Globalization and Political Economy Quiz

Midterm Details

• The exam will be 80 minutes long, consisting of 50 multiple choice questions, each worth 1 mark.
• Bring a pencil and eraser to the exam.
• Study the slides provided and utilize the corresponding pages in the textbook, as indicated in the slides.
• Questions will not include specific numbers, such as statistics or rankings.

Globalization of Markets

• The merging of separate national markets into one global market is driven by low-cost transportation and global communications networks.

Globalization of Production

• Sourcing goods and services from different locations around the world leverages national differences in costs and quality of factors of production.

Political Economy Differences

• Countries with democratic regimes, market-based economic policies, and strong property rights protection tend to have higher economic growth rates.
• The benefits, costs, and risks of doing business in a country are influenced by its political, economic, and legal systems.

PESTEL Analysis

• PESTEL analysis helps evaluate the suitability of a country for international expansion.
• It identifies potential benefits, costs, and risks of global operations across political, economic, social, technological, environmental, and legal factors.

Language & Culture

• Language shapes how people communicate and perceive the world, impacting cultural differences.
• Countries with multiple languages often have diverse cultures.
• Understanding nonverbal cues in other cultures is crucial for effective communication.

The Role of Education

• Formal education provides individuals with essential skills and values, influencing a nation's competitive advantage.
• Education levels can indicate suitable product markets.

Culture & The Workplace

• Managers should be aware of ethical norms and how they might differ across cultures.

Ethical Approaches

• Utilitarian ethics: The moral worth of actions is based on their consequences, aiming for the best balance of good over bad outcomes.
• Kantian Ethics: People should be treated as ends, not merely as means to an end.

Deontological Models

• Focuses on upholding fundamental rights, regardless of consequences.

Ethical Decision-Making

• Hire ethical individuals: Emphasize ethical behavior in hiring and promotion processes.
• Build a strong ethical culture: Articulate values that prioritize ethics, implement a code of ethics, and incentivize ethical behavior.

Trade Advantages

• Unrestricted free trade offers potential gains, but complexities arise: resource immobility, diminishing returns, and dynamic effects on economic growth.

Heckscher-Ohlin Theory

• Explains comparative advantage based on differences in national factor endowments (land, labor, capital), leading countries to export goods intensive in locally abundant factors and import goods intensive in scarce factors.

Leontief Paradox

• Challenges the Heckscher-Ohlin theory, as the U.S., capital-abundant, exported goods less capital-intensive than its imports.

Product Life-Cycle Theory

• The location of sales and optimal production change as products mature, influencing trade flows.

This quiz examines essential concepts related to the globalization of markets and production, along with the impact of political economy on economic growth. Prepare by reviewing the provided study slides and textbook pages. Test your understanding of key theories and practical implications.