Chapter 2 Globalization of Markets and the Internationalization of the Firm
1) Globalization of production activities and services is a dimension of market globalization.
2) Companies strive to drive down prices through economies of scale, by standardizing what they sell.
3) Falling trade barriers are facilitated by the WTO.
4) Technological advances have helped make internationalization affordable for all sizes of firms.
5) The Internet has increased the cost of transmitting voices, data, and images.
6) Mobile phones are the most transformative technology in developing economies.
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10) In describing the main driver behind Pax's expansion to China, Rashid is most likely to emphasize ________.
A) high rate of employee attrition in China
B) advances in technology
C) reduction of barriers to trade
D) integration of world financial markets
11) Financial market integration makes it possible for internationally active firms to ________.
A) nationalize manufacturing industries
B) minimize offshoring
C) increase tariffs on the import of automobiles and industrial machinery
D) engage in foreign currency transactions
12) The globalization of finance ________.
A) enables companies to minimize offshoring
B) contributes to firms' abilities to develop and operate world-scale production and marketing
C) discourages innovation
D) discourages free international exchange of goods and services
13) Which of the following statements is true of technological advances?
A) It provides a means for globalization to happen.
B) It discourages internationalization.
C) It inhibits the growth of new products and services.
D) It helps consolidate traditional values among consumers worldwide.
14) ________ are the most transformative technology in developing economies.
A) Mobile phones
15) Technological advances have contributed to manufacturing by ________.
A) promoting traditional lifestyles and values
B) reducing cross-border flow of factors of production
C) promoting nationalization
D) reducing production costs
16) The ability of a nation to govern its own affairs is known as ________.
17) The relocation of manufacturing and other value-chain activities to cost-effective locations abroad is known as ________.
B) cultural imperialism
18) An underground economy ________.
A) refers to the informal economic sector
B) refers to the formal economic sector
C) is characterized by dominantly legal transactions
D) is regulated and monitored by public authorities
Acme Software (Scenario)
Acme Software is a U.S.-based maker of software products for the health care industry. Recently Acme has been investigating whether it would be beneficial to internationalize some of its value-chain activities. Acme hires a consulting group to help determine which, if any, value-chain activities could be conducted abroad to promote business growth. The consulting group identifies two health care software development companies in India that could provide programming services at a lower cost than Acme's current expenditures for programming. In addition, the consultants conduct international market research which shows that German health care companies have a strong demand for the type of software that Acme offers.
19) Which of the following activities in Acme's...