The Global Business Environment Encompasses Many International Forces That Influence

question 101

Multiple Choice

The global business environment encompasses many international forces that influence the outcomes of companies doing business in foreign countries. Which of the following scenarios would best count as evidence of globalization?

• A) Diamonds mined in Country X are sold on the markets in Country Y. The proceeds are then used to fund a coup against the government in Country X.
• B) A natural disaster disables factories in Country X that produce computer chips for Company Y. Company Y reduces the number of employee shifts and raises the price of its products.
• C) Farmers in Country X have lost most of their wheat crops due to a drought. The market price for wheat triples and the government pays the farmers for a percentage of the lost wheat.
• D) Country X has almost mined all of its available natural energy sources. The government has been investing in alternative energy research for years and now an efficient synthetic energy source has been developed.
• E) Country X has raised the tax on oil products. As a result more people are taking public transportation and reducing unnecessary car travel.

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Definitions:

Required Reserve Deposits

The portion of depositors' balances that banks must have on hand as cash or on deposit with the central bank, as stipulated by the reserve requirement regulations.

Federal Reserve Board

The governing body of the Federal Reserve System, responsible for overseeing U.S. monetary policy and regulating banks.

George Bush

Refers to either the 41st President of the United States, George H. W. Bush (1989-1993), or his son, the 43rd President, George W. Bush (2001-2009).

Recession

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, income, employment, manufacturing, and retail sales.