Globalization Quiz

What is globalization?

• A strategy to limit the movement of goods and services across borders

• A concept that focuses on self-sufficiency within a country

• A term used to describe the reduction of international trade barriers

• A process that involves increasing worldwide trade and movement of people and capital between countries

What are some reasons for the occurrence of globalization?

• Isolationist policies, limited access to foreign markets, lack of demand for goods and services

• Imposition of trade barriers, lack of technological advancements, high labor costs

• Decrease in international cooperation, lack of capital flow, limited access to resources

• Increasing number of free trade agreements, improved transport and communication infrastructure, industrialization of developing countries

What is protectionism?

• Government policies that protect domestic firms from foreign competition using trade barriers

• Reducing taxes on imported goods to stimulate international trade

• Promoting free trade agreements between countries

• Encouraging multinational companies to invest in the domestic market

What are the advantages of multinational companies setting up in a country?

• Reduction in domestic production, decrease in government revenue, limited product choice

• Increase in trade barriers, decrease in consumer options, lower tax revenue

• Creation of more jobs, increase in GDP, introduction of new technology

• Exploitation of local workers, depletion of resources, lack of innovation

What is the exchange rate?

• The amount of taxes imposed on imported goods

• The value of a country's GDP in relation to its population

• The cost of goods and services in a foreign market

• The price of one currency in terms of another currency

What happens when a currency appreciates?

• Exports become expensive, imports become cheaper

• Both exports and imports become cheaper

• Both exports and imports become more expensive

• Exports become cheaper, imports become expensive

Why do firms become multinationals?

• To increase trade barriers, limit consumer choice, reduce government revenue

• To limit their operations to one country, avoid competition, reduce profits

• To exploit local workers, deplete resources, influence government policies

• To produce goods with lower costs, extract raw materials, expand into different markets

What are the disadvantages of protectionism?

• Reduction in consumer choice, higher prices, limited innovation

• Imposition of trade barriers, reduction in global cooperation, limited access to resources

• Encouragement of foreign competition, lower prices, increased efficiency

• Increase in domestic production, more jobs, higher tax revenue

How does globalization impact domestic firms?

• Increased competition from foreign producers, potential closure of operations, job losses

• Isolation from global trade, self-sufficiency, stable economic growth

• Decreased competition, higher profits, expansion opportunities

• Limited access to international markets, reduced efficiency, higher costs

What is the role of multinational companies in the global economy?

• To spread risks, create jobs, increase GDP, introduce new technology

• To limit competition, reduce government revenue, exploit resources

• To restrict trade, limit consumer choice, influence government policies

• To isolate markets, reduce innovation, limit access to resources