Globalization-CFA

Which of the following best illustrates how globalization affects labor markets in developing countries?

• Governments reduce interest rates to stimulate demand
• Technology companies invest in domestic infrastructure
• Factories relocate to countries with lower wages
• Trade agreements raise tariffs on imported goods

Which is a direct effect of globalization on technological advancement?

• Reduced use of automation in manufacturing
• Slower international communication
• Quicker spread of innovation between countries
• Decreased international competition

Globalization can lead to an unequal distribution of income primarily because:

• All workers benefit equally from trade agreements
• High-skilled workers often benefit more than low-skilled workers
• Governments restrict foreign investment
• All countries implement identical labor policies

A country joins a free trade agreement that eliminates tariffs on imports. Which of the following is a likely short-term impact?

• Domestic producers face increased competition
• Government revenue from exports increases
• Imports decrease sharply
• Unemployment immediately falls

Which environmental impact is most commonly associated with increased globalization?

• Reduced emissions in all countries
• Higher rates of recycling globally
• Deforestation due to increased demand for resources
• More equal access to clean water

Why might “Made in China” or “Made in America” labels be misleading in today’s economy?

• Most goods are still made only in one country
• Raw materials are more important than labor
• Products often involve global supply chains with production steps in multiple countries
• Tariffs have removed the need for country-of-origin labels

According to the Elephant Graph, who benefited the most from globalization between 1988 and 2008?

• The global poorest 5%
• Middle-class workers in developed countries
• Emerging middle class in developing nations
• Billionaires in Western nations

What is the most likely explanation for a U.S.-based call center relocating its operations to the Philippines?

• Increased demand for luxury goods
• Advancements in automation
• Global labor arbitrage and language compatibility
• Decline in internet accessibility

Which of the following best demonstrates “creative destruction”?

• A new law increases minimum wage
• An old product is banned due to safety concerns
• Smartphones replace landline phones and digital cameras
• Oil prices fluctuate due to OPEC decisions

What economic trend explains why average real salaries for U.S. high school and college grads have remained stable since 2000 despite technological progress?

• Universal wage inflation
• Supply and demand perfectly matched
• Decline in education levels
• Wage increases in some jobs offset declines in others