Question

1. Which of the following best exemplifies the globalization of markets?

A. The clothes of Sea Shell Fashions, a U.S.-based company, are hand sewn by workers in India.

B. The accounts of a U.K.-based finance company are maintained and managed by an accounting firm in the Czech Republic.

C. Fluffy Pillows, a U.S.-based pillow company, sells the same pillows worldwide.

D. Iconic Industries Inc., a U.S. energy company, has generated capital from investors all over the world.

E. The wine manufacturing firm Violet Wines procures high-quality grapes from neighboring countries.

2. Why was the World Trade Organization established?

• A. to preserve peace through international cooperation

• B. to maintain order in the international monetary system

• C. to formulate a coordinated policy response to financial crises

• D. to police the international trading system

• E. to promote economic development

3. A macro factor underlying the trend toward greater globalization is

A. the rise in communism around the world.

• B. the decline in trade barriers since the end of World War II.

• C. the increasing popularity of state-owned enterprises.

• D. the development of a single currency.

• E. the establishment of a global legal system.

Answer 1

1. Which of the following best exemplifies the globalization of markets?

C. Fluffy Pillows, a U.S.-based pillow company, sells the same pillows worldwide.

Reason: Globalization of markets involves sellers sitting in one place be able to sell their goods and services to countries and people across the globe

2. Why was the World Trade Organization established?

D. to police the international trading system

Reason: The WTO was setup to promote and regulate fair trading practices between countries and to encourage free trade.

3. A macro factor underlying the trend toward greater globalization is

B. the decline in trade barriers since the end of World War II.

Reason: The decline of trade barriers since the end of WW II led to greater trade among countries, leading to greater globalization