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WorksheetsGlobalisation Quiz
Total questions: 99
Worksheet time: 5hrs 57mins
Define globalisation.
The process by which businesses or other organizations develop international influence or start operating on an international scale.
A policy of isolation focusing on local, not international, development.
The study of global maps and geographic features.
A technology trend that connects devices across the globe.
Which of the following is a global company?
Apple
Local Bakery Co.
City Library
Identify three characteristics of globalisation.
Increased economic integration, cultural homogenization, and technological innovation
Decreased trade barriers, reduced cultural exchange, and lower internet usage
Higher local market focus, increased national tariffs, and reduced multinational corporations
Decreased international travel, lower foreign investment, and increased local production
Identify three characteristics of de-globalisation.
Increased trade barriers, national policies over global agreements, and reduced international cooperation
Increased global trade, universal policies, and enhanced international cooperation
Decreased technological innovation, increased global workforce, and reduced cultural exchange
Enhanced global communication, reduced national policies, and increased cultural exchange
Identify three causes of globalisation.
Increased trade, technology advancement, and political policies
Decreased transportation costs, local market saturation, and decreased internet usage
Increased local economies, decreased trade barriers, and technology decline
Technology advancement, decreased global communication, and increased trade barriers
How does trade liberalisation increase globalisation?
By reducing barriers to international trade
By increasing taxes on imports
By limiting the number of countries participating in trade
By decreasing the efficiency of production in various countries
Explain how reduced transport and communications costs causes globalisation.
By making international trade more cost-effective, encouraging companies to expand globally.
By increasing the cost of goods, reducing global trade.
By reducing the speed of information exchange, slowing down globalisation.
By limiting access to international markets, hindering global expansion.
Which of the following is a reason why Trans National Corporations (TNCs) cause globalisation?
In search of resources
In search of markets to sell their products
In search of more efficient locations to produce
All of the above
Which is the most significant cause of globalisation?
The drive for profits
Lower costs of transport
Reduction in trade barriers
All of the above
Which of the following are benefits of globalisation?
Increased world output, through comparative advantage
Reduction in absolute poverty by giving countries access to inflows of money
Facilitation of the transfer of knowledge and technology
Improved quality and choice for consumers
All of the above
Identify three disadvantages of globalisation:
Externalities from transport and increased production, Inequalities within and between countries, Vulnerability to external shocks
Externalities from transport and increased production, Structural unemployment, Exploitation
Inequalities within and between countries, Vulnerability to external shocks, Structural unemployment
Vulnerability to external shocks, Structural unemployment, Exploitation
What is a major reason for the public backlash against globalisation in recent years?
Concerns about global warming, habitat destruction and resource depletion
Concerns about the distribution of global wealth
Concerns from individuals/firms who have lost their jobs or been disadvantaged by international competition
All of the above
In your opinion do you think that globalisation benefits the world?
Yes, significantly
Yes, but only to some extent
No, it does more harm than good
No, it has no significant benefits
Which of the following is NOT a benefit of FDI to the host country?
Enhancement of job opportunities
Boost to local economy
Transfer of technology
Decrease in export opportunities
Which of the following is a disadvantage of FDI to the host country?
It can lead to a loss of sovereignty over domestic resources.
It increases the host country's export competitiveness.
It ensures technology transfer and skill development.
It can cause an outflow of the country's natural resources without adequate compensation.
What are global supply chains?
Networks that span across borders to source, produce, and deliver products
Local business operations within a single country
Digital platforms for global communication
None of the above
Which statement best defines the law of comparative advantage?
It is the ability of a country to produce a particular good at a lower marginal and opportunity cost over another.
It states that the demand for a product increases as its price decreases.
It is the principle that countries should only produce goods they can make most efficiently.
It refers to the increased efficiency of production as the number of goods being produced increases.
Which of the following best defines absolute advantage?
The ability to produce a good at a lower marginal cost than competitors.
The ability of a country, individual, company, or region to produce a larger quantity of a good or service than competitors, using the same amount of resources.
The capability to produce goods or services at a more efficient rate than any other economic act.
The ability to purchase or produce goods at a higher quality than competitors.
Draw a table to illustrate comparative advantage.
Show on your table the opportunity costs for each country of producing each good.
Calculate and compare the production costs
Identify the alternative uses of resources
Determine the benefits of trade
List the goods produced by each country
At what rate of exchange would trade be beneficial to both parties?
1:1
2:1
3:1
It depends on the specific circumstances of the trade
Draw a production possibility diagram to illustrate comparative advantage.
Evaluate the benefits of specialisation.
Increases efficiency and expertise
Reduces time spent on training
Allows for a deeper understanding of a subject
All of the above
Use comparative advantage to explain the benefits of free trade and globalisation.
It allows countries to specialize in the production of goods and services they are most efficient at, leading to increased economic efficiency and growth.
It restricts countries to trade only with neighboring countries to save on transportation costs.
It encourages countries to be self-sufficient and avoid international trade.
It mandates that countries must trade equal values of goods and services to maintain global economic balance.
What assumptions does the theory of comparative advantage make?
Countries can benefit from trade even if one is more efficient in producing goods or services
Trade can only be beneficial if countries are equally efficient
Comparative advantage relies on the assumption of constant costs
It assumes that factors of production are perfectly mobile
How useful do you think this theory is explaining the benefits of free trade?
Not useful at all
Slightly useful, but with unrealistic assumptions
Useful in explaining how countries can benefit from trade
Very useful, as increased trade leads to increased health and wealth
Define what is meant by the pattern of trade.
The historical changes in how countries trade with each other
The geographical distribution of industries
The typical sequence of events in economic crises
The regularities in the way countries trade with each other
Who are the UK's main trading partners?
United States, China, Germany
France, Italy, Russia
Australia, India, Brazil
Canada, Mexico, Japan
Which of the following is a reason why the pattern of trade has changed in the last 50 years?
Globalization
Technological advancements
Changes in international policies
Decrease in transportation costs
What impact does the rapid growth of economies such as China and India have on the pattern of trade in the global economy?
Increases global trade volume
Decreases global trade volume
No significant impact on global trade
Shifts global trade routes
How might other countries react to this?
With diplomatic discussions
By imposing sanctions
Through military intervention
No reaction
Define terms of trade.
The rate at which one country's goods exchange for another's
A legal document for international shipping
A list of tariffs imposed by a government
Economic policies related to import and export
What is the formula for calculating the terms of trade between two countries?
Net Export / Net Import
Export Prices / Import Prices
Gross Domestic Product / Total Population
Total Export Volume / Total Import Volume
What does the WTO stand for?
World Trade Organization
World Tourism Organization
World Transport Organization
World Technology Organization
How many countries are members of the WTO?
164 countries
153 countries
120 countries
180 countries
What is the main role of the WTO?
To enforce local trade laws
To facilitate international trade negotiations and agreements
To print global currencies
To provide loans to developing countries
What is meant by a trading Bloc?
A group of countries that act together for a common purpose
A financial strategy used by individual traders
A type of stock market
A digital currency platform
Which of the following is an example of a trading bloc?
European Union (EU)
Association of Southeast Asian Nations (ASEAN)
North American Free Trade Agreement (NAFTA)
World Trade Organization (WTO)
Distinguish between a Free Trade Area and a Customs Union.
A Free Trade Area eliminates tariffs between member countries, while a Customs Union adds a common external tariff on non-members.
A Customs Union allows free movement of labor and capital, while a Free Trade Area does not.
A Free Trade Area and a Customs Union are essentially the same.
Examples of a Free Trade Area include NAFTA, while examples of a Customs Union include the EU.
How has the growth in the number of trading blocs affected the WTO?
Increased its influence
Decreased its influence
Had no significant effect
Transformed its operational dynamics
Define trade creation and show this on a diagram.
Define trade diversion and show this on a diagram.
What is meant by bi-lateral trade agreements?
Agreements between two countries to enhance trading between them
A global agreement under the World Trade Organization
Unilateral trade policies of a country
None of the above
Why might a country prefer to negotiate its own bi-lateral trade agreement rather than adopt a free trade agreement negotiated through the WTO?
To have more control over the terms and conditions specific to its economic needs
Because it is mandatory for all WTO members to only negotiate bi-lateral trade agreements
To avoid participating in international trade
None of the above
Define tariff
A tax on imports or exports between sovereign states
A detailed list of services provided by a company with their prices
A governmental policy regarding the country's economy
A list of rules for regulating domestic trade
Define quota
A limit or restriction on the quantities of a particular product that can be imported or exported
A type of currency
A programming language
A mathematical equation
Define non-tariff barrier
A tax imposed on imported goods
A physical barrier to trade
Policies and regulations that restrict imports without imposing taxes
A trade agreement between two countries
Define voluntary export restraint agreements
A type of trade agreement between two countries to limit the export of certain goods to the importing country
An agreement where countries voluntarily increase export prices to support domestic markets
A mandatory quota imposed by an exporting country upon request of an importing country
None of the above
Show on a diagram the impact of a tariff (show the deadweight loss, and government revenue)
Use this diagram to explain the benefits of removing tariffs. (Note: Since the diagram is not visible in the image, please refer to the provided materials or context to complete this question.)
Define protectionism.
A policy of protecting domestic industries against foreign competition by means of tariffs, subsidies, import quotas, or other restrictions.
A financial strategy focused on international trade and investment.
A diplomatic approach to international relations, emphasizing peace and mutual benefit.
An economic policy aimed at maximizing exports and minimizing imports.
Which of the following is NOT a reason why a country uses protectionist policies?
To protect domestic jobs from structural unemployment, e.g. protecting jobs in the domestic car industry by subsidising domestic producers
To generate government revenue e.g. for developing countries this could be an important source of tax revenue to invest in supply side policies
To protect infant industries, e.g. the computer industry in Brazil was protected whilst this industry grew to a size where economies of scale could be achieved such that this company could withstand international competition
Strategic products such as food are often protected as the country may need to remain self-sufficient in some products in case of conflict
To increase the import of luxury goods and reduce the export competitiveness of domestic industries
Explain 4 disadvantages of protectionism (you should use the tariff diagram to strengthen your explanation). (Note: Since the diagram is not visible in the image, please refer to the provided materials or context to complete this question.) i. It reduces total consumption in an economy from Qd to Qd2 ii. There is a deadweight loss represented by the shaded triangles which reduces consumer and social welfare iii. It could lead to retaliation or tariff wars iv. It means consumers pay higher prices from Pworld to Pworld + Tariff
What are the 4 sections on the Balance of Payments?
Current Account, Financial Account, Capital Account, Balancing Account
Current Account, Savings Account, Financial Account, Capital Account
Current Account, Financial Account, Capital Account, Reserve Account
Checking Account, Savings Account, Loans Account, Investments Account
What is the difference between a credit and a debit item?
Credit items increase assets or decrease liabilities, while debit items decrease assets or increase liabilities.
Credit items decrease assets or increase liabilities, while debit items increase assets or decrease liabilities.
Credit items are used in sales transactions, while debit items are used in purchase transactions.
There is no difference; both terms can be used interchangeably.
Identify the 4 sections on the current account, and identify an example that could appear in each section.
Goods, Services, Income, and Transfers - Example: Export of cars, Import of services, Earnings from foreign investments, and Remittances
Assets, Liabilities, Equity, and Expenses - Example: Purchase of machinery, Bank loan, Shareholder capital, and Utility bills
Revenue, Expenses, Assets, and Liabilities - Example: Sales income, Cost of goods sold, Inventory, and Bank overdraft
Imports, Exports, Investments, and Loans - Example: Import of oil, Export of software, Foreign direct investment, and International loan
What is meant by the financial account?
It refers to the component of a country's balance of payments that records all transactions made between entities in one country with entities in the rest of the world for items like direct investment, portfolio investment, and other investments.
It is a detailed report of a company's financial performance over the fiscal year.
It represents the financial obligations a country has to international institutions.
It is a summary of government receipts and spending in a fiscal year.
What is meant by the capital account? Name an item that could be included here.
What is the relationship between the current account and the economic cycle?
What is meant by visible trade?
What is meant by invisible trade?
How would the balance of payments be affected by the selling of a UK company to a Spanish company?
What is the largest item on the UK current transfers account?
What are the implications for the balance of payments of running a large current account deficit?
Summarise the current position of the UK's Balance of Payments.
Explain 4 causes of a deficit on the current account.
Explain 4 strategies that could be used to correct a deficit on the current account.
What is meant by global trade imbalances?
What are the implications of global trade imbalances?
What is meant by a fixed exchange rate system?
Why might a country want to fix its exchange rate?
What is meant by a devaluation or a revaluation?
What is meant by a floating exchange rate system?
Identify and explain 4 factors that would increase the demand for £ sterling.
What can cause an exchange rate to appreciate?
What can cause an exchange rate to depreciate?
What is the difference between a devaluation and a depreciation?
What is the difference between a revaluation and an appreciation?
What is meant by the purchasing power parity theory of exchange rates?
What is meant by hot money?
What are the advantages and disadvantages of a floating exchange rate?
What are the advantages and disadvantages of a fixed exchange rate?
What is meant by a managed exchange rate?
How can the government and/or central bank influence exchange rates?
What are the consequences of competitive devaluations or depreciations (use the J-curve and Marshall-Lerner condition in your answer)?
How does the exchange rate influence other macro-economic indicators?
What is FDI?
How does the exchange rate influence FDI?
What are the two main measures of international competitiveness?
Identify and explain 3 factors that will affect the relative unit labour costs of a country over time: i. Productivity – if output per hour falls, then productivity will fall, meaning that the average cost of labour per unit of output will rise ii. Wages – if wages rise at a faster rate than productivity then unit labour costs will rise e.g. if there is an increase in the National Minimum Wage, and a less than equivalent increase in productivity iii. If labour taxes such as employers National Insurance payments rise, then this will increase the cost of employing labour, so unit labour costs will rise
Identify and explain factors that would affect relative export prices over time?
Identify 4 of the 12 pillars of competitiveness used by the Global Competitive Index (GCI) to rank countries in terms of competitiveness.
What are the benefits of being internationally competitive?
Are there any issues with being internationally competitive?
How do the terms of trade impact on a countries competitiveness?
What is meant by the real exchange rate?
What is meant by the sterling effective exchange rate?
What is meant by labour productivity?
How might high relative inflation rates affect a countries competitiveness?
