Question 1

The land of Narnack has very infertile soil but a large supply of oil. What action should Narnack take? Narnack should

Accepted Answer

A)  specialize in the production of crude oil and trade this for grain and other food products. 
B)  grow food anyway because its people will need it for survival. 
C)  focus on attracting tourists to its country and thus purchase the needed supplies of food. 
D)  specialize in the production of food products such as cereals and bread. 
E)  import oil to satisfy the country's need for gasoline. 
A)  specialize in the production of crude oil and trade this for grain and other food products. 
B)  grow food anyway because its people will need it for survival. 
C)  focus on attracting tourists to its country and thus purchase the needed supplies of food. 
D)  specialize in the production of food products such as cereals and bread. 
E)  import oil to satisfy the country's need for gasoline.

Question 2

What are the most frequently cited reasons for restricting trade? How valid are these reasons? Explain.

Accepted Answer

The most frequently cited reasons for re

Question 3

Define tariff. What effect does a tariff have on the price of a product in the country imposing the tariff? Why would a tariff be used?

Accepted Answer

A tariff is a tax imposed by a governmen

Question 4

Which of the following is a potential drawback of licensing?

Accepted Answer

A)  If quality is compromised, it may reflect poorly on the company providing the license. 
B)  Licensing will provide the original producer with much foreign marketing experience. 
C)  It is a relatively inexpensive way to market your product internationally. 
D)  It is an extremely expensive and highly involved method of international expansion. 
E)  It provides no compensation for the original company. 
A)  If quality is compromised, it may reflect poorly on the company providing the license. 
B)  Licensing will provide the original producer with much foreign marketing experience. 
C)  It is a relatively inexpensive way to market your product internationally. 
D)  It is an extremely expensive and highly involved method of international expansion. 
E)  It provides no compensation for the original company.

Question 5

The United States bans Cuban cigars and other Cuban products from entering the United States due to political difficulties. This action is called a(n)

Accepted Answer

A)  embargo. 
B)  import quota. 
C)  trade ban. 
D)  foreign-exchange control. 
E)  import duty. 
A)  embargo. 
B)  import quota. 
C)  trade ban. 
D)  foreign-exchange control. 
E)  import duty.

Question 6

Despite trade restrictions, international business is

Accepted Answer

A)  moving slowly. 
B)  increasing. 
C)  slowing down. 
D)  struggling for survival. 
E)  decreasing. 
A)  moving slowly. 
B)  increasing. 
C)  slowing down. 
D)  struggling for survival. 
E)  decreasing.

Question 7

Landing Service
Landing Service is a lawn furniture company that has been around for many years. It is known for its ability to produce furniture more efficiently than any other company in the nation. In truth, no other companies in any other nation come close. Landing Service has shipped many of its products internationally. In fact, 80 percent of its profits come from international sales. However, the Italian government has imposed a tax on imported furniture items to protect local companies. The Brazilian government, on the other hand, has imposed taxes on Landing Service products due to the government wanting a piece of the pie.
Landing Service initially thought that these taxes were unfair because it was being singled out. However, after Landing Service contacted the organization that had the power to mediate this situation, the furniture company realized that the taxation it was subjected to was legal and that there was nothing it could do about it.
-Refer to Landing Service. What type of tax has the Italian government imposed on the company?

Accepted Answer

A)  Export duty 
B)  Embargo 
C)  Revenue tariff 
D)  Protective tariff 
E)  Nontariff barrier 
A)  Export duty 
B)  Embargo 
C)  Revenue tariff 
D)  Protective tariff 
E)  Nontariff barrier

Question 8

___ was an original member of MERCOSUR.

Accepted Answer

A)  Ecuador 
B)  Bolivia 
C)  Nicaragua 
D)  Chile 
E)  Argentina 
A)  Ecuador 
B)  Bolivia 
C)  Nicaragua 
D)  Chile 
E)  Argentina

Question 9

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture. The company currently operates in the United States but wishes to expand overseas. The company managers have been contemplating the best way to enter the foreign market. At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty. The managers recognized, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market. As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.
After all the research was completed, the senior managers realized that they wanted to export their product. The managers decided that the transport carrier would notify them when the merchandise was shipped. This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
-Refer to Lynn Bernerd, Inc. Which of the following alternatives could have worked as a link between the managers at Lynn Bernerd, Inc. and the buyer from a different country?

Accepted Answer

A)  International barter 
B)  Counter trade 
C)  Trading company 
D)  Comparative trader 
E)  Foreign-exchange control 
A)  International barter 
B)  Counter trade 
C)  Trading company 
D)  Comparative trader 
E)  Foreign-exchange control

Question 10

The TPP was created in 2011 to do all of the following except

Accepted Answer

A)  lower barriers to trade. 
B)  market products jointly. 
C)  increase exports. 
D)  boost economies of member countries. 
E)  lower investment barriers. 
A)  lower barriers to trade. 
B)  market products jointly. 
C)  increase exports. 
D)  boost economies of member countries. 
E)  lower investment barriers.

Question 11

Globalization represents a huge opportunity for

Accepted Answer

A)  all countries―rich or poor. 
B)  the United States. 
C)  Japan. 
D)  China. 
E)  Asia. 
A)  all countries―rich or poor. 
B)  the United States. 
C)  Japan. 
D)  China. 
E)  Asia.

Question 12

When a country's currency is devalued, this ____ the cost of foreign goods and ____ the cost of domestic goods to foreign firms.

Accepted Answer

A)  increases; decreases 
B)  reduces; reduces 
C)  decreases; increases 
D)  neutralizes; raises 
E)  neutralizes; decreases 
A)  increases; decreases 
B)  reduces; reduces 
C)  decreases; increases 
D)  neutralizes; raises 
E)  neutralizes; decreases

Question 13

The World Bank is an example of a(n) ____, supported by industrialized nations, including the United States.

Accepted Answer

A)  Ex-Im Bank 
B)  IMF 
C)  MDB 
D)  regional bank 
E)  European bank 
A)  Ex-Im Bank 
B)  IMF 
C)  MDB 
D)  regional bank 
E)  European bank

Question 14

Landing Service
Landing Service is a lawn furniture company that has been around for many years. It is known for its ability to produce furniture more efficiently than any other company in the nation. In truth, no other companies in any other nation come close. Landing Service has shipped many of its products internationally. In fact, 80 percent of its profits come from international sales. However, the Italian government has imposed a tax on imported furniture items to protect local companies. The Brazilian government, on the other hand, has imposed taxes on Landing Service products due to the government wanting a piece of the pie.
Landing Service initially thought that these taxes were unfair because it was being singled out. However, after Landing Service contacted the organization that had the power to mediate this situation, the furniture company realized that the taxation it was subjected to was legal and that there was nothing it could do about it.
-Refer to Landing Service. The Landing Service does mostly

Accepted Answer

A)  mediating. 
B)  domestic sales. 
C)  importing. 
D)  exporting. 
E)  currency devaluation. 
A)  mediating. 
B)  domestic sales. 
C)  importing. 
D)  exporting. 
E)  currency devaluation.

Question 15

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture. The company currently operates in the United States but wishes to expand overseas. The company managers have been contemplating the best way to enter the foreign market. At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty. The managers recognized, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market. As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.
After all the research was completed, the senior managers realized that they wanted to export their product. The managers decided that the transport carrier would notify them when the merchandise was shipped. This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
-Refer to Lynn Bernerd, Inc. Which of the following options is not one of the steps needed for entering an international market?

Accepted Answer

A)  Contact local government to see if taxes on trade can be waived. 
B)  Establish an overseas distribution network. 
C)  Set export prices and payment terms, methods, and techniques. 
D)  Identify key foreign markets for the product. 
E)  Identify exportable products. 
A)  Contact local government to see if taxes on trade can be waived. 
B)  Establish an overseas distribution network. 
C)  Set export prices and payment terms, methods, and techniques. 
D)  Identify key foreign markets for the product. 
E)  Identify exportable products.

Question 16

What was the General Agreement on Tariffs and Trade (GATT)? What was its primary objective?

Accepted Answer

The General Agreement on Tariffs and Tra

Question 17

Companies such as ExxonMobil and Mitsubishi operate on a worldwide scale with weakening ties to any single country. These are examples of

Accepted Answer

A)  members of the Dow Jones Industrial Average. 
B)  global trading companies. 
C)  internationally owned facilities. 
D)  multinational enterprises. 
E)  foreign-domestic corporations. 
A)  members of the Dow Jones Industrial Average. 
B)  global trading companies. 
C)  internationally owned facilities. 
D)  multinational enterprises. 
E)  foreign-domestic corporations.

Question 18

The United States wants to limit the amount of dollars that another country can obtain. The best way to accomplish this is to

Accepted Answer

A)  impose an import duty. 
B)  establish a foreign-exchange control. 
C)  declare an embargo. 
D)  set an import quota. 
E)  impose an export duty. 
A)  impose an import duty. 
B)  establish a foreign-exchange control. 
C)  declare an embargo. 
D)  set an import quota. 
E)  impose an export duty.

Question 19

When was GATT first established?

Accepted Answer

A)  At the turn of the twentieth century 
B)  Following World War I 
C)  At the end of World War II 
D)  During the Great Depression 
E)  In the early 1960s 
A)  At the turn of the twentieth century 
B)  Following World War I 
C)  At the end of World War II 
D)  During the Great Depression 
E)  In the early 1960s

Question 20

Suppose France imposes a tax on agricultural products from the United States to help its own farmers. This describes a(n)

Accepted Answer

A)  revenue tariff. 
B)  preservation tariff. 
C)  embargo. 
D)  nontariff barrier. 
E)  protective tariff. 
A)  revenue tariff. 
B)  preservation tariff. 
C)  embargo. 
D)  nontariff barrier. 
E)  protective tariff.

The land of Narnack has very infertile soil but a large supply of oil. What action should Narnack take? Narnack should

What are the most frequently cited reasons for restricting trade? How valid are these reasons? Explain.

Define tariff. What effect does a tariff have on the price of a product in the country imposing the tariff? Why would a tariff be used?

Which of the following is a potential drawback of licensing?

The United States bans Cuban cigars and other Cuban products from entering the United States due to political difficulties. This action is called a(n)

Despite trade restrictions, international business is

___ was an original member of MERCOSUR.

The TPP was created in 2011 to do all of the following except

Globalization represents a huge opportunity for

When a country's currency is devalued, this the cost of foreign goods and the cost of domestic goods to foreign firms.

The World Bank is an example of a(n) ____, supported by industrialized nations, including the United States.

What was the General Agreement on Tariffs and Trade (GATT)? What was its primary objective?

Companies such as ExxonMobil and Mitsubishi operate on a worldwide scale with weakening ties to any single country. These are examples of

The United States wants to limit the amount of dollars that another country can obtain. The best way to accomplish this is to

When was GATT first established?

Suppose France imposes a tax on agricultural products from the United States to help its own farmers. This describes a(n)

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

Filters

Exam 3: A: Exploring Global Business

The land of Narnack has very infertile soil but a large supply of oil. What action should Narnack take? Narnack should

What are the most frequently cited reasons for restricting trade? How valid are these reasons? Explain.

Define tariff. What effect does a tariff have on the price of a product in the country imposing the tariff? Why would a tariff be used?

Which of the following is a potential drawback of licensing?

The United States bans Cuban cigars and other Cuban products from entering the United States due to political difficulties. This action is called a(n)

Despite trade restrictions, international business is

___ was an original member of MERCOSUR.

The TPP was created in 2011 to do all of the following except

Globalization represents a huge opportunity for

When a country's currency is devalued, this ____ the cost of foreign goods and ____ the cost of domestic goods to foreign firms.

The World Bank is an example of a(n) ____, supported by industrialized nations, including the United States.

What was the General Agreement on Tariffs and Trade (GATT)? What was its primary objective?

Companies such as ExxonMobil and Mitsubishi operate on a worldwide scale with weakening ties to any single country. These are examples of

The United States wants to limit the amount of dollars that another country can obtain. The best way to accomplish this is to

When was GATT first established?

Suppose France imposes a tax on agricultural products from the United States to help its own farmers. This describes a(n)

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

Filters

When a country's currency is devalued, this the cost of foreign goods and the cost of domestic goods to foreign firms.