Test Bank Answers 8th Edition Globalization Chapter.20

Chapter 20

Globalization

Multiple Choice Questions
 

1. Which of the following is considered to be a direct characteristic of globalization?
A. Increasing trade among nations
B.  Interconnectedness of international financial markets
C.  Movements of people both within and between countries
D.  All of the above

 Difficulty: Easy

 

2. Which of the following is considered to be an indirect characteristic of globalization?
A. Significant realignments in political power
B. Greater inequalities in income and wealth
C. Cultural and economic homogenization
D. All of the above

Difficulty: Easy

 

3. Which of the following is a true statement? 
A. Over the last 60 years, the annual growth rate of economic activity in the world has been about 3.5 percent.
B. Over the last 60 years, the annual growth rate in total global exports has been about 6.2 percent.
C. Over the last 60 years, international trade has grown about twice as fast as overall economic growth.
D. All of the above.

Difficulty: Easy.
 

4. The interconnectedness of financial markets and the rapid movement of money and other financial assets is thought to contribute to
A. trade tariffs imposed by underdeveloped countries.
B. economic destabilization, especially in smaller countries.
C. inflation, especially in larger countries.
D. all of the above.

Difficulty: Easy

 

5. Globalization is often associated with a greater tendency for allocating economic activity toward
A. multi-sector institutions.
B. big government and public institutions.
C. private sector and market oriented institutions.
D. non-manufacturing and service institutions.

Difficulty: Easy

 

6.  Globalization is thought to shift power away from _________ to _____________.
A. national governments; regional authorities
B. regional authorities; national governments
C. international bodies; national governments
D. national governments; international bodies

Difficulty: Moderate

7.  In terms of world population, there are _________ today for every one person 50 years ago. A. 10 people
B. 5 people
C.  2.1 people
D. 0.5 people

Difficulty: Easy.

8.  While it is important not to draw conclusions about the effects of globalization from _________, it is equally important not to draw conclusions from _________________.
A. theory, empirical data
B. thorough statistical analysis of data, qualitative data sets
C. anecdotal evidence; subgroups of populations in aggregate data
D. anecdotal evidence; averages drawn from aggregate data

Difficulty: Moderate

9.  Data have suggested that in both macro and micro examples, increased exports have lead to increased environmental damage. This may be the result of __________________.
A. effective pollution control technology
B. effective pollution control institutions
C. neither A nor B.
D. both A and B.

Difficulty: Moderate

10.  The example of the island of Nauru, where a valuable deposit of phosphate was discovered in the early 1900s, offers the lesson that
A. globalization and increased exports lead to higher incomes for local residents.
B. natural resources lead to expanded, sustainable income for local residents.
C. an open economy and world trade do not always lead to sustainable economic growth.
D. globalization and open economies lead to poorer local economies.

Difficulty: Moderate

11.  The main institution governing world trade is the
A. World Trade Organization (WTO).
B. General Agreement on Tariffs and Trade (GATT).
C. Free Trade Organization (FTO).
D. there is no organization that governs world trade.

Difficulty: Easy

Effects of Environmental Regulations on Domestic Production and Imports

12. Refer to the figure above. The graph represents consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. The import supply curve is horizontal because
A. the world produces a relatively small amount of this good.
B. no matter how much this country buys, their demand does not impact world price.
C. this is a renewable good, for which there is no shortage.
D. all of the above.

Difficulty: Moderate

13. Refer to the figure above. The graph represents consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. If the country restricts imports to zero, domestic supply is ____. A. q₁
B. q₂
C. q₀
D. none of the above

Difficulty: Easy

14. Refer to the figure above. The graph represents consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. If the country allows imports, domestic supply is ____.

A. q₁
B. q₂
C. q₀
D. none of the above

Difficulty: Easy

15. Refer to the figure above. The graph represents consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. If the country allows imports, domestic demand is ____

A. q₁
B. q₂
C. q₀
D. none of the above

Difficulty: Easy

16. Refer to the figure above. The graph represents consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. If the country allows imports, the amount of imports demanded from world producers is ________.

A. (q₀ – 0)

B. (q₂ – q₁)
C. (q₀ - q₂)
D. (q₀ – q₁)

Difficulty: Easy

17. Refer to the figure above. The graph represents automobile consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. Assume that this country imposes emissions restrictions on automobiles that changes domestic supply to S’ and import supply to I’. The result of this emission policy is
A. an increase of imports from q₁ to q_2.
B. a decrease of domestic supply from q₀ to q_2.
C. a decrease of domestic demand from q₀ to q_2.
D. all of the above.

Difficulty: Easy

18. Refer to the figure above. The graph represents automobile consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. Assume that this country imposes emissions restrictions on automobiles that changes domestic supply to S’ and import supply to I’. The result of this emission policy is
A. increase imports from (q₁ - q₂) to (q₀ - q₂).

B. decrease imports from (q₁ - q₂) to (q₀ - q₂).
C. increase imports from (q₀ – q₁) to (q₂ – q₁).
D. decrease imports from (q₀ – q₁) to (q₂ – q₁).

Difficulty: Easy

19. The World Trade Organization (WTO) has clear rules and guidelines that allow governments to place restrictions on imports
A. that are produced in a way that damages the environment.
B. of products that domestic producers cannot produce competitively.
C. of products that interfere with domestic environmental aesthetics.
D. of products that have direct health implications, as long as it is done in a nondiscriminatory way.

Difficulty: Easy

20. The phrase “Race to the Bottom” describes 
A. the weakening of environmental standards brought about by competitive pressures in the global economy.
B. the incentive for high emission companies to locate within countries with lax environmental policies.
C. the dumping of industrial waste in oceans.
D. the continual decline of wages due to global competitive pressures.

Difficulty: Easy

21. In direct contrast to the ‘Race to the Bottom’ speculation, data reveals that
A. correlations across countries between income and the stringency of environmental protections regulations are positive.
B. higher incomes are associated with weaker environmental standards.
C. there is no correlation between income level and the stringency of environmental protections within a country.
D. both A and B.

Difficulty: Moderate

22. The Pollution Haven issue can be described as 
A. political pressure to weaken environmental standards in countries with low GDPs.
B. the incentive for high emission companies to locate within countries with lax environmental policies.
C. developing countries that become dependent on accepting trash for disposal.
D. unoccupied and undeveloped land where illegal dumping takes place.

Difficulty: Easy

23. One of the difficulties in trying to determine the validity of the pollution haven hypothesis is that 
A. weaker environmental regulation and enforcement is not the only criteria for deciding where to locate a firm.
B. globalization has made it difficult for firms to relocate from one country to another.
C. countries may have strict environmental laws but enforcement may be lacking.
D. companies may locate in a country with strict environmental policy but break the law.

Difficulty: Easy

24.  One of the environmental considerations that should be understood regarding increased international trade from globalization and the transport of goods is
A. the potential for an increase in the carbon footprint of global output.
B. the technology and carbon intensity differential between trading countries.
C. restrictive tariffs between two trading countries.
D. both A and B.

Difficulty: Easy

25. An example of a regional trade agreement among groups of countries and trading partners is ________________. 
A. the African Continental Free Trade Agreement
B. the Asia-Pacific Trade Agreement
C. the North American Free Trade Agreement or United States-Mexico-Canada Agreement
D. all of the above

Difficulty: Easy

26. The North American Free Trade Agreement (NAFTA) has been accused of encouraging US and Canadian firms to relocate to Mexico in search of
A. a pollution haven.
B. a race to the bottom.
C. reduced barriers to trade.
D. all of the above.

Difficulty: Easy

27. Many international environmental agreements include restrictions on trade. For example, the Montreal Protocol
A. prohibits export of controlled substances from signatory nations to nonsignatory nations.
B. prohibits import of controlled substances from nonsignatory nations to signatory nations.
C. prohibits trade of controlled substances between nonsignatory nations.
D. both A and B.

Difficulty: Easy

28. The purpose of environmental trade regulations is to

A. increase ozone-depleting chemicals.

B. ensure that production of CFCs does not simply migrate to nonsigning countries.

C. encourage technology transfer.

D. both B and C.

Difficulty: Easy

29. The 1975 Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) act regulates trading in species by
A. banning trade on those that are threatened with extinction.
B.  allowing trade, with conditions, for those species that may become threatened if trade is not restricted.
C. requires trade permits for those species that are protected within at least one country.
D. all of the above.

Difficulty: Easy

30. Trade restrictions for endangered species can be implemented through restrictions on imports or exports. Each will reduce the quantity traded, but restrictions on ______ reduce supply and ________ price, while restrictions on ____________ reduce demand and ________ price.
A. imports, increase; exports, decrease
B. exports, increase; imports, decrease
C. imports, decrease; exports increase
D. exports, decrease; imports, increase

Difficulty: Moderate

31. Globalization means

A. lower environmental impacts by the typical country

B. an increase in tariffs to regulate trade

C. more economic interconnections among countries

D. a greater influence of the United Nations on international relations

32. A good example of international trade destroying an environment is

A. coastal pollution in Myanmar

B. the wildfires in Australia

C. air pollution in India

D. the Pacific island of Nauru

33. An international pollution haven is a country that

A. is insulated from trade

B. has signed the Paris Agreement

C. attracts new pollution-control technology from abroad

D. attracts dirty industries from other countries

34. A good example of environmental trade restrictions is

A. the U.S. Clean Air Act

B. the European Trading Scheme

C. the Basel Convention on Transboundary movements of hazardous waste

D. the International Convention on Recycled Materials

35. An environmental race to the bottom involves

A. countries adjusting their environmental laws to attract foreign investment

B. countries tightening environmental regulations to out compete other countries

C. The U.N. Environment Program penalizing certain dirty countries

D. the race to develop new pollution-control technology

36. By carbon intensity we mean

A. greenhouse gases emissions from a typical car

B. greenhouse gases emissions from over a one-year period

C. greenhouse gases emissions under the Paris Agreement

D. greenhouse gases emissions per dollar of output

37. If exporting countries have higher average carbon intensity than importing countries,

A. trade will increase the world’s carbon footprint

B. trade will decrease the world carbon footprint

C. trade will have no effect on the world’s carbon footprint

D. trade will have an impact on the world’s carbon footprint, but it could go either way