Deck 3: Exploring Global Business

Question 1

Canada is considered the global leader in many high-value industries. Which of the following is NOT one of those industries that Canada is a global leader in?

A) financial services
B) telecommunications
C) agriculture
D) technology development

Answer 1

C

Question 2

China exports electronics to countries all over the world. Suppose the value of the Chinese yuan increases relative to other countries' currencies. What is the likely result?

A) China would export fewer electronics to other countries.
B) China would export more electronics to other countries.
C) China would experience economic expansion.
D) International investors are likely to invest in Chinese markets.

Answer 2

A

Question 3

If the value of the Taiwan dollar increases relative to other currencies, which of the following would you expect?

A) Canadian imports of Taiwanese goods will decrease.
B) Taiwan imports will decrease.
C) Taiwan exports will increase.
D) Taiwan imports will increase.

Answer 3

A

Question 4

Canada imports trillions of dollars of goods per year. What is a benefit of importing for Canada?

A) higher prices
B) shift of production resources to higher-value activities
C) less choice for consumers
D) increased incomes and jobs in the exporting country

Question 5

How has international trade changed in the last several decades?

A) it has decreased since its peak right after World War II
B) it has increased substantially
C) it has remained relatively stable
D) it has become completely unrestricted among all countries

Question 6

When a chain of organic coffee shops in Vancouver purchases coffee from Colombia, it is doing which of the following?

A) importing coffee
B) exporting coffee
C) having an absolute advantage
D) decreasing the balance-of-trade deficit

Question 7

Suppose the value of the Thai Baht decreases substantially in value compared to the Canadian dollar. What is the likely result?

A) Thai imports from Canada will decrease but exports to Canada will increase.
B) Thai imports from Canada will increase and so will exports to Canada.
C) Thai imports from Canada will decrease and so will exports to Canada.
D) Thai imports from Canada will increase but exports to Canada will decrease.

Question 8

In 2014, Canada imported $2 billion in computers. As a result of these imports, Canadian consumers had a ________ variety of computers to choose from and likely paid a ________ price than if the computers were produced in Canada.

A) larger, lower
B) larger, higher
C) smaller, lower
D) smaller, higher

Question 9

Absolute advantage is the ability to produce a specific product more efficiently than any other country. Canada has an absolute advantage in which of the following?

A) oranges
B) wheat
C) water
D) copper

Question 10

China has become a dominant exporter of electronics to Canadian and European markets. What is a direct effect of China's growth in exports?

A) lower prices in China
B) a decrease of jobs and income in China
C) more consumer choice in China
D) an increase of jobs and income in China

Question 11

A small country in Central America previously produced all of its own clothing because it has a strong textiles industry. Recently, it began importing clothing from Philippines, Vietnam, and Bangladesh. What is the likely result for the importing country?

A) it will experience higher clothing prices
B) it will shift additional resources into its own textile industry
C) it will shift resources from textiles to a higher value industry
D) it will export less overall

Question 12

Exchange rates between countries are usually determined by which of the following?

A) a number of factors including interest rates, inflation, and imports/exports for the countries
B) inflation in the first country divided by interest rate in the second country
C) an agreement between the two countries plus an interest rate exchange
D) the International Monetary Fund

Question 13

Suppose the Canadian dollar is strong relative to the euro. Which of the following would one expect to see regarding imports and exports?

A) imports to Canada decrease while Canadian exports increase
B) imports to Canada increase while Canadian exports increase
C) imports to Canada decrease while Canadian exports decrease
D) imports to Canada increase while Canadian exports decrease

Question 14

The United Kingdom sells industrial supplies to many nations around the world. The United Kingdom is engaging in which of the following practices?

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

Question 15

Companies that purchase calculators in Taiwan and have them shipped back to Canada for resale are engaging in which of the following practices?

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

Question 16

Suppose that last year it cost 1000 British pounds to buy a Canadian-made bicycle from Canada. Due to changes in the currency exchange rate, a few months later the same bicycle cost only 800 British pounds to purchase. What will be the likely result of this change?

A) increased number of exports of these bicycles to Canada
B) increased number of imports of these bicycles to Great Britain
C) decreased number of imports of these bicycles to Great Britain
D) decreased number of exports of these bicycles to Canada

Question 17

Suppose the Australian dollar increases substantially in value relative to other currencies. What is the likely result?

A) Australian exports will decrease and imports will increase
B) Australian exports will increase and imports will decrease
C) Australian exports will decrease and imports will decrease
D) Australian exports will increase and imports will increase

Question 18

As Canada increases exports of aircraft, one might expect which of the following?

A) an increase in access to resources
B) increased jobs and income in Canada
C) prices of aircraft to decrease
D) Canada to shift production resources to higher-value products

Question 19

What are two benefits of importing?

A) less access to resources, lower consumer prices
B) lower consumer prices, less consumer choice
C) higher consumer prices, increased access to resources
D) more consumer choice, lower consumer prices

Question 20

Which term describes the practice of purchasing products from other nations and bringing them into your country?

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

Question 21

Canada wishes to import no more than 100 million tons of sugar from Brazil in any given year. What type of import restriction should it impose?

A) import duty
B) import quota
C) embargo
D) export duty

Question 22

If a country raises its import quota for cars, what is the desired effect of this change?

A) to increase car imports
B) to decrease car imports
C) to halt car imports
D) to increase car exports

Question 23

Suppose that Peru increases tariffs on food products imported from Mexico. What is the desired effect of this tariff?

A) to increase the price of the imports and increase the amount of the imports
B) to increase the price of the imports and decrease the amount of the imports
C) to decrease the price of the imports and increase the amount of the imports
D) to decrease the price of the imports and decrease the amount of the imports

Question 24

What is the term for a limit on the amount of a particular good that may be brought into a country during a given period of time?

A) import duty
B) trade embargo
C) import tariff
D) import quota

Question 25

Canada imposes a duty on Scotch whisky to generate income for the Canadian government. What is the term for this type of tariff?

A) protective tariff
B) restrictive tariff
C) revenue tariff
D) income tariff

Question 26

During a stormy meeting of wearable technology firms, several company presidents said that without tariff cushions, many of them would go broke. They represent a new industry where companies need protection until they grow to a size that will allow them to be competitive. As a result, these companies would like to see which of the following?

A) increased import quotas
B) increased import tariffs
C) an increase in the value of the Canadian dollar
D) increased taxes on domestic technology firms

Question 27

Canadian automakers are concerned about the availability of so many foreign cars to Canadian consumers, which they fear could cause loss of jobs in the Canadian auto industry. To address the situation, they encourage Parliament to do which of the following?

A) increase export quotas
B) decrease import tariffs
C) increase import tariffs
D) increase import quotas

Question 28

When Canada levies a tax on textiles from India, this tax is a type of which of the following?

A) export duty
B) barter
C) import
D) tariff

Question 29

Germany wants to retaliate against India for trade restrictions that limited the number of German cars that could be brought into India. Which of the following policy decisions would Germany utilize to accomplish this goal?

A) increasing import quota on cars from India
B) enacting export embargo on cars to India
C) adjusting import tariffs on cars from India from 20% to 5%
D) adjusting import tariffs on cars from India from 5% to 20%

Question 30

Suppose that India changes the tariff on all imports from 40% to 10%. What is the desired effect of this change?

A) to increase the price and amount of imports
B) to decrease the price and amount of imports
C) to increase the price of imports and decrease the amount of imports
D) to decrease the price of imports and increase the amount of imports

Question 31

If the value of the Canadian dollar increases substantially relative to other currencies, what is the likely result?

A) Canadian exports and imports will increase.
B) Canadian exports and imports will decrease.
C) Canadian exports will increase and imports will decrease.
D) Canadian exports will decrease and imports will increase.

Question 32

When Canada levies a tax on coffee from Ecuador, what type of tax is involved?

A) export duty
B) barter
C) export
D) tariff

Question 33

Suppose France increased the tariff on wine imported from Spain, and in retaliation Spain decreased the quota on perfumes France can export to Spain. What might one expect to be the result?

A) the amount of Spanish wine France imports to decrease and the number of French perfumes Spain imports to decrease
B) French consumers to pay higher prices for Spanish wine and the number of French perfumes Spain imports to decrease
C) French consumers to pay lower prices for Spanish wine and Spanish consumers to pay lower prices for French perfumes
D) the amount of Spanish wine France imports to decrease and the number of French perfumes Spain imports to increase

Question 34

Which of the following is another name for an import duty?

A) tariff
B) embargo
C) quota
D) limitation

Question 35

If Canada were to increase the tariff for steel by 50%, what would be the desired effect of this change?

A) to increase the price and amount of steel imports
B) to decrease the price and amount of steel imports
C) to increase the price of steel imports and decrease the amount of steel imports
D) to decrease the price of steel imports and increase the amount of steel imports

Question 36

The United States bans Cuban cigars and other Cuban products from entering the United States because of political difficulties. What is this action called?

A) embargo
B) import quota
C) foreign-exchange control
D) import duty

Question 37

If Brazil lowers its import quota for oil from Saudi Arabia, what is the desired effect of this change?

A) to increase oil imports from Saudi Arabia
B) to decrease oil imports from Saudi Arabia
C) to halt oil imports from Saudi Arabia
D) to increase oil exports to Saudi Arabia

Question 38

The Canadian Department of Finance likely raised tariffs on Chinese solar-product manufacturers in an effort to do which of the following?

A) put a limit on the number of Chinese solar products imported by Canadian consumers
B) make it cheaper for Canadian consumers to buy solar products from China
C) give Canadian solar-product manufacturers an opportunity to gain market share
D) completely halt the import of Chinese solar-products into Canada

Question 39

Suppose Canada would like to decrease the amount of lumber brought into the country from other countries. What trade policy should Canada enact to accomplish this goal?

A) increase tariffs on lumber imports
B) decrease tariffs on lumber imports
C) increase quota on lumber imports
D) decrease quota on lumber exports

Question 40

Suppose Russia would like to increase the amount of luxury goods brought into the country from other countries. What trade policy should Russia enact to accomplish this goal?

A) increase tariffs on luxury good imports
B) lower quota on luxury good imports
C) decrease tariffs on luxury good imports
D) devalue its currency

Question 41

If Japan were concerned that electronics coming from China were hurting the Japanese electronics industry, which of the following actions would Japan take?

A) increase imports of Chinese electronics
B) cut import tariffs on Chinese electronics by 50%
C) stop exports of Japanese electronics to China
D) increase import tariffs on Chinese electronics by 50%

Question 42

Suppose Mexico increased tariffs on agriculture products from Chile by 20%. As a result, Chile retaliated by increasing tariffs on manufactured goods from Mexico by 15%. What international organization could most likely assist in this dispute?

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

Question 43

If the developing African country of Ethiopia were struggling to provide clean water to its citizens in rural areas, it would most likely seek assistance from which of the following?

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

Question 44

If Canada and Japan cannot settle their trade disputes on their own, they should probably settle them through which of the following entities?

A) IMF
B) World Bank
C) WTO
D) United Nations

Question 45

The United States does not allow export of any military technology to North Korea, a military adversary that frequently threatens the United States. What is the most likely reason for this trade policy?

A) to protect new or weak industries
B) to protect national security
C) to protect health of US citizens
D) to protect domestic jobs

Question 46

Canada does not sell military fighter jets such as F-16s to Iran in order to keep our military technology out of their hands. The rationale for this restriction is most likely for which of the following reasons?

A) to protect national security
B) to protect domestic jobs
C) to retaliate for Iran's trade restrictions
D) to protect domestic manufacturers

Question 47

Reasons cited for imposing restrictions on foreign trade include which of the following?

A) the loss of jobs in foreign countries
B) higher prices for consumers
C) restriction of consumer choices
D) protection of the health of its citizens

Question 48

If Australia changed the average import tariff on all goods from 30% to 2%, what would be the expected impact?

A) more consumer choice
B) higher consumer prices
C) an import quota
D) an increase in exports

Question 49

If Indonesia enacts an embargo on all goods from Canada and changes average import tariffs from 10% to 30%, what is the expected impact in Indonesia?

A) increased exports to Canada
B) more consumer choice
C) less consumer choice
D) lower prices for Indonesian consumers

Question 50

If the Chinese government wished to increase the amount of Canadian beef that is allowed to be imported into China, which of the following would it enact?

A) an increase in quota
B) a decrease in quota
C) an increase in tariffs
D) a decrease in tariffs

Question 51

If Brazil enacts an import embargo on sugar from other countries, what is the most likely result?

A) decrease in sugar imports
B) increase in sugar imports
C) increase in sugar exports
D) devaluation of Brazilian currency

Question 52

Howard believes that there should be no trade restrictions for any reason. What would Howard say are the negative consequences of trade restrictions?

A) lower tariffs
B) lower prices
C) more consumer choice
D) higher prices

Question 53

Tunisia has struggled with economic stability due to political transitions, work stoppages, and terrorist attacks that devastated the tourism industry. Which organization may be able to help Tunisia?

A) The IMF
B) The WTO
C) The United Nations
D) The World Bank

Question 54

If a small country wants to buy aircraft from Canada and Canada wants to export its aircraft, the countries may work through which of the following entities to remove any trade barriers that could prevent the deal?

A) GATT
B) IMF
C) WTO
D) EU

Question 55

What is the primary objective of the International Monetary Fund?

A) to help developing countries build a viable economy
B) to reduce barriers to trade worldwide
C) to support investments in developing countries
D) to promote economic stability in the global economy

Question 56

Someone in support of trade restrictions would make which of the following arguments?

A) trade restrictions can protect new or weak industries
B) trade restrictions reduce the number of domestic jobs
C) trade restrictions damage the health of citizens in your country
D) trade restrictions can damage national security

Question 57

As Greece, Spain, and Portugal have struggled with recession, high unemployment, and soaring government debt, concerns have risen that their economic problems could spiral out of control and spread to the global economy. What international organization could most likely assist in this situation?

A) The World Trade Organization
B) The World Bank
C) The International Stability Fund
D) The International Monetary Fund

Question 58

What is the primary objective of the World Trade Organization?

A) to help developing countries build a viable economy
B) to reduce barriers to trade worldwide
C) to provide technical assistance to developing countries
D) to promote the invention of new technologies

Question 59

If the Korean government charged tariffs on Japanese automobiles and in turn the Japanese government put tariffs on Korean automobiles, what would be Japan's major rationale for imposing these tariffs?

A) to protect national security
B) to protect domestic jobs
C) to retaliate for Korea's tariffs
D) to lower prices for consumers

Question 60

What is the primary objective of the World Bank?

A) to help developing countries build a viable economy
B) to mediate trade disputes
C) to reduce barriers to trade worldwide
D) to promote exchange rate stability

Question 61

Anup decides to take her small company international. She needs a low-risk method that won't require a large investment. She knows she might need to choose a method where she doesn't maintain 100% control over what happens with her product in the international markets. Which of the following would most likely be Anup's first step in going global?

A) She is likely to form a joint venture with a company in a foreign country.
B) She will initially advertise her products on the Internet and export them.
C) She will open and run a new facility in a foreign country.
D) She will form a strategic alliance to create a competitive advantage worldwide.

Question 62

If Brazil, Argentina, Colombia, Peru, and Chile decided to form the South American Union to increase trade with one another, this would exemplify which of the following?

A) world trade organization
B) peace agreement
C) economic community
D) global marketplace

Question 63

UK's Jaguar Land Rover and China's Chery Automobile formed a partnership to produce Jaguar sedans, Land Rover SUVs, and co-branded vehicles in China. This is an example of which of the following?

A) a joint venture
B) exporting
C) a licensing agreement
D) franchising

Question 64

Member nations of this economic community include Australia, Japan, and the United States.

A) EU
B) NAFTA
C) APEC
D) ASEAN

Question 65

Approximately 11 million people in Indonesia live without access to sanitation and 9 million lack access to safe water. Which organization could provide help with infrastructure to help Indonesia's poor?

A) The WTO
B) The World Bank
C) The IMF
D) ASEAN

Question 66

If Procter & Gamble, a North American leader in household products, and Reckitt Benckiser, a British leader in household products, form a partnership to develop and distribute a line of ecologically friendly laundry detergent, what would the resulting partnership be?

A) a corporation
B) a joint venture
C) a licensing agreement
D) an economic community

Question 67

What type of international expansion did BMW engage in when it built production lines in the United States?

A) totally owned facilities
B) joint venture
C) licensing
D) franchising

Question 68

The goals of regional economic integration include which of the following?

A) increased trade barriers
B) lower tariffs
C) smaller flow of international trade
D) lower import quotas

Question 69

Which entity has a collective economy that is larger than the United States and almost three times larger than Japan?

A) NAFTA
B) EU
C) APEC
D) ASEAN

Question 70

Areas of rural Bangladesh lack basic infrastructure, such as working roads, electricity, and clean water. What international organization could most likely assist in this situation?

A) The World Building Fund
B) The World Bank
C) International Monetary Fund
D) International Infrastructure Bank

Question 71

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?

A) selling its products outright to an export/import merchant
B) hiring an export/import agent to assist with foreign sales
C) developing totally owned facilities in a foreign market
D) establishing its own sales offices in foreign countries

Question 72

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?

A) export/import agent agreement
B) joint venture
C) licensing
D) multinational agreement

Question 73

When Sony Corporation of Japan purchased Columbia Pictures Entertainment, Inc., of the United States, which of the following was made by Sony?

A) a licensing agreement in the United States
B) a direct investment in the United States
C) a joint venture with Columbia Pictures
D) an exporting agreement with the United States

Question 74

Why did Gabriella choose franchising as her method of entry for her jewellery and accessory business?

A) she wanted to maintain a high level of control in the business and was willing to take significant risks to enter the overseas market
B) she was not concerned about her level of control in the business but was concerned about her level of risk
C) she wanted to maintain a moderate level of control but lacked funds to open a division overseas
D) she was very concerned about her level of control in the company and wished to join a partnership to enter the overseas market

Question 75

Which countries are members of NAFTA?

A) The United States, Canada, and Mexico
B) Guatemala, Honduras, and Mexico
C) The United States, Mexico, and Japan
D) The United States, Canada, and the United Kingdom

Question 76

Totally owned facilities overseas are an example of which of the following?

A) indirect investment
B) direct investment
C) licensing
D) joint venture

Question 77

Which organization provided Iraq with a $5.34 billion loan to help support economic stability after Iraq was prompted by ISIS attacks and a sharp drop in global oil prices to seek assistance from it?

A) WTO
B) United Nations
C) World Bank
D) IMF

Question 78

Which of the following terms describes an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies?

A) economic community
B) embargo
C) common market
D) international alliance