CPA Business Environment and Concepts (BEC) : Globalization

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Example Questions

Example Question #11 :Economic Concepts & Analysis

Globalization is often measured using the following metric:

Possible Answers:

World trade growth as a percentage of GDP

Exports as a percentage of imports

Shifts in global supply and demand curves

Exchange rate velocity

Correct answer:

World trade growth as a percentage of GDP

Explanation:

Globalization represents the increased dispersion and integration of the world's economies. It is often measured as the growth in world trade as a percentage of GDP.

Example Question #1 :Globalization

Each of the following is an effect from opening markets to foreign investment except:

Possible Answers:

A decrease in local firms' cost of capital

A change in the volatility of emerging stock market returns

A decrease in investment growth rates

An increase in the correlation of emerging stock markets with world markets

Correct answer:

A decrease in investment growth rates

Explanation:

Under this circumstance, investment growth rates will likely increase rather than decrease as there are more opportunities for investment and growth.

Example Question #2 :Globalization

Increased globalization is made possible by each of the listed factors except:

Possible Answers:

Reduced transportation costs

Deregulation of international financial markets

Regulation of currency values through the International Monetary Fund

Technological advancements including improved communications

Correct answer:

Regulation of currency values through the International Monetary Fund

Explanation:

The IMF does not regulate currency values. Its activities are designed to stabilize exchange rates but it is not empowered to regulate currency values.

Example Question #3 :Globalization

All of the following nations are considered emerging nations except:

Possible Answers:

China

Russia

Indonesia

Brazil

Correct answer:

Indonesia

Explanation:

The only other emerging nation not listed here is India.

Example Question #3 :Globalization

The concept of a global economic balance of power anticipates:

Possible Answers:

Trade balances are self regulating

A distribution of power and influence that ensures that no one nation or group of nations will dominate or interfere with the activities of others

工业化国家的G6总是lead the globe

Exchange rates are self regulating

Correct answer:

A distribution of power and influence that ensures that no one nation or group of nations will dominate or interfere with the activities of others

Explanation:

The concept of balance of power anticipates that no one nation will dominate or interfere with the activities of others.

Example Question #16 :Economic Concepts & Analysis

Which of the following is not a factor that drives globalization?

Possible Answers:

Technological advancements

Stronger currencies

Infrastructure and transportation improvements

Deregulation of international financial markets

Correct answer:

Stronger currencies

Explanation:

Stronger currencies have no impact on globalization, as currencies fluctuate all the time. These other factors would much more likely to facilitate international trade and global markets.

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