Terms
What does NAFTA stand for?
North American Free Trade Agreement
If a nation has an open economy it means that the nation:
a. Allows private ownership of capital.
b. Has flexible exchange rates
c. Has fixed exchange rates
d. Conducts trade with other countries
d. Conducts trade with other countries
Fair globalisation would mean:
(a) fair opportunities for all
(b) fair benefits for all
(c) more support to small producers
(d) all of the above
(d) all of the above
Define international trade
When a firm exports goods or services to consumers in another country
What are the three factors of production within globalization?
Labor
Land
Capital
What does WTO stand for?
World Trade Organization
A primary reason why nations conduct international trade is because:
a. Some nations prefer to produce one thing while others produce another
b. Resources are not equally distributed to all trading nations
c. Trade enhances opportunities to accumulate profits
d. Interest rates are not identical in all trading nations
b. Resources are not equally distributed to all trading nations
Name 3 goals of the United Nations (UN).
1. Maintain international peace and security
2. Develop relations between various countries
3. Cooperate in solving international problems
4. Promote human rights
5. Establish a center for the harmonizing of actions of nations
Define Foreign Direct Investment (FDI)
When a firm invests resources in business activities outside its home country
Government can make globalization more ‘fair’ by
(a) increasing competition
(b) increasing employment
(c) implementing the labour laws
(d) imposing trade barriers
(c) implementing the labour laws
What does GATT stand for?
General Agreement on Tariffs and Trade
International trade forces domestic firms to become more competitive in terms of:
a. The introduction of new products b. Product design and quality c. Product price d. All of the above
d. All of the above
What is the main goal/purpose of the World Bank?
Promote economic development by using low-interest loans
Define Multinational Enterprise
Any business that has productive activities in two or more countries
Name three pros of globalization:
1. More integrated global economy
2. New opportunities for firms
3. Access to less expensive goods
4. Support of free trade
5. Infusion of capital into poorer countries
6. Reduction of prices because of competition
What does IMF stand for?
International Monetary Fund
International trade is based on the idea that:
a. Exports should exceed imports b. Imports should exceed exports c. Resources are more mobile internationally than are goods d. Resources are less mobile internationally than are goods
d. Resources are less mobile internationally than are goods
Name two goals of the World Trade Organization
2. Enforce trade laws
3. Cut tariffs on industrial goods and services
4. Reduce barriers to cross-border investment
Define capitalism
An economic system in which the means of production are privately or publicly owned. Goods, services and capital are exchanged in a free market.
List three cons of globalization
1. Loss of jobs to low-wage nations
2. Increase in labor and health violations
3. Shift of economic power from governments to large organizations
4. Increase in the gap between the rich and poor
5. Increase in environmental concerns
Increased foreign competition tends to a. Intensify inflationary pressure at home b. Induce falling output per worker-hour for domestic workers c. Place constraints on the wages of domestic workers d. Increase profits of domestic import-competing industries
c. Place constraints on the wages of domestic workers
What is the goal of the International Monetary Fund?
The maintain order in the international monetary system
Define free market economy:
An economy where the government imposes few or no restrictions and regulations on buyers and sellers