Exam 5: The Global Context of Business

Explain how fluctuations in exchange rates influence the balance of trade.

The concept of absolute advantage focuses on cross-country comparisons, while the concept of relative advantage focuses more on the situation within a given country.

Which of the following types of payments are usually received by an exporter as an ongoing payment calculated as a percentage of the license holder's sales? Quantity discounts Royalties Agent fees Direct investments Flat fees

BBX represents several firms at once and usually does not specialize in a particular product or market. It is a(n) independent agent. royalty company. licensing company. branch office. strategic alliance.

As the value of a country's currency falls, its balance of trade should decline. remain the same. improve. either increase or decrease. none of these.

Which of the following best explains why a nation exports specific products and services? Whether the nation has international companies Whether a nation has a trade surplus Whether a nation has an absolute advantage Whether a nation has a balance of trade The level of the country's GNP

Strategic alliances have declined somewhat in recent years because foreign governments have put up more and more bureaucratic barriers to foreign ownership.

Laura's Lights began shipping products to its new partner in a foreign nation only to find out that before the products would be let into the country a tax of $1.00 per unit had to be paid. This tax is known as a(n) subsidy. local content law. quota. embargo. tariff.

Exports are services that are created in Canada and sold abroad. goods and services that are made or grown abroad and sold in Canada. products that are made or grown in Canada and sold abroad; services cannot be exported. goods and services that are made or grown in Canada and sold abroad. products that are made or grown abroad and sold in Canada; services cannot be exported.

Fembooks Bookstore sells books only over the internet. It has established an excellent reputation for finding out-of-print and hard-to-find books of interest to women. The CEO of Fembooks is considering going global with the business, since it is already established on the internet. Which of the following statements, if true, would support the president's argument for the global expansion of Fembooks through the internet? Payment preferences vary from country to country. Europeans prefer using debit cards over using credit cards due to the high rate of credit card theft. Demographic targeting is more easily accomplished on the internet than in other forms of advertising. The exchange rate for different currencies can be an issue for global businesses. The use of local currency may increase rates of purchase, but presents challenges for exchange and shipping. Advertising and sales laws (and accompanying taxes) vary from country to country. Local import and export laws would need to be researched and followed.

The Canadian government imposed a 34.6 percent tariff on barbecues made in China because complaints were received that Chinese companies were unfairly subsidizing the production of barbecues. This was an example of a revenue tariff. a protectionist tariff. a quota. an embargo. none of these.

In assessing a country's national competitive advantage, what is meant by "factor conditions"?

The total volume of world trade is about $800 billion.

Tariffs that are imposed strictly to raise money for the government are referred to as ________ tariffs. quota revenue protectionist union subsidy

Which of the following companies may not find it profitable to go international? A mining company A company that buys and sells fresh produce and fish A manufacturing firm specializing in bicycles A financial investment firm A newsprint company

According to the World Bank, ______ are high-income countries, while ______ are upper middle income countries. Australia, Japan, and Israel; China, Argentina, and South Africa China, Columbia, and Lebanon; Armenia, Guatemala, and Vietnam Argentina and South Africa; Columbia, Lebanon, and Turkey Columbia, Lebanon, and Turkey; Australia, Japan, South Korea; Canada, the United States, and most countries in Europe; Kuwait, the United Arab Emirates and Oman.

When a country imports more than it exports, it has a favourable balance of trade.

The Transparency International "Corruption Perceptions Index" showed that the least corrupt countries are ________, and the most corrupt countries are _______________. Denmark, Finland, and New Zealand; North Korea, Afghanistan, and Somalia Iceland, Denmark, and New Zealand; Haiti, Myanmar, and Somalia Canada, the U.S., and New Zealand; Myanmar, Chad, and Russia Denmark, New Zealand, and Singapore; Myanmar, Afghanistan, and Somalia Ireland, the U.S., and Canada; Zambia, Libya, and Chad

A firm that conducts a significant portion of its business abroad, that has some facilities overseas, and that imports a significant portion of goods from other countries is best described as an importer. an international firm. mininational. an exporter. a multinational firm.

If the Canadian dollar becomes stronger in relation to the Japanese yen, the prices of all Canadian-made products would rise in Japan and the prices of all Japanese-made products would fall in Canada. there would be no effect on the prices of Canadian-made products sold in Japan. the prices of all Canadian-made products would fall in Japan and the prices of all Japanese-made products would rise in Canada. the prices of all Canadian-made products would fall in Japan and the prices of all Japanese-made products would fall in Canada. the prices of all Canadian-made products would rise in Japan and the prices of all Japanese-made products would rise in Canada.