Deck 4: Competing in World Markets

Question 1

The ________ was created to promote trade through financial cooperation and eliminate barriers by making short-term loans to member nations.

A) World Bank
B) International Bank
C) International Monetary Fund
D) Global Assistance Fund

Answer 1

C

Question 2

A country has a(n) ___________ in making a product for which it can maintain a monopoly or that it can produce at a lower cost than any competitor.

A) Trade surplus
B) Trade deficit
C) Absolute advantage
D) Comparative advantage

Answer 2

C

Question 3

One example of a free-trade area that is enacted by the United States, Canada, and Mexico is called

A) Gross Domestic Product.
B) North American Free Trade Agreement.
C) Central America-Dominican Republic Free Trade Agreement.
D) European Union.

Answer 3

B

Question 4

Before deciding to go global, a company must make many key decisions. Which of the following is not a key decision?

A) Which foreign market(s) to enter
B) The costs of entering a new market
C) Where the product should be produced
D) The best way to organize the overseas operations

Question 5

In the last decade, many large-scale companies have moved production processes of their products to smaller nations. Many business leaders have chosen to do so as a result of the low production and operation costs in less industrialized areas. This is an example of:

A) Subcontracting
B) A global business strategy
C) Outsourcing
D) Offshoring

Question 6

A plan to develop and market products to serve different needs and tastes in separate national markets is called _________________.

A) Global business strategy
B) Multidomestic business strategy
C) International business strategy
D) Foreign business strategy

Question 7

The automobiles that Canadian manufacturers sell in the United States are ______________, whereas the metals purchased from foreign countries in order to manufacture the automobiles are _______________.

A) Imports, exports
B) Products, materials
C) Sales, investments
D) Exports, imports

Question 8

When a country exports more than it imports, it results in a:

A) Balance of trade
B) Trade deficit
C) Trade surplus
D) Comparative advantage

Question 9

Why are less developed countries attractive to North American businesses?

A) Their GDP is the same as Canada and the United States.
B) Their per capita incomes are the same as those in Canada and the United States.
C) Businesses want to benefit from local sales as a result of expanding economies and rising standards of living in less developed countries.
D) Businesses can earn higher profits in less developed countries.

Question 10

Which one of the following is not a part of a country's infrastructure:

A) Economic measures
B) Telecommunications
C) Power plants
D) Transportation systems

Question 11

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

A) Tariffs.
B) Seeding.
C) Quotas.
D) Dumping.

Question 12

Which one of the following is not an organization that promotes international trade?

A) WTO
B) IMF
C) IEC
D) World Bank

Question 13

________ occurs when there is a drop in a currency's value relative to other currencies or a fixed standard.

A) Exchange rate
B) Payment deficit
C) Imbalance of payments
D) Devaluation

Question 14

Which of the following is not a trade restriction?

A) Quotes
B) Embargoes
C) Tariffs
D) Exchange rates