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BUSMHR 2000 Exam 1 Questions and Correct Answers the Latest Update and Recommended Version
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BUSMHR 2000 Exam 1 Questions and Correct Answers the Latest Update and Recommended Version
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2 0 2 4 /2025 | © copyright | This work may not be copied for profit gain Excel!BUSMHR 2000 Exam 1 Questions and
Correct Answers the Latest Update and
Recommended Version
Globalization
→ The shift toward a more integrated and interdependent world economy.
Globalization of markets
→ The merging of historically distinct and separate national markets into one huge global
marketplace.
Globalization of production
→ The sourcing of goods and services from locations around the globe to take advantage
of national differences in the cost and quality of factors of production.
Factors of production
→ Labor, energy, land, and capital.
General Agreement on Tariffs and Trade (GATT)
→ Institution created by voluntary agreement between individual nation-states and their
functions are enshrined in international treaties.
World Trade Organization (WTO)
→ -GATT successor
→ -Primarily responsible for policing the world trading system and making sure nation-
states adhere to the rules laid down in trade treaties signed by WTO member states.
International Monetary Fund (IMF)
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→ -Created in 1944 by 44 nations that met at Bretton Woods, New Hampshire.
→ -Established to maintain order in the international monetary system.
World Bank
→ -Created in 1944 by 44 nations that met at Bretton Woods, New Hampshire.
→ -Set up to promote economic development.
→ -Less controversial than IMF
United Nations
→ -Established October 24, 1945
→ -Committed to preserving peace through international cooperation and collective
security.
UN Charter
→ An international treaty that establishes basic principles of international relations.
UN Four Purposes
→ 1. To maintain international peace and security.
→ 2. To develop friendly relations among nations.
→ 3. To cooperate in solving international problems and in promoting respect for human
rights.
→ 4. To be a center for harmonizing the actions of nations.
Group of Twenty (G20)
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→ -Established in 1999.
→ -Comprises the finance ministers and central bank governors of the 19 largest
economies in the world, plus representatives from the European Union and the
European Central Bank.
→ -Originally established to formulate a coordinated policy response to financial crises in
developing nations.
→ -2008/2009 it became the forum where major nations attempted to launch a
coordinated policy response to the global financial crisis.
Two main factors that underlie the trend toward greater globalization
→ 1. Decline in barriers to the free flow of goods, services, and capital that has occurred
since WWII
→ 2. Technological change, particularly the dramatic developments in recent decades in
communication, information processing, and transportation technologies.
International trade
→ Occurs when a firm exports goods or services to consumers in another country.
Foreign direct investment (FDI)
→ Occurs when a firm invests resources in business activities outside its home country.
Barriers to international trade
→ High tariffs on imports of manufactured goods.
Consequence of high tariffs
→ "Beggar thy neighbor" retaliatory trade policies.
→ Countries would progressively raise their trade barriers against one another.
The Uruguay Round
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→ -December 1993
→ -Extended GATT to cover services as well as manufactured goods.
→ -Provided enhanced protection for patents, trademarks, and copyrights.
→ -Established the World Trade Organization to police the international trading system.
GATT effect on average tariff rates
→ Average tariffs rates haven fallen significantly since 1950, now standing above 4%.
The Doha agenda
→ -Cutting tariffs on industrial goods, services, and agricultural products.
→ -Phasing out subsidies to agricultural producers.
→ -Reducing barriers to cross-border investments.
→ -Limiting the use of antidumping laws.
Lowering barriers to international trade
→ -Enables firms to view the world as their market.
→ -Allows firms to base production at the optimal location for that activity.
World trade growth
→ -Volume of world trade in merchandised goods has grown TWICE the rate of the
world economy since 1950.
→ -By 2012, world trade was 32 times LARGER than in 1950; but world economy was
8.9 times larger. (bad)
→ -Volume of world trade was THREE times larger in 2012 than in 1990; world economy
was 1.62 times larger.
Why world trade is growing faster than world GDP
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