Economics Today and Tomorrow

Chapter 21: The Global Economy

The Global Economy

1
Improved telecommunications have affected global integration in all the following ways EXCEPT __________
A)increasing the cost of computing.
B)teaching people in developing nations about the rest of the world.
C)spreading fads and fashions.
D)encouraging more of the world's people to learn English.
2
The world's fastest growing 24-hour market is the buying and selling of __________
A)foreign currencies.
B)commodities.
C)United States government securities.
D)preferred stock.
3
Which of the following is a major drawback of telecommunications linking world financial markets?
A)A crash in one market can affect others at the same time.
B)Computer networks make insider information more accessible.
C)Governments have more access to private records.
D)Trading is more difficult because of the number of markets.
4
Direct foreign investment is __________
A)foreign investment in the U.S. stock markets.
B)domestic control of American companies.
C)economic imperialism.
D)the purchase by foreigners of real estate and businesses in another country.
5
Some people argue against foreign investment in America because they fear __________
A)foreign control.
B)that U.S. financial capital will be tied up.
C)that foreigners will be subject to U.S. policy.
D)that it depletes the U.S. securities that Americans may purchase.
6
Some people argue that foreign investment and debt purchases should be encouraged for all of the following reasons EXCEPT
A)to increase foreign incentive to keep the American economy strong.
B)to keep real estate prices from collapsing.
C)to reduce competition among U.S. businesses.
D)to help the legal structure stay on a stable course.
7
Today the total share of foreign ownership of American industries is __________
A)about 2 percent.
B)about 6 percent.
C)about 20 percent.
D)about 40 percent.
8
How many multinationals (firms that do business or have offices or factories in many countries) exist in the world today?
A)60
B)600
C)6,000
D)60,000
9
Which of the following statements about multinationals today is TRUE?
A)Multinationals account for between $20 to $25 trillion of the world's productive assets.
B)The top 100 multinationals account for less than 20 percent of the world's productive assets.
C)The top 100 multinationals account for a dominant share of the world's productive assets.
D)About half of the world's 37,000 multinationals are owned by Britain and the United States.
10
Most multinationals make cross-border investments, which is when they invest __________
A)in their own nations and in regions that are closest to home.
B)in every corner of the world.
C)most heavily in western Europe.
D)in heavily agricultural nations.
11
Alliances can help firms compete more effectively in the global markets by __________
A)reducing protective and other tariffs.
B)decreasing the profits of local firms.
C)compensating for one another's limitations.
D)eliminating the competition.
12
Which of the following is a result of the globalization of the world?
A)Immigration to the United States has decreased.
B)America has become a multicultural society.
C)America has become a homogeneous society.
D)In many cities, the minority population has decreased.
13
Open-mindedness and tolerance are __________
A)required under Constitutional law.
B)characteristics of multinationals.
C)more difficult to achieve than ever because of the competition for scarce resources.
D)more necessary than ever because of globalization.
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