Dreher (2006) Measures Globalization on Three Dimensions: Economic, Social and Political

question 5

Multiple Choice

Dreher (2006) measures globalization on three dimensions: economic, social and political. The political integration dimension would capture:

• A) Levels of political risk
• B) The number of political parties in the country
• C) Diffusion of government policies around the world
• D) Tendency towards socialism as a form of government

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Definitions:

Marginal Costs

The additional cost incurred in producing one more unit of a product or service.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not influence future business decisions.

Shut Down

The process of ceasing operations or activity, either temporarily or permanently.

Average Variable Costs

The per unit cost of production that varies with the level of output, including elements like labor and raw materials.