(Test Bank) Introduction To Global Business Introduction To Global Business: Understanding The International Environment And Global Business Functions

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Test Bank for Introduction to Global Business Introduction to Global Business: Understanding the International Environment and Global Business Functions 1st Edition, Gaspar. Chapter 1 -15 Chapter 1: The Rise of Globalization TRUE/FALSE 1. With business becoming increasingly global, its success, fortunately, depends only on the domestic environment. ANS: F PTS: 1 DIF: Difficulty: Moderate REF: p. 4 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 2. Even though business is global, the credit crisis of 2008, started by an American investment bank, was limited to the American economy with fortunately no impact on the global economy. ANS: F PTS: 1 DIF: Difficulty: Challenging REF: p. 3 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 3. Key aspects of globalization include the elimination of barriers to trade and information technology. ANS: T PTS: 1 DIF: Difficulty: Moderate REF: p. 5 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 4. So far globalization has made it possible for goods, services, and capital, to cross national border s but not technology and culture. ANS: F PTS: 1 DIF: Difficulty: Moderate REF: p. 5 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 5. The “soft” qualities essential to globalization include openness, p rotectionism, accountability, connectivity, democracy, and centralization. ANS: F PTS: 1 DIF: Difficulty: Challenging REF: p. 6 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 6. A sustainable decoupling process would eventually lead to a multi -polar world —a world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone. ANS: T PTS: 1 DIF: Difficulty: Challenging REF: p. 9 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 7. The openness and proliferation of globalization and free trade rules can best be attributed to the interwar period between World War I and II. ANS: F PTS: 1 DIF: Difficulty: Challenging REF: p. 10 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 8. As part of the World Bank’s Strategic Framework, there are five focus areas that accommodate and facilitate the globalization process including its analytical and advisory role supporting national policies to strengthen free market institutions and infrastructure that has provided the potential for creating large gains from trade. ANS: T PTS: 1 DIF: Difficulty: Challenging REF: p. 12 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation 9. For World Trade Organization, increasing trade barriers has been one of the most simplis tic ways to encourage trade and globalization. ANS: F PTS: 1 DIF: Difficulty: Moderate REF: p. 13 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 10. The foundations of the globalized business world are political —and so are the biggest threats to the system. ANS: T PTS: 1 DIF: Difficulty: Challenging REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Anal ysis 11. Countries that have successfully adapted to globalization realize that they cannot succeed without high -quality government management at home. ANS: T PTS: 1 DIF: Difficulty: Moderate REF: p. 18 OBJ: LO: 01 -04 NAT: BUSPROG: Analytic STA: DISC : Environmental Influence KEY: Bloom's: Comprehension 12. In communist and state -controlled economies like those in Central Asia property rights either do not exist or are not well defined which discourages domestic and foreign investors from making long-term commitments in these countries. ANS: T PTS: 1 DIF: Difficulty: Moderate REF: p. 18 OBJ: LO: 01 -04 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation 13. More globalized economies like New Zealand and Singapore rank at the top in index for absence of corruption by Transparency International. ANS: T PTS: 1 DIF: Difficulty: Challenging REF: p. 19 OBJ: LO: 01 -04 NAT: BUSPROG: Analytic STA: DISC: Environmenta l Influence KEY: Bloom's: Evaluation 14. Because broadband prices have been falling, governments in emerging economies such as India and South Africa are facilitating the spread of broadband to rural towns and villages to provide instant access to marke t information and government programs to remote villagers which will enable policymakers to maximize the economic potential of remote communities and make globalization sustainable. ANS: T PTS: 1 DIF: Difficulty: Moderate REF: p. 20 OBJ: LO: 01 -05 NAT: BUSPROG: Analytic STA: DISC: Information Technology KEY: Bloom's: Evaluation 15. Critics argue that open trade and foreign direct investment always take jobs from workers in developing economies and transfer them to workers in advanced industrial countr ies which leave the workers in the developing country, out of work. ANS: F PTS: 1 DIF: Difficulty: Moderate REF: p. 23 OBJ: LO: 01 -06 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation 16. A survey by the World Bank in dicates that of the companies surveyed; unfortunately, only 30 percent have board -approved policies on environmental management indicating that corporate social responsibility practices have become an insignificant factor in determining where multinational corporations conduct business. ANS: F PTS: 1 DIF: Difficulty: Challenging REF: p. 24 OBJ: LO: 01 -06 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation MULTIPLE CHOICE 1. Of the following, which is NOT true regarding the credit crisis? a. It affected farmers in Burkina Faso. b. It affected miners and steel workers in Ukraine. c. It affected assemble -line workers in Singapore. d. It affected white -collar workers at information technology firms in Ireland. e. It had an impact only on its country of origin - the United States. ANS: E PTS: 1 DIF: Difficulty: Easy REF: p. 3 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation 2. Brazilian Juice, a manufacturer of healthy fruit juices in Brazil, sells juice in six different countries including United States. Brazilian juice is engaging in a. economic development in United States. b. exercising nontariff barriers in Brazil. c. unfair trade practices. d. globalization. e. the World Trade Bank Group. ANS: D PTS: 1 DIF: Difficulty: Moderate REF: p. 5 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Application 3. Which of the following is NOT a key aspect of globalization? a. The elimination of barriers to trade b. Investment c. Financial independence d. Culture e. Information technology ANS: C PTS: 1 DIF: Difficulty: Moderate REF: p. 5 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 4. Countries that have been moving toward more open trade and free market policies are known as _____. a. Africa n countries b. open -door economies c. industralized countries d. globalized economies e. emerging market economies ANS: E PTS: 1 DIF: Difficulty: Moderate REF: p. 6 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Knowledge KEY: Bloom's: Knowledge 5. India and Brazil have been moving towards more open trade and free market policies. These countries can be described as a. emerging market economies. b. open -door economies. c. industrialized countries. d. common market economies. e. the World Bank countries. ANS: A PTS: 1 DIF: Difficulty: Moderate REF: p. 11 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 6. A sustainable decoupling process would even tually lead to _____. a. a multi -polar world b. globalization c. outsourcing d. importing e. exporting ANS: A PTS: 1 DIF: Difficulty: Moderate REF: p. 9 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 7. A world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone can be described as a(an) __________. a. interde pendent world b. industrialized world c. globalized economy d. multi -polar world e. diverse world ANS: D PTS: 1 DIF: Difficulty: Easy REF: p. 10 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 8. According to the authors, which of the following is NOT true regarding globalization lessons for developing countries? a. Import oriented nations must switch to concentrate on domestication. b. Export oriented nations must diversify their market to in clude major emerging markets. c. Countries emphasizing exports should base their strategy on their true competitive advantage. d. For countries with large populations, the size of the domestic market remains most important. e. Overindulgence can lead to disaster. ANS: A PTS: 1 DIF: Difficulty: Challenging REF: p. 10 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 9. Which of the following is NOT a main purpose of the IMF? a. Provide a forum for cooperation on international monetary problems b. Facilitate the sustainable growth of international trade c. Promote exchange rate stability d. Lend countries foreign exchange when needed e. Provide long -term low -interest social s ector and infrastructure loans ANS: E PTS: 1 DIF: Difficulty: Challenging REF: p. 11 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 10. What was the initial primary role of the World Bank? a. To aide in the reconstruction of Europe after World War II b. To help eradictate communicable diseases c. To try to avoid a repetition of the disastrous economic policies that had contributed to the Great Depression. d. To deal primarily with tariff negotiations e. To provide loans and take equity position in private companies ANS: A PTS: 1 DIF: Difficulty: Challenging REF: p. 11 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 11. The International Bank for Reconstruction and Development performs which of the following functions? a. Provides long -term low -interest social sector and infrastructure loans to the poorest members utilizing foreign aid funds p rovided by rich nation members b. Provide loans and take equity position in private companies of developing countries and works toward developing capital markets in theose economies c. Supports reconstruction and restructuring of member countries utilizi ng funds raised in international capital markets d. Provides political risk coverage for private investments made in developing countries e. Works on issues related to foreign investment disputes ANS: C PTS: 1 DIF: Difficulty: Moderate REF: p. 12 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 12. The Multilateral Investment Guarantee Agency performs which of the following functions? a. Provides long -term low -interest social sector and infrastructure loans to the poorest members utilizing foreign aid funds provided by rich nation members b. Provide loans and take equity position in private companies of developing countries and works towa rd developing capital markets in those economies c. Supports reconstruction and restructuring of member countries utilizing funds raised in international capital markets d. Provides political risk coverage for private investments made in developing count ries e. Works on issues related to foreign investment disputes ANS: D PTS: 1 DIF: Difficulty: Moderate REF: p. 12 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 13. The International Center for the Settlement of Investment Disputes performs which of the following functions? a. Provides long -term low -interest social sector and infrastructure loans to the poorest members utilizing foreign aid funds provided by rich nati on members b. Provide loans and take equity position in private companies of developing countries and works toward developing capital markets in those economies c. Supports reconstruction and restructuring of member countries utilizing funds raised in international capital markets d. Provides political risk coverage for private investments made in developing countries e. Works on issues related to foreign investment disputes ANS: E PTS: 1 DIF: Difficulty: Easy REF: p. 12 OBJ: LO: 01 -02 NAT : BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 14. Trade expansion has been a leading factor in global integration, especially since the early _____. a. 1650s b. 1760s c. 1890s d. 1970s e. 2000s ANS: D PTS: 1 DIF: Difficulty: Moderate REF: p. 12 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 15. GATT refers to which of the following? a. General Agreement of Tariffs and Trade b. Great American Trade Tax c. Gift of American Treaty Tips d. General Articles on Tariffs and Trade e. Great Articles on Tariffs and Trade ANS: A PTS: 1 DIF: Difficulty: Easy REF: p. 12 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 16. Which of the following is NOT an objective of the WTO? a. Reviewing national trade policies b. Acting as a form for trade negotiations c. Helping eradictate communicable diseases d. Settling trade disputes e. Administering trade agreements ANS: C PTS: 1 DIF: Difficulty: Moderate REF: p. 13 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 17. Trade without discrimin ation, freer trade, predictability, promotion of fair competition, and _____ are the five principles of the multilateral trading system. a. integrated capital markets b. encouragement of economic reform in developing countries c. liberalization of the tr ading system d. nontariff trade e. international ANS: B PTS: 1 DIF: Difficulty: Moderate REF: p. 14 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 18. The concept of curtailing agricultural subsidies in developed economies was incorporated into the ninth round to trade negotiations called the _____. a. “Dallas Round” b. “Toronoto Round” c. “Sparta Round” d. “Kabul Round” e. “Doha Round” ANS: E PTS: 1 DIF: Difficulty: Moderate REF: p. 14 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 19. The rules, enforcement mechanisms, and organizations that support market transactions are referred to as _ ____. a. industries b. companies c. businesses d. corporations e. institutions ANS: E PTS: 1 DIF: Difficulty: Easy REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 20. In Brazil, if there are government organizations that create strong incentives for private investment and operate under a system of checks and balances that function best in a democratic system of government, they could be classified as which of these? a. Transparent organizations b. Antitrust corporations c. Adaptive institutions d. Emerging markets e. Capital markets ANS: C PTS: 1 DIF: Difficulty: Moderate REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Analysis 21. In ABC country, a system of responsibility in which an authority, such as the government, is not answerable for its actions, it would be described as having the lack of _____. a. banking system b. integrity c. accountability d. transaction -based exporting e. trustworthiness ANS: C PTS: 1 DIF: Difficulty: Challenging REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Evaluation STA: DISC: Legal Responsibilities KEY: Bloom's: Evaluation 22. The most recent device(s) that enables greatest ease in portability and accessibility of information is (are) the _____. a. magazines b. newspapers c. Internet d. smart phones e. computer ANS: D PTS: 1 DIF: Difficulty: Easy REF: p. 16 OBJ: LO: 01 -03 NAT: BUSPROG: Technology STA: DISC: Information Technology KEY: Bloom's: Knowledge 23. In India, several politicians are working very hard toward a system of full disclosure and openness that aims to avoid any semblance of corruption and cronyism. These efforts can be described as creating a system focused on _____. a. politics b. integrity c. accountability d. transparency e. democracy ANS: D PTS: 1 DIF: Difficulty: Challenging REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Analytic STA: DISC: Legal Responsibilities KEY: Bloom's: Evaluation 24. Which of the following is NOT true regarding property rights? a. Protection of property rights has always been fundamental to market economies. b. Studies have shown that countries that have successfully adapted to globalization guarantee property rights. c. Less globalized countries offer less property rigiht protection. d. In economies in Central Asia and parts of Africa and the Middle East, prop erty rights are well defined. e. Countries without property rights will most likely fall behind nations that guarantee property rights. ANS: D PTS: 1 DIF: Difficulty: Moderate REF: p. 18 OBJ: LO: 01 -04 NAT: BUSPROG: Analytic STA: DISC: Legal Responsibilities KEY: Bloom's: Comprehension 25. Illicit dealings undermine economic performance by doing all of the following EXCEPT: a. decreasing costs. b. raising competition. c. thwarting competition. d. reducing transparency. e. raising insecurity. ANS: A PTS: 1 DIF: Difficulty: Easy REF: p. 19 OBJ: LO: 01 -04 NAT: BUSPROG: Ethics STA: DISC: Ethical Responsibilities KEY: Bloom's: Comprehension 26. ABC Technology touts in their advertisements that their technology can transfer huge amount of data and other information in a second via the Internet. This describes ABC’s _____ in technology. a. brandwith b. digital server c. digital divide d. gigabytes e. Y2K ANS: A PTS: 1 DIF: Difficulty: Moderate REF: p. 19 OBJ: LO: 01 -05 NAT: BUSPROG: Technology STA: DISC: Information Technology KEY: Bloom's: Application 27. Which of the following is NOT true regarding the global use of information t echnology? a. Our globe relies on the Internet for business and social activity. b. Broadband prices have been falling. c. The IT revolution has been relatively slow. d. Internet -related technologies help reduce corporate and societal hierarchies. e. Internet and wireless technologies could make many authoritarian governments uneasy. ANS: C PTS: 1 DIF: Difficulty: Moderate REF: p. 19 OBJ: LO: 01 -05 NAT: BUSPROG: Technology STA: DISC: Information Technology KEY: Bloom's: Evaluation 28. The _____ describes the perceived economic gap between countries or people with easy access to digital and information technology and those with very limited or no access. a. bandwith b. digital era c. digital divide d. gigabyte number e. Y2K gap ANS: C PTS: 1 DIF: Difficulty: Easy REF: p. 21 OBJ: LO: 01 -05 NAT: BUSPROG: Technology STA: DISC: Information Technology KEY: Bloom's: Knowledge 29. Of the following, which is NOT true regarding the Internet and cell phone era? a. Fortunately, the next billion users will be the same as the first billion b. The majority of users will be from developing countries c. Text messaging will likely predominate emerging economies; mobile phone usage d. Countries are skipping the use of land -line technology and jumping to wireless systems e. Developing countries may “leapfrog” an entire generation of technology ANS: A PTS: 1 DIF: Difficulty: Moderate REF: p. 22 OBJ: LO: 01 -05 NAT: BUSPROG: Technology STA: DISC: Information Technology KEY: Bloom's: Evaluation 30. All of the following are arguments against globalization EXCEPT: a. it may lead to an increase in the apperance of old industries. b. it may lead to a loss of control over economic policies and developments. c. it may lead to an erosion of communities. d. it can be a force of exploitation and injustice. e. it can cause job losses and stagnant wages. ANS: A PTS: 1 DIF: Difficulty: Moderate REF: p. 23 OBJ: LO: 01 -06 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 31. The only way workers in industrialized countries can compete with their counterparts in the developing world will b e through: a. increased use of the cost leadership strategy. b. increased diversity within the organization. c. increased empowerment of employees. d. increased productivity by using technologically -intensive manufacturing technologies. e. increased flat organization structure. ANS: D PTS: 1 DIF: Difficulty: Moderate REF: p. 23 OBJ: LO: 01 -06 NAT: BUSPROG: Technology STA: DISC: Information Technology KEY: Bloom's: Analysis 32. McDonalds’ consumer products are made primarily of renewable materials; some of the material comes from recycled fiber. The restaurants also utilize LED light fixtures. McDonald’s is engaging in _____. a. future sourcing b. global warming c. next-generation consum er hook d. digital divide e. sustainable development ANS: E PTS: 1 DIF: Difficulty: Moderate REF: p. 24 OBJ: LO: 01 -06 NAT: BUSPROG: Ethics STA: DISC: Ethical Responsibilities KEY: Bloom's: Application 33. Which of the following is NOT true regarding results from a survey by the World Bank on corporate social responsibility (CSR)? a. CSR practices are now a significant factor in determining where multinational companies conduct business. b. 90% of the companies surveyed have board -approved policies on environmental management. c. 90% of multinationals will make their decisions based on CSR issues with regard to foreign direct investment. d. CSR issues consistently implemented for the long t erm lead to sustainable business and development. e. CSR includes issues such as labor rights, corruption, human rights, community health, and land rights. ANS: C PTS: 1 DIF: Difficulty: Challenging REF: p. 24 OBJ: LO: 01 -06 NAT: BUSPROG: Ethics STA: DISC: Ethical Responsibilities KEY: Bloom's: Evaluation 34. Successive waves of globalization include characteristics such as the expansion of trade, the diffusion of technology, extensive migration, and _____. a. improvements in country infrastructure b. increased employee morale c. improved healthcare d. financial independence e. cross -fertilization of diverse cultures ANS: E PTS: 1 DIF: Difficulty: Moderate REF: p. 25 OBJ: LO: 01 -07 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Comprehension 35. Which of the following is NOT true regarding globalization? a. It guarantees that quality of life for all people will increase. b. It creates winners and losers. c. It has the potential to increase the quality of life fo r people. d. Some multinational companies will utilize globalization may try to pay substandard wages to the workers they employ in developing countries. e. Export barriers may need to be imposed by the WTO to help regulate the actions o f multinational companies. ANS: A PTS: 1 DIF: Difficulty: Moderate REF: p. 25 OBJ: LO: 01 -07 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation 36. All of the following countries can be considered globalization “ winners” EXCEPT: a. China b. Central Asia c. India d. Brazil e. South Africa ANS: B PTS: 1 DIF: Difficulty: Moderate REF: p. 25 OBJ: LO: 01 -07 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation 37. Which of the following is NOT true regarding globalization’s “winners” and “losers?” a. Brazil has been flourishing due to gloablization. b. According to the World Bank, more than 400 million Chinese citizens have climbed out of poverty since the implemen tation of economic reform that started in their country. c. Those that suffer most from the effects of globalization are those countries that have not been able to seize the opportunities to participate in this process. d. Unfortunately, globalization only creates winners in industralized countries such as the United States. e. Efforts to hold back globalizaiton or technological progress are bound to fail. ANS: D PTS: 1 DIF: Difficulty: Moderate REF: p. 25 OBJ: LO: 01 -07 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Evaluation COMPLETION 1. The socio -economic reform process of eliminating trade, investment, cultural, in formation technology, and political barriers across countries, which in turn could lead to increased economic growth and geo -political integration and interdependence among nations of the world refers to ________. ANS: globalization PTS: 1 DIF: Difficult y: Moderate REF: p. 5 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 2. Countries that are implementing more open trade and free market policies are called ______. ANS: emerging market economies PTS: 1 DIF: Difficulty: Easy REF: p. 6 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 3. _______ refers to a fundamental global shift in which industrialized country -dependent develop ing economies begin to grow based on their own underlying economic strengths rather than the ups and downs of the world’s richest countries. ANS: Decoupling PTS: 1 DIF: Difficulty: Moderate REF: p. 8 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: En vironmental Influence KEY: Bloom's: Knowledge 4. A world economy in which the engines of growth could comprise several major industrialized and emerging market economies such as the United States, the European Union, China, India, Brazil, Russia, and So uth Africa rather than the United States alone is called ______. ANS: multi -polar world PTS: 1 DIF: Difficulty: Moderate REF: p. 9 OBJ: LO: 01 -01 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 5. The international financial environment in which exchange rates and international payments for goods and services are conducted refers to _________. ANS: international monetary system PTS: 1 DIF: Difficulty: Moderate REF: p. 11 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 6. ________ are economic policy changes that promote private sector development, competitive markets, market -pricing, freer trade, and deregulation. ANS: Economic reforms PTS: 1 DIF: Difficulty: Easy REF: p. 11 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 7. A stock exchange where long -term financial instruments such as stocks and bonds can be bought and sold refers to _______. ANS: capital markets PTS: 1 DIF: Difficulty: Easy REF: p. 12 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 8. _______ refers to lowering and/or removing trade barriers such as tariffs, quota s, and subsidies. ANS: Liberalization of the trading system PTS: 1 DIF: Difficulty: Easy REF: p. 13 OBJ: LO: 01 -02 NAT: BUSPROG: Analytic STA: DISC: Environmental Knowledge KEY: Bloom's: Knowledge 9. The rules, enforcement mechanisms, and organizat ions that support market transactions are called ______. ANS: institutions PTS: 1 DIF: Difficulty: Easy REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 10. ______ are government organizati ons that create strong incentives for private investment and operate under a system of checks and balances. ANS: Adaptive institutions PTS: 1 DIF: Difficulty: Moderate REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Analytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 11. A system of responsibility in which an authority, such as the government, is answerable for its actions refers to ________. ANS: accountability PTS: 1 DIF: Difficulty: Moderate REF: p. 15 OBJ: LO: 01 -03 NAT: BUSPROG: Anal ytic STA: DISC: Environmental Influence KEY: Bloom's: Knowledge 12. ______ is a system of full disclosure and openness that aims to avoid any semblance of corruption and cronyism.