Question

“globalization... has manifested itself in the interdependence of financial markets, the increasing role of multinational corporations (mncs), the transfer of technology, the increasing dependence of domestic markets on foreign trade, and the necessary interdependence of monetary, fiscal, and regulatory policy.”

1. based on the text, what has been a primary outcome of globalization?

a. the creation of stronger protectionist policies to ensure the strength of domestic trade.
b. the strong association between international economic policy, technology and trade.
c. the movement of countries toward a common currency.
d. the abolition of the gold standard in a free market.

1. suppose the u.s. government issued a tariff on steel from other nations. how would this affect the demand for u.s.-made steel in the united states?

a. demand for u.s.-made steel would decrease because imported steel would be cheaper.
b. demand for u.s.-made steel would decrease because the quality of steel would decline.
c. demand for u.s.-made steel would increase because the quality of steel would improve.
d. demand for u.s.-made steel would increase because imported steel would be more expensive.

Explanation:

Question 10

The text lists outcomes of globalization like interdependence of financial markets, MNCs' role, technology transfer, domestic markets' dependence on foreign trade, and policy interdependence. Option a is incorrect as globalization typically reduces protectionism. Option c is not supported by the text. Option d is also not mentioned. Option b aligns with the text's mention of interdependence of economic policy, technology, and trade (via foreign trade dependence, policy interdependence, technology transfer).

Step1: Recall Tariff Impact

A tariff on imported steel increases the price of imported steel.

Step2: Analyze Substitute Goods

U.S.-made steel and imported steel are substitutes. When imported steel becomes more expensive (due to tariff), consumers will shift demand to U.S.-made steel, increasing its demand.

Step3: Evaluate Options

• Option a: Incorrect, tariff makes imported steel more expensive, not cheaper.
• Option b: Incorrect, tariff doesn't directly affect quality of U.S. steel.
• Option c: Incorrect, tariff doesn't directly improve U.S. steel quality.
• Option d: Correct, as imported steel is more expensive, demand for U.S.-made steel (substitute) increases.

Answer:

b. The strong association between international economic policy, technology and trade.

Question 11