Question 1

Trade restrictions usually have no immediate or long-term economic consequences.

Accepted Answer

A) True 
 B)False

Question 2

____ is the exportation of large quantities of a product at a price lower than that of the same product in the home market.

Accepted Answer

A)  Embargo 
B)  Duty 
C)  Dumping 
D)  Export quota 
E)  Dropping

Question 3

Which of the following best compares licensing and exporting as tools for entering foreign markets?

Accepted Answer

A)  Licensing and exporting are both low-risk methods, but licensing is not as simple as exporting. 
B)  Licensing is riskier and more complicated than exporting. 
C)  Exporting is much riskier and more complicated than licensing. 
D)  Licensing and exporting are both low-risk, but exporting is more complicated. 
E)  Licensing and exporting are both complicated and expensive methods.

Question 4

When the UK levies a tax on textiles from India, this tax is a type of

Accepted Answer

A)  export duty. 
B)  barter. 
C)  import. 
D)  tariff. 
E)  responsibility.

Question 5

Suppose Gillette is seeking a manufacturer in Bangladesh that will produce and market Gillette razors in that country.Gillette expects a royalty from its partner in Bangladesh.Which arrangement will be the best choice for Gillette?

Accepted Answer

A)  Export/import merchant agreement 
B)  Export/import agent agreement 
C)  Joint venture 
D)  Licensing 
E)  Multinational agreement

Question 6

Countertrade is losing its importance in international trade.

Accepted Answer

A) True 
 B)False

Question 7

Any measure imposed by a government to favour domestic products over foreign products not involving taxes is a(n)

Accepted Answer

A)  import duty. 
B)  nonmonetary restriction. 
C)  embargo. 
D)  restriction of trade. 
E)  nontariff barrier.

Question 8

Purchasing products or materials in other nations and bringing them into one's own country is

Accepted Answer

A)  trading. 
B)  balancing. 
C)  exporting. 
D)  importing. 
E)  dumping.

Question 9

Which of the following is false concerning the International Monetary Fund?

Accepted Answer

A)  It has more than 150 member nations. 
B)  It makes short-term loans to developing countries. 
C)  Its loans are primarily to fund international trade. 
D)  Its loans to developing countries are interest free. 
E)  It is an international bank.

Question 10

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)  neutralises; raises 
E)  neutralises; decreases

Question 11

All of the following are ways to export a product to a foreign market except

Accepted Answer

A)  using an export-import merchant. 
B)  using an export-import agent. 
C)  establishing a foreign sales office. 
D)  establishing a foreign sales branch. 
E)  establishing a U.K.sales office.

Question 12

Devaluation increases the cost of foreign goods, while it decreases the cost of domestic goods to foreign firms.

Accepted Answer

A) True 
 B)False

Question 13

Howard believes that there should be no trade restrictions for any reason.What effect would Howard say that trade restrictions have on prices?

Accepted Answer

A)  He would argue that by encouraging competition with trade restrictions, prices are likely to decrease. 
B)  He would argue that restrictions would cause greater competition and therefore lead to higher prices. 
C)  He would say that trade restrictions have no impact on prices, but they do restrict consumers' choices. 
D)  He would say that restrictions reduce competition and therefore cause an increase in prices. 
E)  He would argue that trade restrictions increase prices because they break up domestic monopolies.

Question 14

If the United States exports $100 worth of timber to Nigeria and imports $80 worth of diamonds, the United States has a(n)

Accepted Answer

A)  unfavourable balance of trade. 
B)  trade deficit. 
C)  trade surplus. 
D)  negative cash flow. 
E)  export slide.

Question 15

Soccer to the Masses is interested in global expansion but does not want to make a large financial commitment.Therefore, it decides to allow a Japanese company to manufacture and distribute products under the Soccer to the Masses name.This is a(n) ____ agreement.

Accepted Answer

A)  Exporting 
B)  strategic alliance 
C)  Licencing 
D)  Countertrade 
E)  bill of lading

Question 16

A restriction on the amount of a particular foreign product that can be purchased or sold is called a foreign-exchange control.

Accepted Answer

A) True 
 B)False

Question 17

If the U.K government will not allow meat from another country to be marketed in the UK, it is imposing a(n)

Accepted Answer

A)  quota. 
B)  devaluation. 
C)  tariff. 
D)  duty. 
E)  embargo.

Question 18

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture.The company 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 recognised, 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 realised 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 agency should the managers at Lynn Bernerd, Inc.seek assistance from?

Accepted Answer

A)  GATT 
B)  Trade Information Centre 
C)  World Trade Organisation 
D)  U.S.Export Assistance Centres 
E)  U.S.and Foreign Commercial Services

Question 19

Selling and shipping raw materials or products to other nations is known as exporting.

Accepted Answer

A) True 
 B)False

Question 20

One example of an economic community is the organisation started by France, Germany, Belgium, Italy, the Netherlands, and Luxembourg.This organisation is known as the

Accepted Answer

A)  General Agreement on Tariffs and Trade. 
B)  European Economic Area. 
C)  European Free Trade Agreement. 
D)  European Union. 
E)  Euro Economic Alliance.

Exam 3: Global Business

Trade restrictions usually have no immediate or long-term economic consequences.

____ is the exportation of large quantities of a product at a price lower than that of the same product in the home market.

Which of the following best compares licensing and exporting as tools for entering foreign markets?

When the UK levies a tax on textiles from India, this tax is a type of

Suppose Gillette is seeking a manufacturer in Bangladesh that will produce and market Gillette razors in that country.Gillette expects a royalty from its partner in Bangladesh.Which arrangement will be the best choice for Gillette?

Countertrade is losing its importance in international trade.

Any measure imposed by a government to favour domestic products over foreign products not involving taxes is a(n)

Purchasing products or materials in other nations and bringing them into one's own country is

Which of the following is false concerning the International Monetary Fund?

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

All of the following are ways to export a product to a foreign market except

Devaluation increases the cost of foreign goods, while it decreases the cost of domestic goods to foreign firms.

Howard believes that there should be no trade restrictions for any reason.What effect would Howard say that trade restrictions have on prices?

If the United States exports $100 worth of timber to Nigeria and imports $80 worth of diamonds, the United States has a(n)

Soccer to the Masses is interested in global expansion but does not want to make a large financial commitment.Therefore, it decides to allow a Japanese company to manufacture and distribute products under the Soccer to the Masses name.This is a(n) ____ agreement.

A restriction on the amount of a particular foreign product that can be purchased or sold is called a foreign-exchange control.

If the U.K government will not allow meat from another country to be marketed in the UK, it is imposing a(n)

Selling and shipping raw materials or products to other nations is known as exporting.

One example of an economic community is the organisation started by France, Germany, Belgium, Italy, the Netherlands, and Luxembourg.This organisation is known as the