Question 1

If a country is the only source of a particular product or it can make more of a product using the same amount of or fewer resources than other countries we say that the country has an absolute advantage in economic terms.

Accepted Answer

A) True 
 B)False

Question 2

Cajun Chicken, a growing franchise chain based in Lafayette, Louisiana, has expanded to 185 locations in the United States. Because they realize that domestic growth is limited, the owners are contemplating expansion to selected foreign countries. Thus far, research has shown that the rights to use many of the firm’s recipes can be sold to other restaurants, cafeterias, and food stores. Cajun can also sell prepackaged food products, complete with spices, to other markets. At this point, whether to start by opening company-owned outlets or selling franchises is still a toss up. In any case, the long-term picture looks good.
-If Cajun Chicken opens companyowned stores and restaurants in Europe, it will be engaged in _____.

Accepted Answer

A)  licensing 
B)  franchising 
C)  exporting 
D)  foreign direct investment

Question 3

The two most important institutions that monitor international trade policies are _____.

Accepted Answer

A)  NAFTA (North American Free Trade Association) and the World Bank 
B)  the World Bank and the EU (European Union) 
C)  GATT 
D)  WTO

Question 4

In many countries, American firms may be at a disadvantage in communicating with the general public because only ____ speak English.

Accepted Answer

A)  military personnel 
B)  the wealthy 
C)  the educated classes 
D)  other businesspeople

Question 5

When Whitlock Clothiers began overseas operations, top management had to learn to appreciate the _____ environments of other countries-that is, other people's systems of shared beliefs, values, customs, and behaviors.

Accepted Answer

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

Question 6

The euro, the common currency of the European Union, facilitates trade and finance by _____.

Accepted Answer

A)  enabling different member economies to act as one 
B)  simplifying exchange rate differences 
C)  banning the U.S. dollar in member countries 
D)  guaranteeing economic stability to member nations

Question 7

As someone who lives and works in a European Union country and uses the euro, you've probably found that this common currency facilitates trade and finance by making exchange rate differences less complicated.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not among possible advantages of membership in the European Union (EU)

Accepted Answer

A)  The EU allows unrestricted trade among member nations. 
B)  The EU permits anyone with an EU passport to work in any EU nation. 
C)  The EU guarantees starting salaries for government workers in any EU nation. 
D)  The EU enhances political and social cooperation among its members.

Question 9

In high-context cultures, business-people don't need to know much about the personal life of a person in order to deal with him or her in a business setting.

Accepted Answer

A) True 
 B)False

Question 10

According to some experts, American businesspeople are at a competitive disadvantage when they're prohibited from _____ foreign officials or businesspeople.

Accepted Answer

A)  being friendly with 
B)  giving bribes or undercover payments to 
C)  exporting to and importing from 
D)  moving in with

Question 11

Strategic alliances range in scope from informal cooperative agreements to joint ventures.

Accepted Answer

A) True 
 B)False

Question 12

Entrée Specialités, which produces food products and ships them to several independent buyers throughout Western Europe, is in the _____ business.

Accepted Answer

A)  importing 
B)  comestibletrade 
C)  exporting 
D)  licensing

Question 13

The major purposes of the General Agreement on Tariffs and Trade (GATT) include encouraging free trade, regulating and reducing tariffs, and providing a forum for resolving trade disputes.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are conducive to economic growth except _____.

Accepted Answer

A)  a reliable banking system 
B)  an unfavorable balance of trade and payments 
C)  a strong stock market and a government that discourages corruption 
D)  government policies that encourage investment and competition

Question 15

In many countries, American firms may be at a disadvantage in competing with local companies because only the educated classes speak English.

Accepted Answer

A) True 
 B)False

Question 16

The largest factors in a country's balance of payments consist of revenues from tourism and welfare benefits paid to citizens and immigrants.

Accepted Answer

A) True 
 B)False

Question 17

In communicating with other countries or cultures, it's valuable to understand all of the following except _____.

Accepted Answer

A)  the fact that different cultures have different communication styles 
B)  certain subtle differences between cultures 
C)  that cultural stereotypes shouldn't dictate interactions 
D)  English, which is the prevalent language of business

Question 18

Alliances range in scope from informal cooperative agreements to _____.

Accepted Answer

A)  partnerships 
B)  joint ventures 
C)  "C" corporations 
D)  trade consortia

Question 19

In economic terms, "balance of payments" refers to the difference between a country's total outflows and inflows of money over a period of time.

Accepted Answer

A) True 
 B)False

Question 20

Under NAFTA (North American Free Trade Association), the United States, Canada, and Mexico are free to produce what each country does best and trade its goods and services without _____.

Accepted Answer

A)  restrictions 
B)  taxes 
C)  job losses 
D)  currency devaluation

Exam 3: Business in a Global Environment

If a country is the only source of a particular product or it can make more of a product using the same amount of or fewer resources than other countries we say that the country has an absolute advantage in economic terms.

The two most important institutions that monitor international trade policies are _____.

In many countries, American firms may be at a disadvantage in communicating with the general public because only ____ speak English.

When Whitlock Clothiers began overseas operations, top management had to learn to appreciate the _____ environments of other countries-that is, other people's systems of shared beliefs, values, customs, and behaviors.

The euro, the common currency of the European Union, facilitates trade and finance by _____.

As someone who lives and works in a European Union country and uses the euro, you've probably found that this common currency facilitates trade and finance by making exchange rate differences less complicated.

Which of the following is not among possible advantages of membership in the European Union (EU)

In high-context cultures, business-people don't need to know much about the personal life of a person in order to deal with him or her in a business setting.

According to some experts, American businesspeople are at a competitive disadvantage when they're prohibited from _____ foreign officials or businesspeople.

Strategic alliances range in scope from informal cooperative agreements to joint ventures.

Entrée Specialités, which produces food products and ships them to several independent buyers throughout Western Europe, is in the _____ business.

The major purposes of the General Agreement on Tariffs and Trade (GATT) include encouraging free trade, regulating and reducing tariffs, and providing a forum for resolving trade disputes.

All of the following are conducive to economic growth except _____.

In many countries, American firms may be at a disadvantage in competing with local companies because only the educated classes speak English.

The largest factors in a country's balance of payments consist of revenues from tourism and welfare benefits paid to citizens and immigrants.

In communicating with other countries or cultures, it's valuable to understand all of the following except _____.

Alliances range in scope from informal cooperative agreements to _____.

In economic terms, "balance of payments" refers to the difference between a country's total outflows and inflows of money over a period of time.

Under NAFTA (North American Free Trade Association) , the United States, Canada, and Mexico are free to produce what each country does best and trade its goods and services without _____.