Financial Planning 4.03

Matthias received his education and degree from a university in London. He was then quickly hired away by an Italian auto manufacturer. What negative effect of globalization will England realize as a result of Matthias's action?

• unequal economic growth

• brain drain

• nationalism

• multiculturalism

How does the ability to travel more freely contribute to globalization?

• It breaks down political barriers between countries.

• It helps enable the spread of culture and ideas.

• It escalates competition between businesses.

• It promotes a sense of nationalism.

Swedish engineers influencing ideas in the United States is an example of which advantage of globalization?

• sharing of ideas

• variety of products

• increased competition

• increased infrastructure

How has globalization affected consumers?

• It has made them more closed-minded toward other cultures and ethnicities.

• It has given them a greater and better variety of products to choose from.

• It has increased competition among them.

• It has helped them to save on taxes.

Brain drain occurs when:

• a country loses talented employees to better opportunities in other countries.

• people who speak different languages try to communicate with one another.

• consumers spend too much time shopping online.

• businesses outsource jobs to other countries.

Companies that operate at the international level should be aware of political factors that affect trade, such as civil unrest or:

• business cycles.

• currency rates.

• competitors.

• embargoes.

One reason that some U.S. businesses have moved part of their operations to foreign countries is to:

• lower their labor costs.

• improve domestic relations.

• reduce currency fluctuations.

• meet communication standards.

Jasper wanted to expand his clothing business and saw a large growth potential in Brazil. To start a new business there from scratch was going to be too expensive, so he decided to buy an existing clothing company in Rio de Janeiro, Brazil, which he would control as part of his existing company. Which path to entering a foreign market did Jasper take?

• He started a franchise opportunity.

• He created a wholly owned subsidiary.

• He formed a multinational corporation in Brazil.

• He issued licensing rights to the people in Brazil.

One of the biggest barriers that separates countries/regions is:

• methods of travel.

• brain drain.

• technology.

• language.

A business can create a wholly owned subsidiary by building a facility in a foreign market or by:

• buying an existing firm in the market.

• signing a licensing agreement.

• exporting to the market.

• finding a franchisee.