Chapter 1 Multiple-choice questions

. Globalization refers to:

A more integrated and interdependent world.

Less foreign trade and investment.

Global warming.

Lower incomes worldwide.

. Which one of the following is a push factor in emigration?

Political freedom.

Job opportunities in host country.

Higher incomes in host country.

War.

. Which of the following do NOT facilitate globalization?

Improvements in communications.

Barriers to trade and investment.

Looser immigration controls.

Removal of controls on movement of capital across borders.

. Which of the following constitutes Foreign Direct Investment?

A speculator trying to make a profit by buying company shares on a foreign stock exchange.

A UK energy company buying territory abroad where it expects to find oil reserves.

A tourist purchasing foreign currency to spend on a holiday abroad.

A company signing an agreement with a wholesaler to distribute its products in foreign markets.

. Which of the following could be defined as a multinational company?

A firm that owns shares in a foreign company but does not participate in the company's decision making.

A UK based internet package holiday firm specializing in selling tours to Turkey to German customers.

A firm owning a chain of supermarket outlets outside its country of origin.

A finance company transferring its HQ and all its activities from the UK to the USA.

. Which of the following is a driver of globalization?

Trade barriers and controls on inflows of foreign direct investment.

Weak competition.

Technological advance.

Economies of scale are being exploited to the maximum.

. Globalization is beneficial for firms because:

It protects them against foreign competition.

It cushions them from the effects of events in other countries.

It opens up new market opportunities.

It increases the risk and uncertainty of operating in a globalizing world economy.

. The internet facilitates globalization by:

Making it more difficult to contact potential customers abroad.

Cutting the cost for firms of communicating across borders.

Making it harder to send money from one country to another.

Making it easier for governments to censor the information received by their citizens from abroad.

. What might western food MNCs encounter when launching operations in Africa or the Middle East?

No language barriers.

Customer tastes the same as those of their domestic customers.

Corruption.

Well-developed road and rail links

. Globalization can create problems for business because:

It can result in more competition.

It reduces vulnerability to political risk and uncertainty when operating abroad.

It means that they can increase prices.

All of the options given are correct.

Chapter 1 Multiple-choice questions

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