Globalization and Multinational Corporations
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Questions and Answers

What is the primary characteristic of globalization?

  • Isolation of national economies
  • Shrinking economic and social ties between countries
  • Decline of international trade
  • Expansion of economic and social ties between countries (correct)

    • Which of the following is NOT a key driver of globalization?

  • Expansion of corporate institutions
  • Decrease in international investment (correct)
  • Reduction in trade barriers
  • Technological advancements

    • What was one of the key debates about globalization, according to Hirst & Thompson (1999)?

  • How national economies remain disconnected
  • The declining role of multinational corporations
  • How much globalization has affected national economies (correct)
  • The impact of trade liberalization on developed nations

    • What entity is primarily responsible for integrating national economies into the global market?

    <p>Multinational corporations</p> Signup and view all the answers

    Which of the following best describes the 'inter-national economy' perspective of globalization?

    <p>National economies remain the key players despite increased global interconnection</p> Signup and view all the answers

    Which of the following defines a multinational corporation (MNC)?

    <p>A firm with subsidiaries in two or more national economies</p> Signup and view all the answers

    What is the primary purpose of Foreign Direct Investment (FDI) for an MNC?

    <p>To achieve control over marketing, production, or other activities in another economy</p> Signup and view all the answers

    Which type of investment involves MNCs building new facilities in a foreign economy?

    <p>Greenfield investment</p> Signup and view all the answers

    How do MNCs contribute to the spread of globalization?

    <p>By spreading ideas, technology, and tastes across borders</p> Signup and view all the answers

    What is one common impact of MNCs on the countries they invest in?

    <p>Increase in international trade and technology transfer</p> Signup and view all the answers

    What was the value of FDI stocks globally by 2023?

    <p>$35 trillion</p> Signup and view all the answers

    Which regions have experienced significant FDI growth since 2000?

    <p>Developing economies, especially China and India</p> Signup and view all the answers

    Which factor has NOT significantly contributed to FDI growth?

    <p>Digital and technology-based investments</p> Signup and view all the answers

    Why has FDI into emerging markets like China and India increased in recent decades?

    <p>Availability of skilled labor and growing consumer markets</p> Signup and view all the answers

    What type of economic activity is typically driven by FDI?

    <p>Technology development, manufacturing, and services</p> Signup and view all the answers

    What is the relationship between international trade and tariffs since 1913?

    <p>Tariffs have decreased significantly, promoting trade</p> Signup and view all the answers

    By 2023, the average global tariff rate for manufactured goods fell to:

    <p>3%</p> Signup and view all the answers

    What was the global impact of the COVID-19 pandemic on international trade?

    <p>Supply chains were disrupted and demand decreased</p> Signup and view all the answers

    What contributed to the slowdown in global trade growth between 2004 and 2023?

    <p>Global recessions, trade wars, and the COVID-19 pandemic</p> Signup and view all the answers

    Which global organization is responsible for promoting free trade and reducing tariffs?

    <p>World Trade Organization (WTO)</p> Signup and view all the answers

    What is the primary role of trade unions?

    <p>To advocate for workers' rights and fair working conditions</p> Signup and view all the answers

    Which global organization supports labor rights and works with trade unions worldwide?

    <p>International Labour Organization (ILO)</p> Signup and view all the answers

    How has globalization affected labor unions in developed economies?

    <p>Weakened their influence, leading to wage stagnation</p> Signup and view all the answers

    What has been a primary focus of the International Trade Union Confederation (ITUC) in recent years?

    <p>Advocating for labor rights in the gig economy and for platform workers</p> Signup and view all the answers

    What is an International Framework Agreement (IFA)?

    <p>A global labor agreement that sets standards for MNCs</p> Signup and view all the answers

    How has globalization impacted wages in advanced economies?

    <p>It has contributed to wage stagnation and income inequality</p> Signup and view all the answers

    What role does automation play in wage stagnation?

    <p>It has replaced many low- and middle-skill jobs, leading to wage suppression</p> Signup and view all the answers

    How have labor unions responded to the challenges of globalization?

    <p>By advocating for stronger protections for workers and negotiating global labor standards</p> Signup and view all the answers

    What is the 'race to the bottom' in terms of labor standards?

    <p>The pressure to reduce labor standards to attract foreign investment</p> Signup and view all the answers

    Which group has been most affected by income inequality due to globalization?

    <p>Low- and middle-income workers</p> Signup and view all the answers

    What has been one of the ITUC’s key achievements in recent years?

    <p>Increasing worker protections in the gig economy</p> Signup and view all the answers

    Which of the following challenges has the ITUC addressed through its advocacy efforts?

    <p>Precarious work conditions for platform workers</p> Signup and view all the answers

    Study Notes

    Globalization

    • Characterized by expanding economic and social ties between countries.
    • Driven by technological advancements, reduced trade barriers, and increased international investment.
    • One debate focuses on the extent of globalization's impact on national economies.
    • Multinational corporations (MNCs) are the primary entities integrating national economies into the global market.
    • The "inter‐national economy" perspective suggests national economies remain crucial despite increased global interconnectedness.

    Multinational Corporations

    • A multinational corporation (MNC) operates subsidiaries in two or more national economies.
    • MNCs engage in foreign direct investment (FDI) for control over marketing, production, or other activities in foreign economies.
    • Greenfield investment involves MNCs building new facilities in a foreign economy.
    • MNCs contribute to globalization by spreading ideas, technology, and tastes across borders.
    • Impacts of MNCs on host countries include increased international trade, technology transfer, and potential job creation.

    Foreign Direct Investment (FDI)

    • Global FDI stocks reached $45 trillion by 2023.
    • Significant FDI growth has occurred in developing economies, especially China and India, since 2000.
    • The rise of emerging markets, declining corporate tax rates, and digital investments have driven FDI growth.
    • FDI into China and India is driven by the availability of skilled labor and growing consumer markets.
    • FDI primarily fuels technology development, manufacturing, and services industries.

    International Trade and Tariffs

    • Tariffs have significantly decreased since 1913, promoting international trade.
    • The average global tariff rate for manufactured goods fell to 3% by 2023.
    • The COVID-19 pandemic disrupted supply chains and decreased demand, impacting international trade.
    • Global recessions, trade wars, and the COVID-19 pandemic slowed global trade growth.
    • The World Trade Organization (WTO) promotes free trade and reduces tariffs.

    Labor Rights and Trade Unions

    • Trade unions advocate for workers' rights and fair working conditions.
    • The International Labour Organization (ILO) supports labor rights and works with trade unions worldwide.
    • Globalization has weakened labor unions in developed economies, contributing to wage stagnation.
    • The International Trade Union Confederation (ITUC) focuses on protecting labor rights in the gig economy and for platform workers.
    • An International Framework Agreement (IFA) sets global labor standards for MNCs.

    Impact of Globalization on Wages and Employment

    • Globalization has contributed to wage stagnation and income inequality in advanced economies.
    • Automation has replaced many jobs, impacting wages, particularly for low- and middle-skill workers.
    • Labor unions advocate for stronger worker protections and global labor standards in response to globalization's challenges.
    • The "race to the bottom" refers to the pressure to reduce labor standards to attract foreign investment.
    • Income inequality due to globalization primarily affects low- and middle-income workers.

    Trade Unions and Global Advocacy

    • The ITUC advocates for worker protections for platform workers and in the gig economy.
    • The ITUC addresses various challenges related to precarious work conditions and worker vulnerability.

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    Description

    This quiz explores the key concepts of globalization and the role of multinational corporations (MNCs) in integrating national economies into the global market. It examines how MNCs engage in foreign direct investment and the implications of their activities on local economies and cultures. Test your understanding of how globalization shapes economic interactions worldwide.

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