Question 1

An important and practical issue for domestic firms dealing with foreign customers is securing payment.

Accepted Answer

A) True 
 B)False

Question 2

A medium-sized hardware manufacturer wants to become deeply involved in exporting, but it does not yet wish to actually manufacture any of its products overseas.The company wants to maintain control over its sales while gaining experience in foreign markets.Which option would be best for this company?

Accepted Answer

A)  Licensing its products for sale in foreign countries 
B)  Selling its products outright to an export/import merchant 
C)  Establishing its own sales offices in foreign countries 
D)  Developing totally owned facilities in a foreign market 
E)  Hiring an export/import agent to assist with foreign sales

Question 3

The International Trade Administration (ITA) offers assistance and information to help exporters.

Accepted Answer

A) True 
 B)False

Question 4

Selling and shipping raw materials or products to other nations is called

Accepted Answer

A)  exporting. 
B)  alien trading. 
C)  importing. 
D)  tariffing. 
E)  deficit trading.

Question 5

Which of the following countries is not part of CAFTA?

Accepted Answer

A)  Guatemala 
B)  Honduras 
C)  Nicaragua 
D)  Mexico 
E)  El Salvador

Question 6

___ was an original member of MERCOSUR.

Accepted Answer

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

Question 7

Countertrade is an international barter transaction in which

Accepted Answer

A)  goods and services are exchanged for different goods and services. 
B)  one company sells goods and services under the counter. 
C)  the buyers and sellers trade illegally. 
D)  one company manufactures and the other company owns the assets. 
E)  none of the above is correct.

Question 8

MERCOSUR is the third-largest trading block behind NAFTA and the EU.

Accepted Answer

A) True 
 B)False

Question 9

When a business has plants located in several foreign countries, it is called a(n)

Accepted Answer

A)  multinational enterprise. 
B)  joint venture. 
C)  exporting business. 
D)  licensing firm. 
E)  none of the above.

Question 10

Buyers that purchase dresses in Europe or calculators in Taiwan and have them shipped back to the United States for resale are engaging in

Accepted Answer

A)  exporting. 
B)  shipping. 
C)  importing. 
D)  expelling. 
E)  dumping.

Question 11

A tax that is levied on a foreign product entering a country is called an export tariff.

Accepted Answer

A) True 
 B)False

Question 12

Most trading companies are involved in manufacturing or owning assets related to manufacturing.

Accepted Answer

A) True 
 B)False

Question 13

At present, the United States has an embargo against North Korea because

Accepted Answer

A)  North Korean products are too difficult to use. 
B)  products from North Korea are in higher demand than American-made products. 
C)  North Korea has an embargo on American products. 
D)  North Korea will not adopt a capitalist government. 
E)  the two countries have extremely poor political relations.

Question 14

Which of the following statements is true about NAFTA?

Accepted Answer

A)  It is a free trade agreement between Canada and the United States. 
B)  It was initiated by the United States. 
C)  It was implemented during President Bill Clinton's term. 
D)  It immediately eliminated tariffs among the United States, Mexico, and Canada. 
E)  It was enacted in 2002 and encourages free trade.

Question 15

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 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

Question 16

The best method of learning from experience in international business is to

Accepted Answer

A)  enter into a licensing agreement. 
B)  start exporting through an export merchant. 
C)  start exporting through an export agent. 
D)  invest directly in a foreign country. 
E)  form a joint venture.

Question 17

If a country imports more than it exports, its balance of trade is said to be favourable.

Accepted Answer

A) True 
 B)False

Question 18

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.

Question 19

A new country is formed in central Africa.It has no absolute advantage in crude oil, diamonds, or wool.However, it does manufacture high-quality bows and arrows for specialised safari adventures.Which of the following statement is true?

Accepted Answer

A)  The new country should try to produce its own crude oil, diamonds, and wool. 
B)  The new country has a comparative advantage in the production of bows and arrows. 
C)  The new country has an unqualified advantage in the production of bows and arrows. 
D)  The new country has a determined advantage in the production of arrows. 
E)  The new country is engaged in dumping bows and arrows.

Question 20

____ is a contractual agreement where one firm gives another permission to produce and market its product and brand name in exchange for a fee.

Accepted Answer

A)  Licencing 
B)  Exporting 
C)  Joint venture 
D)  Countertrade 
E)  Strategic alliance

Exam 3: Global Business

An important and practical issue for domestic firms dealing with foreign customers is securing payment.

The International Trade Administration (ITA) offers assistance and information to help exporters.

Selling and shipping raw materials or products to other nations is called

Which of the following countries is not part of CAFTA?

___ was an original member of MERCOSUR.

Countertrade is an international barter transaction in which

MERCOSUR is the third-largest trading block behind NAFTA and the EU.

When a business has plants located in several foreign countries, it is called a(n)

Buyers that purchase dresses in Europe or calculators in Taiwan and have them shipped back to the United States for resale are engaging in

A tax that is levied on a foreign product entering a country is called an export tariff.

Most trading companies are involved in manufacturing or owning assets related to manufacturing.

At present, the United States has an embargo against North Korea because

Which of the following statements is true about NAFTA?

The best method of learning from experience in international business is to

If a country imports more than it exports, its balance of trade is said to be favourable.

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

A new country is formed in central Africa.It has no absolute advantage in crude oil, diamonds, or wool.However, it does manufacture high-quality bows and arrows for specialised safari adventures.Which of the following statement is true?

____ is a contractual agreement where one firm gives another permission to produce and market its product and brand name in exchange for a fee.