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Q:
(p. 64) A favorable balance of trade occurs when the value of a country's exports exceeds the value of its exports.
Q:
(p. 76) The U.S. government has announced a 5 million-pound annual limit on beef imported from Argentina. This type of trade restriction is called a(n):
A. embargo.
B. revenue tariff.
C. import quota.
D. export cap.
Q:
(p. 64) A favorable balance of trade occurs when the value of a country's imports exceeds the value of its exports.
Q:
(p. 76) U.S. firms that produce sophisticated military hardware are prohibited from exporting that equipment to "unfriendly" governments, such as Iran. This complete ban on exporting sensitive technology to specific countries is an example of a(n):
A. import quota.
B. boycott.
C. tariff.
D. embargo.
Q:
(p. 63) Every $1 billion in U.S. exports generates 25,000 jobs in the U.S.
Q:
(p. 78) The common market arrangement that groups Brazil, Argentina, Paraguay, Uruguay, Chile, and Bolivia is called the:
A. South American Six.
B. World Trade Organization (WTO).
C. Latin Free Trade Zone.
D. Mercosur.
Q:
(p. 63) Exporting from the U.S. to the world is a terrific boost to the U.S. economy.
Q:
(p. 78) The three countries participating in NAFTA are:
A. Canada, Panama, and the United States.
B. Mexico, Panama, and the United States.
C. Canada, Nicaragua, and Mexico.
D. Canada, Mexico, and the United States.
Q:
(p. 63) If your business has an outstanding product, exporting offers an easy way to improve your profitability.
Q:
(p. 77) The European Union created a single monetary unit to replace the national currencies of twelve member nations. This common currency is known as the:
A. e-dollar.
B. pound.
C. mercosur.
D. euro.
Q:
(p. 62) Foreign travel can help in identifying global business opportunities.
Q:
(p. 77) A _____________ is a regional group of countries that have no internal tariffs, a common external tariff, and the coordination of laws to facilitate exchange among the member countries.
A. trade cartel
B. mutual trade association
C. common market
D. joint venture
Q:
(p. 63) Just about anything that can be sold in the United States can also be sold to buyers in other countries.
Q:
(p. 76) The __________ represents the first attempt to establish a truly global mediation center to resolve international trade disputes.
A. International Trade Court
B. World Trade Organization
C. Global Trade Commission
D. United Nations Arbitration Center
Q:
(p. 63) Many foreign students in U.S. colleges and universities have discovered profitable opportunities by importing goods from their home countries into the United States.
Q:
(p. 76) The purpose of the General Agreement on Tariffs and Trade (GATT) is to:
A. facilitate global trade.
B. create common market arrangements in specific geographical regions.
C. negotiate an end to civil wars.
D. establish a set of international property right laws.
Q:
(p. 62) Small businesses are less involved in global trade today than in the past.
Q:
(p. 76) Which of the following government policies creates an environment of restrictive standards intended to make it difficult for foreign firms to successfully sell their products?
A. monetary tariffs
B. countertrade policies
C. nontariff barriers
D. export constraint policies
Q:
(p. 62) The comparative advantage theory states that all nations should strive to become self-sufficient in order to enjoy the highest standard of living.
Q:
(p. 76) A(n) __________ refers to a complete ban on importing or exporting of products from a specific country.
A. absolute tariff
B. health quarantine
C. quota
D. embargo
Q:
(p. 62) According to the theory of comparative advantage, a country should buy from other countries those goods it produces most efficiently.
Q:
(p. 76) In an effort to protect domestic jobs, some countries will place a limit on the number of certain types of products that can be imported. These limits are called:
A. revenue tariffs.
B. protective tariffs.
C. import quotas.
D. tariffs.
Q:
(p. 60) When a U.S. company buys oil from Saudi Arabia, this is an example of a U.S. import.
Q:
(p. 76) ________ tariffs are designed to raise money for the government.
A. Regulatory
B. Revenue
C. Price
D. Profit
Q:
(p. 61) Free trade results in a mutually beneficial exchange for the countries involved.
Q:
(p. 75) A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.
A. protective
B. restrictive
C. progressive
D. revenue
Q:
(p. 60) Countries with a high standard of living are referred to as developing countries.
Q:
(p. 75-76) The two basic types of tariffs are:
A. goods and services.
B. general and limited.
C. comparative and absolute.
D. revenue and protective.
Q:
(p. 62) There are many examples of absolute advantage in global markets.
Q:
(p. 75) ______________ is the economic theory advocating that a nation should try to sell more goods to other nations than it buys from them.
A. Capitalism
B. Comparative advantage
C. Mercantilism
D. Inflation
Q:
(p. 62) A country has an absolute advantage if it has a monopoly in the production of a specific product or is able to produce it more efficiently than all other nations.
Q:
(p. 75) Trade protectionism:
A. always leads to a favorable balance of trade.
B. is the use of government regulations to limit the import of goods and services.
C. encourages a complete ban on the import or export of a certain product.
D. encourages dumping by foreign industries in the home country.
Q:
(p. 62) The U.S. has a comparative advantage in coffee and shoes.
Q:
(p. 75) ___________ is the use of government regulations to limit the import of goods and services.
A. Trade protectionism
B. Fiscal policy
C. Countertrade policy
D. Monetary policy
Q:
(p. 62) Comparative advantage theory states that a country should sell to other countries those products that it produces most efficiently and buy from other countries those products it cannot produce as efficiently.
Q:
(p. 75) Many countries use ________________ policies as a way to protect their domestic industries from foreign competition.
A. export limitation
B. global marketing
C. trade protectionism
D. import enhancement
Q:
(p. 62) Absolute advantage is the basis for most global trade.
Q:
(p. 73) Paula, a U.S. businessperson who closely follows international business conditions, recently read a newspaper article predicting that the value of the dollar will soon fall. If this article is correct, Paula should expect:
A. prices of imported goods to rise, and prices of U.S. goods sold overseas to rise as well.
B. prices of imported goods to rise, but prices of U.S. goods sold overseas to fall.
C. prices of imported goods to fall, and prices of U.S. goods sold overseas to fall as well.
D. prices of imported goods to fall, but prices of U.S. goods sold overseas to rise.
Q:
(p. 61) Global trade includes the exchange of art, sports, and cultural events.
Q:
(p. 73) Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of:
A. negotiated rate adjustments between the U.S. government and the World Trade Organization.
B. decisions made by the Federal Reserve Board of Governors in order to implement monetary policy.
C. fluctuations in the world price of gold.
D. changes in the supply of and/or demand for dollars in the global currency market.
Q:
(p. 61) Global trade includes the exchange of goods and services between countries.
Q:
(p. 73) Cristy, a U.S. citizen, is preparing for a trip to Europe in the near future. She read in the Wall Street Journal recently that the dollar had weakened against the euro. If this is correct, Cristy should expect:
A. to be able to buy more once she gets to Europe.
B. that her airline ticket will cost less.
C. that she will be able to stay in a better hotel than she had originally planned.
D. that she will get less for her dollars in Europe.
Q:
(p. 61) Free trade is the movement of goods and services among nations without political or economic barriers.
Q:
(p. 74) Jamaica wants to buy vehicles from Ford Motor Company in exchange for Jamaican bauxite. Ford, however, does not have a need for Jamaican bauxite, but does have a need for computer monitors. Ford may trade vehicles to Jamaica, which then trades bauxite to another country, say India, which then exchanges computer monitors with Ford. This is an example of:
A. a letter of credit arrangement.
B. global marketing.
C. multinational trading.
D. countertrade.
Q:
(p. 61) One reason countries trade with other countries is that even technologically advanced nations cannot produce all the products their people want and need.
Q:
(p. 74) A Mexican firm has agreed to trade petroleum to an American importer in return for U.S. made computers. This arrangement is an example of:
A. a letter of credit arrangement.
B. a nontariff trade.
C. arbitrage.
D. barter.
Q:
(p. 71) Workers in the nation of MTV-land prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This __________ difference between MTV-land workers and U.S. employees represents a management challenge for firms trading in the global market.
A. environmental
B. economic
C. sociocultural
D. regulatory
Q:
(p. 60) Competition in exporting is very intense.
Q:
(p. 71) Casey is typical of many U.S. businesspeople. Casey feels the U.S. culture should be the model for the rest of the world, and that the "American way" of doing things is the best. Casey is guilty of:
A. ethnic plagiarism.
B. ethnocentricity.
C. culture shock.
D. counter culture.
Q:
(p. 60) While Japan is the largest exporter in the world, the U.S. is the largest importer.
Q:
(p. 71) When touring overseas, U.S. rock groups experience different cultures. Which of the following is an example of a sociocultural force the rock groups would be exposed to?
A. transportation systems
B. exchange rates
C. electrical systems
D. attitudes
Q:
(p. 60) The United States is the largest exporter in the world.
Q:
(p. 73) Hennessy Hardware, a U.S. retailer, buys much of its inventory from Asian countries. Hennessy Hardware would benefit if the value of the dollar ________ relative to the currencies of the countries from which Hennessy imports.
A. rose
B. fell
C. remained constant
D. floated unpredictably
Q:
(p. 60) The United States is the largest importer in the world.
Q:
(p. 74) An influential foreign government official has approached your firm requesting a large sum of money. In return for this bribe, the official promises that your firm will receive preferential treatment in future government contracts. You refuse the request, explaining that the _________ Act of the United States prohibits you from making such payments.
A. Federal Trade Commission
B. Sherman Anti-trust
C. Foreign Corrupt Practices
D. Celler-Kefauver Act
Q:
(p. 60) Exporting involves the selling of products to another country.
Q:
(p. 74-75) Differences in electrical power and transportation systems can present special problems for U.S. firms when attempting to enter global markets. These represent the __________ forces that impact global business.
A. physical and environmental
B. legal and regulatory
C. economic
D. governmental
Q:
(p. 60) Importing involves the selling of products to another country.
Q:
(p. 71) Which of the following is a hurdle to be overcome in the global marketplace?
A. lack of cultural understanding
B. lack of people with the desire and ability to buy your product
C. lack of global natural resources
D. lack of market opportunities
Q:
(p. 60) There are over 6 billion potential customers in the 193 countries that make up the global market.
Q:
(p. 71) Foreigners sometimes comment on the ethnocentric attitudes of U.S. business people. This indicates that American business people:
A. follow the philosophy of "when in Rome, do as the Romans."
B. quickly accept the suggestions and ideas of others.
C. believe the American culture is superior to all others.
D. take pride in the many ethnic groups that make America a "melting pot."
Q:
(p. 74) To be successful in global markets it's often useful to contact:
A. the local Better Business Bureau.
B. local businesspeople in the host countries.
C. the local economic development board.
D. the Organization for Economic Cooperation and Development (OECD).
Q:
(p. 74) The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials to secure business contracts is the ________ Act.
A. Foreign Corrupt Practices
B. Foreign Anti-trust
C. Multinational Collusion
D. Global Good Conduct
Q:
(p. 73) ____________ occurs when a country lowers the value of its currency relative to the currency of other nations.
A. Devaluation
B. Extrapolation
C. Depreciation
D. Downward justification
Q:
(p. 73) Under the floating exchange rate system, the value of a country's currency is determined by:
A. the monetary authorities of that country.
B. the United Nations Committee on Floating Currencies.
C. the currency's supply and demand in the global market.
D. countertrading.
Q:
(p. 74) __________ is a complex form of bartering in which several countries may be involved, each trading goods for goods or services for services.
A. Venture bartering
B. Global monetarism
C. Countertrading
D. Global counterexchange
Q:
(p. 73) __________ is lowering the value of a nation's currency relative to other currencies.
A. Revaluation
B. Disevaluation
C. Devaluation
D. Negative valuation
Q:
(p. 73) When a currency is very weak the only possibility of trade is through the use of:
A. exporting.
B. bartering.
C. importing.
D. factoring.
Q:
(p. 73-74) __________ is the exchange of merchandise or services for other merchandise or services without the exchange of money.
A. Exporting
B. Bartering
C. Importing
D. Factoring
Q:
(p. 73) __________ determines the value of currency according to supply and demand determined by global currency traders.
A. The currency rate
B. The euro rate
C. The floating exchange rate
D. The trading exchange rate
Q:
(p. 73) Which of the following represents the value of one nation's currency relative to the currencies of another country?
A. euro rate
B. currency rate
C. exchange rate
D. standard of living
Q:
(p. 72) Which of the following sociocultural forces can have a significant impact on business operations?
A. religion
B. universal sales standards
C. single-phase marketing
D. global marketing
Q:
(p. 71) ____________ describes an attitude held by some American business people that the American culture is superior to all others.
A. Primary culture
B. Ethnocentricity
C. Cultural institutionalism
D. Social myopia
Q:
(p. 71) Which of the following terms describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?
A. culture
B. ethnocentricity
C. institutional society
D. social myopia
Q:
(p. 70) ExxonMobil Corporation refines and markets its petroleum products in many different nations. In addition, Exxon's stockholders and managers come from many different nations. ExxonMobil is an example of a true:
A. meganational.
B. multinational corporation.
C. joint international venture.
D. international bureaucracy.
Q:
(p. 70) Adam's Apple Corporation ships all of the apples from its orchards in Washington to a single buyer in Japan. The firm's entire profits are derived from this international transaction. Adam's Apple Corporation:
A. is an example of a multinational corporation.
B. is not a multinational corporation.
C. is contributing to the U.S. balance of trade deficit.
D. will benefit greatly from the establishment of NAFTA.
Q:
(p. 70) To provide better service for their customers, America Online purchased office space in India for their online customer service representatives. This is an example of:
A. dumping.
B. foreign direct investment.
C. a nontariff trade restriction.
D. ethnocentricity.
Q:
(p. 70) Which of the following statements is the most accurate observation regarding multinational corporations?
A. Rather than manage manufacturing and marketing facilities overseas, most multinational corporations attempt to enter global markets by exporting domestically produced goods.
B. Most multinational corporations are actually small- to medium-sized firms.
C. Because of political and economic concerns, most multinational corporations have chosen to ignore investment opportunities in China and Russia.
D. Only those firms with a physical presence in different nations qualify as multinational corporations.
Q:
(p. 70) If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a:
A. global franchise.
B. a global joint venture.
C. foreign subsidiary.
D. contract manufacturer.
Q:
(p. 69) Nike will often enter a foreign market through an agreement with a foreign firm. The agreement calls for the foreign firm to manufacture products to Nike's standards and attach the Nike name and trademark. This technique allows Nike to experiment in a new market without incurring the large start-up costs involved with building their own production facilities. This is an example of:
A. contract franchising.
B. a global joint venture.
C. global licensing.
D. contract manufacturing.