Georgia DECA Advertising Practice Test

What is one effect of globalization on businesses?

1. Increased local employment only

2. Expansion of market reach

3. Isolation from international markets

4. Lowering product quality

The correct answer is: Expansion of market reach

The expansion of market reach is a significant effect of globalization on businesses. Globalization enables companies to operate beyond their domestic borders, allowing them to tap into new markets and access a larger consumer base. This expansion can lead to increased sales, diversified revenue streams, and enhanced brand recognition across different regions and cultures. By entering international markets, businesses can leverage their existing products and services to meet the needs of consumers in various countries, adapt to local preferences, and ultimately drive growth. This broader market presence not only helps in thriving amidst competition but also encourages innovation and the exchange of ideas across borders. In contrast, the other options highlight limitations or negative outcomes that are not directly related to the positive effects of globalization. While increasing local employment can be a benefit in certain scenarios, it does not capture the essence of globalization's broader impact on businesses. Similarly, isolation from international markets contradicts the fundamental concept of globalization, as one of its core principles is to encourage interconnectedness. Lowering product quality is often seen as a potential risk rather than a direct outcome of globalization itself. Thus, the correct answer reflects how globalization positively influences the market potential for businesses.