1. The most general description of globalization is

Chapter 01

Multiple Choice

• The most general description of globalization is
• Large scale movement of labor across countries
• Expanded economic interaction between countries
• Large scale movement of goods across countries
• Large scale movement of capital across countries

Answer: B

• Which of the following is not within the definition of globalization?
• American firms establishing production facilities in Europe in the nineteenth century
• British investors financing the Argentinian railroad
• British colonization of India
• Chinese workers migrating to the US to work on building the railroad

Answer: C

• Which out of the following was the principal reason for the First Wave of Globalization?
• The invention of the telegraph
• The noticeable decline in international freight costs
• The rise of international banking
• Population growth in Europe

Answer: B

• Which out of the following was the principal reason for the First Wave of Globalization?
• The sharp decline in commodity prices
• The invention of the steamship
• The laying of the telephone cable across the Atlantic
• The migration from Europe to North America

Answer: A

(International Trade 1e John McLaren) (Test Bank all Chapters) 1 / 4

• The average tariff rate for a country is the
• Average of all the tariff rates imposed on different imported goods
• The average of the tariff rates the country has imposed over a ten-year span
• Tariff revenue as percentage of dutiable imports
• Tariff revenue as a percentage of all imports

Answer: D

• To calculate the average tariff rate of the US
• One would take the total tariff revenue collected and then divide that by the value of all the

goods on which the US has tariffs

• One would take the total tariff revenue collected and then divide that by the value of all the

imported goods

• One would calculate the simple average of all the different tariff rates imposed on the goods

on which the US has imposed tariffs

• One would calculate the weighted average of all the different tariff rates imposed on the

goods on which the US has tariffs, weighted by their dollar values

Answer: B

• The most significant reduction in US tariff rates took place between

A. 1900-1920

B. 1930-1950

C. 1950-1975

D. 1980-2005

Answer: A

• The second-highest tariff rate for the US in the twentieth century was reached in 1930-31
• Because average tariff rates rose due to the Great Depression
• Because the US put prohibitive tariffs on Japan and Germany
• Due to the enactment of the Smoot-Hawley Act
• Because the US retaliated against tariff hikes by the US’s principal trading partners

Answer: C

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• After 1950 the first impetus for globalization came from the
• Reconstruction of Europe
• Containerization in shipping
• Fall in the cost of air transportation
• Co-ordinated cut in trade restrictions under GATT-WTO

Answer: B

• Which is the most recent breakthrough in lowering transportation costs?
• Diesel-powered ships
• Containerization in shipping
• Fall in the cost of air transportation
• Mammoth oil tankers

Answer: C

• Which out of the following has had the greatest impact on Globalization since 1950?
• The repeal of Smoot-Hawley
• Containerization in shipping
• Fall in the cost of air transportation
• Co-ordinated cut in trade restrictions under GATT-WTO

Answer: D

• The definition of an “open” economy is the
• Sum of exports and imports as a percentage of GNP
• Exports minus imports as a percentage of GNP
• Exports plus imports
• Exports minus imports

Answer: A

• If the People’s Bank of China buys US Government Bonds, then from the US point of view

this would be called

• Inward FDI
• Outward FDI
• Inward Portfolio Investment
• Outward Portfolio Investment 3 / 4

Answer: C

• If Citibank lends funds to the Government of Ireland, then from the US point of view this

would be called

• Inward FDI
• Outward FDI
• Inward Portfolio Investment
• Outward Portfolio Investment

Answer: D

• If Credit Suisse buys mortgage-backed securities issued by Morgan Stanley, then from the

US point of view this would be called

• Inward FDI
• Outward FDI
• Inward Portfolio Investment
• Outward Portfolio Investment

Answer: C

• If Hyundai opens a factory in the US, which it owns wholly, then from the US point of view

this would be called

• Inward FDI
• Outward FDI
• Inward Portfolio Investment
• Outward Portfolio Investment

Answer: A

• If Hewlett-Packard opens a factory in Singapore, which it owns wholly, then from the US

point of view this would be called

• Inward FDI
• Outward FDI
• Inward Portfolio Investment
• Outward Portfolio Investment

Answer: B

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