Chapter 12

What is globalization primarily driven by?

• a) Increased barriers to trade.

• b) Technological advancements and cultural exchange.

• c) Reduction in international relations.

• d) National isolation.

How does international trade benefit countries?

• a) It depletes natural resources.

• b) It promotes economic independence.

• c) It provides access to products unavailable domestically.

• d) It eliminates economic specialization.

What does trade openness indicate?

• a) A country’s reluctance to trade.

• b) The degree of globalization in an economy.

• c) The growth of domestic industries.

• d) The reduction of foreign investments.

What is the key distinction between globalization and internationalization?

• a) Globalization focuses on domestic markets, while internationalization focuses on global markets.

• b) Globalization involves integration, while internationalization involves trade relationships.

• c) Internationalization prioritizes cultural exchange, while globalization does not.

• d) Globalization requires protectionist policies.

Which of the following represents Foreign Direct Investment (FDI)?

• a) A short-term stock market investment.

• b) A long-term investment in production facilities abroad.

• c) Currency exchange in international trade.

• d) An import-export agreement.

What is a potential negative impact of labor migration on developing countries?

• a) Creation of job opportunities.

• b) Brain drain of skilled workers.

• c) Increased foreign direct investment.

• d) Strengthened education systems.

What does the term 'digital divide' refer to?

• a) Uneven global access to technological advancements.

• b) The separation of trade and technology policies.

• c) Rapid technology adoption across countries.

• d) The gap between multinational enterprises.

What factors typically attract Multinational Corporations (MNCs)?

• a) High local taxes.

• b) Cheap labor and raw materials.

• c) Stringent government policies.

• d) Small market sizes.

What type of trade agreement is NAFTA an example of?

• a) Free trade area.

• b) Common market.

• c) Customs union.

• d) Embargo agreement

What is the primary objective of protectionism?

• a) Encouraging free trade.

• b) Restricting imports to safeguard domestic industries.

• c) Eliminating government subsidies.

• d) Promoting cultural diversity.