Globalization and Global Value Chains Quiz
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Questions and Answers

What is the primary driver behind the emergence of global value chains?

  • Protectionist trade policies implemented by governments
  • Increased consumer demand for standardized products
  • Technological advancements that enable the fragmentation of production (correct)
  • Increased labor costs in developed countries

    • How does specialization contribute to increased efficiency and productivity under globalization?

  • Countries concentrate on producing a wide range of goods and services
  • Countries focus on producing goods and services in which they have a comparative disadvantage
  • Countries specialize in the production of goods and services in which they have a comparative advantage (correct)
  • Countries diversify their production to reduce reliance on imports

    • Which of the following is a key characteristic of trade liberalization under globalization?

  • Increased reliance on bilateral trade agreements over multilateral frameworks
  • Reduced tariffs and trade barriers to promote international trade (correct)
  • Increased tariffs and trade barriers to protect domestic industries
  • Reduced participation in the global market due to protectionist policies

    • What is the primary driver behind the significant increase in Foreign Direct Investment (FDI) under globalization?

    <p>Companies seeking to expand their operations and access new markets</p> Signup and view all the answers

    How has globalization affected the production and distribution of goods and services?

    <p>Globalization has enabled companies to relocate production facilities to countries with lower production costs</p> Signup and view all the answers

    What is the primary purpose of investment treaties in the context of globalization?

    <p>To provide protection and incentives for foreign investors</p> Signup and view all the answers

    How does globalization impact income distribution according to the text?

    <p>It can exacerbate income inequality within and between countries.</p> Signup and view all the answers

    What is one of the implications of globalization for labor and employment?

    <p>Movement of jobs and industries to countries with lower labor costs.</p> Signup and view all the answers

    How does globalization impact trade policy according to the text?

    <p>Nations adjust their trade policies to promote exports and attract investments.</p> Signup and view all the answers

    What impact does globalization have on monetary policy as mentioned in the text?

    <p>Monetary policies are managed to stabilize exchange rates and cope with capital flows.</p> Signup and view all the answers

    What is one implication of globalization for financial flows according to the text?

    <p>Interconnected global financial markets allowing for investments and capital transfers worldwide.</p> Signup and view all the answers

    How does globalization affect regulatory frameworks based on the text?

    <p>Nations harmonize their regulations and standards to facilitate international trade and investment.</p> Signup and view all the answers

    What is one of the key aspects of economic policy in the era of globalization related to trade?

    <p>Promoting exports to enhance competitiveness in the global market</p> Signup and view all the answers

    Why is attracting Foreign Direct Investment (FDI) important for many countries?

    <p>To foster economic growth and technology transfer</p> Signup and view all the answers

    What role does financial market regulation play in the era of globalization?

    <p>Implementing effective regulatory frameworks to ensure financial stability</p> Signup and view all the answers

    How does globalization impact countries in terms of exchange rate management?

    <p>It exposes countries to currency fluctuations affecting trade competitiveness</p> Signup and view all the answers

    What is a common challenge faced by countries in balancing economic policies in the era of globalization?

    <p>Balancing domestic interests with the benefits of global market integration</p> Signup and view all the answers

    Which action supports a country's adaptability to the changing global economic landscape?

    <p>Encouraging innovation and technological advancements</p> Signup and view all the answers

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