1. The volume of world trade in merchandise is growing faster than world GDP.

This implies
A) more firms are dispersing their production processes to global locations.
B) the economies of the world's nation-states are becoming more independent from each other.
C) the world is becoming poorer.
D) the global economy is headed for a large downward correction.

2) Which of the following is viewed by large segments of the population in many countries as a
detrimental effect of antiglobalization?
A) job growth in industries under attack from foreign competitors
B) environmental degradation
C) cultural isolationism of global media and MNEs
D) upward pressure on the wage rates of unskilled workers

3) Which of the following is a reason that command economies tend to stagnate?

A) Individuals in command economy countries lack the skills to be innovative.
B) All economic resources are mobilized for the public good.
C) Costs are tightly controlled and business are forced to be efficient rather than dynamic and innovative.
D) The abolition of private ownership means there is no incentive for individuals to look for better
ways to serve consumer needs.

4)__________are the routine conventions of everyday life.

A) Rites
B) Beliefs
C) Mores
D) Folkways

5) In countries where the value of______identification is considered to be primary, managers

and workers are discouraged from moving from company to company.
A) group
B) cultural
C) individual
D) primary

6. Which of the following statements is true of the Leontief paradox?

A) It disproved Ricardo's theory of comparative advantage.
B) It shows an anomaly that ocuf comparatition has high domestic demand for a product.
C) It raised questions about the validity of the Heckscher-Ohlin theory.
D) It explains the relationship between domestic demand and comparative advantage.

7) Which of the following theories stress the role of luck, entrepreneurship, and innovation in the
production and export of a good or service by the firms in a country?
A) new trade theory
B) product life-cycle theory
C) theory of comparative advantage
D) Ricardo's theory

8)_____in agriculture could jump-start economic growth among the world's poorer nations and alleviate
global poverty.
A) Quota rents
B) Subsidies
C) Strategic trade policy
D) Free trade

9) What has made the United States an attractive target for foreign direct investment?
A) its unstable economy
B) its wealthy domestic markets
C) its closed society
D) its unfavorable political environment

10) What is a common difficulty that traders face when exporting goods or services to other countries?
A) Governments do not provide much assistance to exporters.
B) Small firms tend to be more aggressive than larger firms in global trade.
C) Growth opportunities are often limited in global markets.
D) Exporters often face voluminous paperwork and complex formalities.

11) To be classified as an MNE, a company must have productive activities in at least countries.
A) four
B) twenty
C) two
D) three
12) Which of the following provides exclusive legal rights to authors, composers, playwrights, artists, and
publishers to publish and disperse their work as they see fit?
A patent
B) trademark
C) copyright
D) license

13) Hindus believe

A) in reincarnation, or rebirth into a different body, after death.
B) that a material quest is more important than a spiritual quest.
C) in the importance of individual religious freedom.
D) that there is but the one true omnipotent God.

14) Economies of scale have a number of sources, including the ability

A) of large-volume producers to utilize specialized employees and equipment.
B) to utilize nonspecialized employees interchangeably.
C) to adjust the scale of production based upon product saturation in the marketplace.
D) to average out the variable costs of production.

15) Until 1995, GATT rules applied only to

A) agricultural products.
B) textiles.
C) industrial goods.
D services.

16) Which of the following arises when a country is importing more goods and services than it is
exporting?
A) trade balance
B) current account surplus
C) trade surplus
D trade deficit

17) The_____is responsible for proposing EU legislation, implementing it, and monitoring
compliance with EU laws by member states.
A) European Parliament
B) Court of Justice
C) Council of the European Union
D) European Commission
18) Firms pursuing global standardization or transnational strategies tend to prefer ______arrangements.
A) joint-venture
B) licensing
C) wholly owned subsidiary
D) franchising

19) The ______is issued to the exporter by the common carrier transporting the merchandise.
A) sight draft
B) letter of credit
C) bill of lading
D) time draft

20) Systems that emphasize collectivism tend toward

A) privatization.
B) capitalism.
C) democracy.
D) totalitarianism.