Institution created by
voluntary agreement between individual nation-states and their functions are
enshrined in international treaties.
World Trade Organization (WTO) - ANSWER--GATT successor
-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.
,International Monetary Fund (IMF) - ANSWER--Created in 1944 by 44 nations that
met at Bretton Woods, New Hampshire.
-Established to maintain order in the international monetary system.
World Bank - ANSWER--Created in 1944 by 44 nations that met at Bretton Woods,
New Hampshire.
-Set up to promote economic development.
-Less controversial than IMF
United Nations - ANSWER--Established October 24, 1945
-Committed to preserving peace through international cooperation and collective
security.
UN Charter - ANSWER-An international treaty that establishes basic principles of
international relations.
UN Four Purposes - ANSWER-1. To maintain international peace and security.
2. To develop friendly relations among nations.
3. To cooperate in solving international problems and in promoting respect for
human rights.
4. To be a center for harmonizing the actions of nations.
Group of Twenty (G20) - ANSWER--Established in 1999.
-Comprises the finance ministers and central bank governors of the 19 largest
economies in the world, plus representatives from the European Union and the
European Central Bank.
,-Originally established to formulate a coordinated policy response to financial
crises in developing nations.
-2008/2009 it became the forum where major nations attempted to launch a
coordinated policy response to the global financial crisis.
Two main factors that underlie the trend toward greater globalization - ANSWER-
1. Decline in barriers to the free flow of goods, services, and capital that has
occurred since WWII
2. Technological change, particularly the dramatic developments in recent
decades in communication, information processing, and transportation
technologies.
International trade - ANSWER-Occurs when a firm exports goods or services to
consumers in another country.
Foreign direct investment (FDI) - ANSWER-Occurs when a firm invests resources in
business activities outside its home country.
Barriers to international trade - ANSWER-High tariffs on imports of manufactured
goods.
Consequence of high tariffs - ANSWER-"Beggar thy neighbor" retaliatory trade
policies.
Countries would progressively raise their trade barriers against one another.
The Uruguay Round - ANSWER--December 1993
-Extended GATT to cover services as well as manufactured goods.
, -Provided enhanced protection for patents, trademarks, and copyrights.
-Established the World Trade Organization to police the international trading
system.
GATT effect on average tariff rates - ANSWER-Average tariffs rates haven fallen
significantly since 1950, now standing above 4%.
The Doha agenda - ANSWER--Cutting tariffs on industrial goods, services, and
agricultural products.
-Phasing out subsidies to agricultural producers.
-Reducing barriers to cross-border investments.
-Limiting the use of antidumping laws.
Lowering barriers to international trade - ANSWER--Enables firms to view the
world as their market.
-Allows firms to base production at the optimal location for that activity.
World trade growth - ANSWER--Volume of world trade in merchandised goods
has grown TWICE the rate of the world economy since 1950.
-By 2012, world trade was 32 times LARGER than in 1950; but world economy was
8.9 times larger. (bad)
-Volume of world trade was THREE times larger in 2012 than in 1990; world
economy was 1.62 times larger.
Why world trade is growing faster than world GDP - ANSWER--Firms are
dispersing parts of their production process to different locations around the
globe (decreases production costs, increases product quality).
CORRECT ANSWERS LATEST 2025
Globalization - ANSWER-The shift toward a more integrated and interdependent
world economy.
Globalization of markets - ANSWER-The merging of historically distinct and
separate national markets into one huge global marketplace.
Globalization of production - ANSWER-The sourcing of goods and services from
locations around the globe to take advantage of national differences in the cost
and quality of factors of production.
Factors of production - ANSWER-Labor, energy, land, and capital.
General Agreement on Tariffs and Trade (GATT) - ANSWER-Institution created by
voluntary agreement between individual nation-states and their functions are
enshrined in international treaties.
World Trade Organization (WTO) - ANSWER--GATT successor
-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.
,International Monetary Fund (IMF) - ANSWER--Created in 1944 by 44 nations that
met at Bretton Woods, New Hampshire.
-Established to maintain order in the international monetary system.
World Bank - ANSWER--Created in 1944 by 44 nations that met at Bretton Woods,
New Hampshire.
-Set up to promote economic development.
-Less controversial than IMF
United Nations - ANSWER--Established October 24, 1945
-Committed to preserving peace through international cooperation and collective
security.
UN Charter - ANSWER-An international treaty that establishes basic principles of
international relations.
UN Four Purposes - ANSWER-1. To maintain international peace and security.
2. To develop friendly relations among nations.
3. To cooperate in solving international problems and in promoting respect for
human rights.
4. To be a center for harmonizing the actions of nations.
Group of Twenty (G20) - ANSWER--Established in 1999.
-Comprises the finance ministers and central bank governors of the 19 largest
economies in the world, plus representatives from the European Union and the
European Central Bank.
,-Originally established to formulate a coordinated policy response to financial
crises in developing nations.
-2008/2009 it became the forum where major nations attempted to launch a
coordinated policy response to the global financial crisis.
Two main factors that underlie the trend toward greater globalization - ANSWER-
1. Decline in barriers to the free flow of goods, services, and capital that has
occurred since WWII
2. Technological change, particularly the dramatic developments in recent
decades in communication, information processing, and transportation
technologies.
International trade - ANSWER-Occurs when a firm exports goods or services to
consumers in another country.
Foreign direct investment (FDI) - ANSWER-Occurs when a firm invests resources in
business activities outside its home country.
Barriers to international trade - ANSWER-High tariffs on imports of manufactured
goods.
Consequence of high tariffs - ANSWER-"Beggar thy neighbor" retaliatory trade
policies.
Countries would progressively raise their trade barriers against one another.
The Uruguay Round - ANSWER--December 1993
-Extended GATT to cover services as well as manufactured goods.
, -Provided enhanced protection for patents, trademarks, and copyrights.
-Established the World Trade Organization to police the international trading
system.
GATT effect on average tariff rates - ANSWER-Average tariffs rates haven fallen
significantly since 1950, now standing above 4%.
The Doha agenda - ANSWER--Cutting tariffs on industrial goods, services, and
agricultural products.
-Phasing out subsidies to agricultural producers.
-Reducing barriers to cross-border investments.
-Limiting the use of antidumping laws.
Lowering barriers to international trade - ANSWER--Enables firms to view the
world as their market.
-Allows firms to base production at the optimal location for that activity.
World trade growth - ANSWER--Volume of world trade in merchandised goods
has grown TWICE the rate of the world economy since 1950.
-By 2012, world trade was 32 times LARGER than in 1950; but world economy was
8.9 times larger. (bad)
-Volume of world trade was THREE times larger in 2012 than in 1990; world
economy was 1.62 times larger.
Why world trade is growing faster than world GDP - ANSWER--Firms are
dispersing parts of their production process to different locations around the
globe (decreases production costs, increases product quality).
