Deck 4: Competing in World Markets

Question 1

______ are foreign-made products purchased by domestic consumers.

A)Exports
B)Countertrades
C)Imports
D)Outsourcing

Answer 1

C

Question 2

A trade deficit occurs when _____.

A)imports are sold at low profits
B)foreign-aid payments exceed exports
C)imports exceed exports
D)there is a net flow of money into a country

Answer 2

C

Question 3

Which of the following statements is true regarding comparative advantage?

A)Comparative advantage is becoming rare these days.
B)Ensuring that its people are well educated is another way a nation can develop a comparative advantage in skilled human resources.
C)Developing countries possess no comparative advantage.
D)A nation must first possess an absolute advantage in a particular area before it can gain a comparative advantage.

Answer 3

B

Question 4

Although people in developing nations have lower per capita incomes than more highly developed nations,their ______represents a lucrative market for global trade.

A)technology
B)political stability
C)huge populations
D)infrastructure

Question 5

Which of these countries have a population of over a billion people each?

A)China and Russia
B)India and Russia
C)China and India
D)United States and China

Question 6

Which of the following countries has experienced the greatest annual rate of GDP growth during the past decade?

A)United States
B)China
C)Canada
D)Japan

Question 7

What does it mean when a country has a balance of payments surplus means?

A)Monetary inflow exceeds monetary outflow
B)Monetary outflow exceeds monetary inflow
C)Imports exceed exports
D)Exports exceed imports

Question 8

Even though the United States manufactures textiles,China is able to produce them more efficiently.Thus,China has a _____ in manufacturing textiles.

A)tariff
B)quota
C)trade restriction
D)comparative advantage

Question 9

An absolute advantage occurs when a country can maintain _____.

A)a monopoly by outlawing foreign imports
B)a monopoly by levying high taxes on imports
C)a monopoly by being the lowest-cost producer of a good or service
D)its advantage by producing a good or service more efficiently

Question 10

Which country leads the world in the international trade of goods and services?

A)India
B)China
C)Russia
D)The United States

Question 11

A balance of payments deficit occurs when _____.

A)the net inflow of money from abroad exceeds the net outflows of money to other countries
B)imports exceed exports
C)the net outflow of money from a country exceeds the net inflow of money from abroad
D)exports exceed imports

Question 12

U.S._____ make up about a quarter of the U.S.gross domestic product (GDP).

A)petroleum exports
B)computer technology
C)exports and imports of goods and services
D)production of consumer electronic products

Question 13

Washing machines that are manufactured in the United States and sold in Germany are categorized as U.S._____.

A)Exports
B)countertrades
C)Imports
D)Outsourcing

Question 14

________ are domestically produced goods and services sold in other countries.

A)Exports
B)Countertrades
C)Imports
D)Outsourcing

Question 15

The country of Gevalia exported products totaling $86 billion last year.During the same year,Gevalia imported products valued at $43 billion.Gevalia has a(n)_____.

A)exchange rate of 2 to 1
B)trade deficit of $43 billion
C)trade surplus of $43 billion
D)unfavorable balance of payments

Question 16

IS Systems,a U.S.company,produces computer parts and sells them to Asian countries.IS Systems is engaging in the international business activity known as _____.

A)importing
B)dumping
C)countertrade
D)exporting

Question 17

When a company operates in other countries,it _____ risk.

A)has no impact on
B)eliminates
C)controls
D)spreads out

Question 18

Florida-based WeText purchases cell phones manufactured in Taiwan and sells them in the United States.PMI is engaging in the international business activity known as _____.

A)exporting
B)importing
C)countertrade
D)dumping

Question 19

A nation can develop a _______ if it can supply its products more efficiently and at a lower price than it can supply other goods,compared with the outputs of other countries.

A)tariff
B)quota
C)trade restriction
D)comparative advantage

Question 20

The United States has a trade surplus in which of the following items?

A)Oil
B)Textiles
C)Technology products
D)Services

Question 21

________ is the most widely spoken language in the world

A)English
B)Mandarin Chinese
C)Hindi
D)Spanish

Question 22

Which of the following would result from devaluation of the U.S.dollar?

A)Foreign goods would be less expensive for American consumers.
B)Foreign companies would have to pay more to purchase U.S.assets.
C)The cost of foreign vacations for U.S.citizens would be reduced.
D)U)S.goods would sell for less abroad.

Question 23

The purpose of ______is to make imports more expensive for domestic buyers.

A)exchange controls
B)embargo
C)dumping
D)tariffs

Question 24

The country of Velvita is experiencing severe competition to its domestic auto industry in the form of foreign imports.Many jobs are threatened.Velvita places a 25 percent tariff on the price of imported cars.This type of tariff is known as a(n)_____ tariff.

A)revenue
B)quota
C)infant industry
D)protective

Question 25

Assume a nation has a comparative advantage in the production of clothing.If the value of this country's currency rises,_____.

A)its comparative advantage will decrease
B)its comparative advantage will stay the same
C)its comparative advantage will increase
D)an absolute advantage will be created

Question 26

Live Machines,Inc.,a U.S.based company,is trying to establish a supplier relationship with a parts manufacturer in a small Asian country.Alejandro,the purchasing manager,is attempting to get to know the general manager and staff of the company to help finalize the agreement.Alejandro is attempting to overcome what type of barrier?

A)Physical barrier
B)Tariff restriction
C)Exchange controls
D)Cultural barrier

Question 27

Which of the following factors affects a country's exchange rate?

A)The country's geographical position
B)The neighboring country's exchange rate
C)The country's political conditions
D)The country's population

Question 28

Samira is the Middle Eastern sales manager for a large company.She avoids giving pork products and wine to Arab customers as gifts.Samira is being sensitive to _____.

A)religious differences
B)language differences
C)differences in consumer habits
D)differences in business practices

Question 29

What is a country's exchange rate based on?

A)The rate at which its currency can be exchanged for currencies of other countries
B)The number of foreign banks it has
C)Tariffs and related trade restrictions
D)The relationship between its imports and exports

Question 30

Samantha,a U.S.citizen,travels to Australia and spends $3,500 on souvenirs and clothing.She is contributing to the _____.

A)U)S.trade surplus
B)growing exchange rate
C)U)S.balance of payments surplus
D)U)S.balance of payments deficit

Question 31

Regarding hard currencies,which of the following statements is true?

A)Countries with hard currency typically use the barter system when exporting goods.
B)The U.S.dollar is an example of hard currency,which is easily converted into other currencies.
C)Hard currency is difficult to convert into other currency.
D)A country with hard currency is likely to have a trade deficit.

Question 32

Which of the following does NOT constitute a country's infrastructure?

A)Political climate
B)Communication
C)Energy facilities
D)Transportation

Question 33

The Foreign Corrupt Practices Act:

A)forbids U.S.companies from bribing foreign officials,political candidates,or government representatives.
B)funds projects that build or expand a nation's infrastructure.
C)mediates trade disputes among trade agreement member nations.
D)promotes trade through financial cooperation.

Question 34

A Japanese insurance company purchases U.S.government securities.From the perspective of the United States,the balance of trade with Japan will _____ and the balance of payments with Japan will _____.

A)not change,improve
B)not change,get worse
C)improve,improve
D)Improve,get worse

Question 35

______ describes a drop in a currency's value relative to other currencies or to a fixed standard.

A)Exporting
B)Importing
C)Devaluation
D)Countertrade

Question 36

A country has a good chance of selling more of its goods abroad if it _____.

A)increases the value of its currency
B)more tourists decide to travel abroad
C)devalues its currency
D)sets high tariffs on imported goods

Question 37

All of the following are social and cultural barriers EXCEPT _____.

A)language
B)currency shifts
C)religious attitudes
D)gift-giving traditions

Question 38

To overcome which of the international trade barriers,an understanding of religious holidays is essential?

A)Political
B)Physical
C)Cultural
D)Legal

Question 39

Patents,trademarks,and intellectual property are important concerns in the _______environment.

A)economic
B)political
C)cultural
D)legal

Question 40

Why does Mexico appeal to U.S.and foreign car makers?

A)Low demand for cars in South America
B)Lower wages
C)Its distance from the largest auto market in the world
D)Easy availability of qualified engineers

Question 41

A German-made household appliance is popular and is highly competitive with the same product manufactured here in the USA.To give the domestic industry a better chance to operate profitably,the government restricts the number of these appliances that can be imported by applying a(n)_____.

A)quota
B)embargo
C)protective tariff
D)revenue tariff

Question 42

If a foreign company offers steel in the United States below the company's cost of production,the company might be accused of _____.

A)protective tariffs
B)dumping
C)a managed trade agreement
D)quota

Question 43

Sunil,CEO of Chem Globe International (CGI),has recognized the financial opportunities in China.Sunil has hired a foreign freight forwarder to coordinate selling CGI's products outside the United States.CGI is now involved in _____.

A)overseas marketing
B)international production
C)direct exporting
D)foreign licensing

Question 44

Samira spent a two-week vacation in Italy and purchased more than $1,000 worth of Venetian glass.Upon returning to the United States,she was required to pay a _____ on the items.

A)protective tariff
B)revenue tariff
C)service tax
D)exchange rate tax

Question 45

The objective of quotas is to _____.

A)prevent dumping
B)raise revenue for the government
C)ban the importation of certain goods
D)protect domestic industries

Question 46

ABC International,a Canadian software company that specializes in developing computer games enters into an agreement with XYZ Software,a Japanese software company.Under this agreement,XYZ has the right to manufacture and sell the ABC's games in Japan.This agreement is an example of _____.

A)countertrade
B)foreign licensing
C)international production
D)direct exporting

Question 47

One effect of the North American Free Trade Agreement (NAFTA)is:

A)an increase in trade among the NAFTA member nations
B)an increase in the number of low-wage jobs in the United States
C)a decrease in trade among NAFTA member nations
D)an increase in trade restrictions among the member nations

Question 48

In order to regulate international commerce,the United States has entered into friendship,_____,and navigation (FCN)treaties with other nations.

A)capital planning
B)contract
C)commerce
D)creative strategy

Question 49

Decisions made by the _______regarding trade disputes are binding on the parties involved.

A)North American Free Trade Agreement (NAFTA)
B)International Monetary Fund (IMF)
C)World Trade Organization
D)General Agreement on Tariffs and Trade (GATT)

Question 50

Dumping _____domestic consumers and _____domestic producers in an importing market.

A)harms,benefits
B)harms,harms
C)benefits,harms
D)benefits,benefits

Question 51

Pushpa works for an American beverage company that is entering new global markets.She has been sent to Japan to oversee the launch of the company's products in the country.Which of the following should she pay more attention to while managing the launch?

A)Translating words in the slogan and other associated phrases in a way that they convey the intended meaning
B)Choosing indigenous actors in the commercials for the products
C)Modifying the product to suit the taste preferences of the local population
D)Following local business customs and traditions

Question 52

ABC,a less-developed nation is facing a financial crisis due to the rapid devaluation of its currency.Which of the following might aid this country?

A)International Monetary Fund
B)World Bank
C)United Nations
D)World Trade Organization

Question 53

Which of these limit the amounts of particular products that countries can import during specified time periods?

A)Exchange controls devaluation
B)Embargo
C)Quotas
D)Foreign trade zone

Question 54

A country's department of trade and commerce decides to regulate imports from a neighboring country in order to curb the exit of large amounts of domestic capital.This is an example of a(n)_____.

A)embargo
B)exchange control
C)quota
D)protective tariff

Question 55

Marco has to make a deal with a Chinese company.When he is in China,he learns that it is customary to spend money getting to know the other businessmen and building trust.If he participates in this custom,which of the following is he violating?

A)The General Agreement on Tariffs and Trade (GATT)
B)The Foreign Corrupt Practices Act
C)The North American Free Trade Agreement (NAFTA)
D)The Foreign Licensing Agreement

Question 56

Taxes,surcharges,or duties on foreign products are referred to as _________.

A)exchange controls
B)embargo
C)dumping
D)tariffs

Question 57

A country raises the tariff on imported beef in order to increase its price above the price of domestically produced beef.This is an example of _____.

A)an exchange control
B)a quota
C)a protective tariff
D)dumping

Question 58

The European Union (EU)_____.

A)recently became part of the North American Free Trade Agreement
B)wants to introduce European citizenship as a complement to national citizenship
C)made trade with the United States more difficult
D)introduced the euro to coincide with each country's own currency

Question 59

A U.S.agricultural producer sells wheat to a small country in Africa.The country pays the U.S.company in seafood.This is an example of _____.

A)countertrade
B)direct exporting
C)foreign licensing
D)international production

Question 60

ABC,a less-developed country,wants to build new port facilities,which will allow it to increase agricultural exports.Financing for this project could come from the _____.

A)International Monetary Fund
B)World Trade Organization
C)World Bank
D)United Nations

Question 61

A country can still have an absolute advantage even if it cannot maintain a monopoly from producing a certain good.

Question 62

Less-developed countries represent a lucrative market for U.S.companies because of their huge population.

Question 63

International trade is vital to a country and its businesses because it enhances economic growth by providing a market for its products and access to needed resources.

Question 64

Vvey Inc.,a pet accessories manufacturer,exports large quantities of its products to the United States and sells them at lower prices than it charges in its home market.Vvey Inc.could be accused of _____.

A)exporting
B)embargo
C)dumping
D)quota

Question 65

The country of Shampur has imposed a quantitative restriction on the number of luxury automobiles imported in a year.What type of trade restriction has Shampur used?

A)Quota
B)Embargo
C)Protective tariff
D)Revenue tariff

Question 66

Selling domestically produced goods and services in foreign countries refers to importing.

Question 67

Argonia imposes a total ban on importing sugar from Paldia.What type of trade restrictions has Argonia used?

A)Quota
B)Embargo
C)Protective tariff
D)Revenue tariff

Question 68

People in developing nations have higher per-capita incomes than people in developed nations.

Question 69

Gross domestic product (GDP)growth in the United States is higher than GDP growth in any other country.

Question 70

Speedy Motors is merging its individual operations into one so that it can offer a standardized product.It also plans to sell the product in essentially the same manner throughout the world.This strategy can best be described as a(n)_____.

A)international marketing strategy
B)orderly marketing strategy
C)global business strategy
D)multidomestic strategy

Question 71

An American company that makes plastic garden furniture wants to market its products in a foreign country that has a high tariff barrier against imported plastic goods.One way the company can get around this problem is to _____.

A)hire an export management team
B)violate the Foreign Corrupt Practices Act
C)enter into a licensing agreement with companies within the foreign country to produce the furniture there
D)submit a complaint to the U.S.Department of Commerce

Question 72

The country of ABC sells mining equipment to the country of XYZ in return for cigars.This is an example of _____.

A)countertrade
B)direct exporting
C)foreign licensing
D)international production

Question 73

How do export trading companies earn profits?

A)They charge a revenue tariff on the goods.
B)They ensure that no other export trading company deals in the same goods.
C)They buy competitively priced local goods and sell them at a higher price abroad.
D)They earn incentives from the government to increase exports.

Question 74

The Coca-Cola Company designs its ads around the world to emphasize a common theme.These ads are modified only slightly for local markets.Coca-Cola is using which of the following strategies in its international operations?

A)Global business strategy
B)Host country strategy
C)Uniform pricing strategy
D)Multidomestic strategy

Question 75

Baby Toys,Inc.(BTI)enters into a contract with a foreign company to produce and distribute its products in a specific geographic area.BTI is involved in _____.

A)foreign licensing
B)countertrade
C)international production
D)direct exporting

Question 76

Maverick's company helps the exporters of electronic items in his country to complete paperwork and comply with local laws about product labeling and performance testing.According to the information given in this scenario,Maverick most likely works for a(n)_____.

A)export management company
B)export trading company
C)local electronics vendor
D)shipping company

Question 77

Film distributors sometimes change movie titles when marketing overseas due to language or slang barriers.Studios usually allow modification of its product as part of a _____ strategy.

A)Multinational
B)global business
C)multidomestic business
D)Uniform

Question 78

According to the Word Bank,a country's comparative advantage is measured only in manufactured goods.

Question 79

Due to its highly educated workforce and low labor costs,India has a comparative advantage in software development.

Question 80

A U.S.clothing manufacturer allows an overseas producer to use its designs and specifications to make clothes.This is an example of _____.

A)countertrade
B)direct exporting
C)foreign licensing
D)subcontracting