Question 1

An absolute advantage occurs when a country can maintain _____.

Accepted Answer

A) a monopoly by outlawing foreign imports 
B) a monopoly by levying high taxes on imports 
C) a monopoly by being the lowest-cost producer of a good or service 
D) its advantage by producing a good or service more efficiently

Question 2

A balance of payments deficit occurs when _____.

Accepted Answer

A) the net inflow of money from abroad exceeds the net outflows of money to other countries 
B) imports exceed exports 
C) the net outflow of money from a country exceeds the net inflow of money from abroad 
D) exports exceed imports

Question 3

A partnership between companies formed for a specific undertaking is called a joint venture.

Accepted Answer

A) True 
 B)False

Question 4

The government of a less-developed country wants to build several new healthcare facilities in rural areas and improve port facilities to promote exports.The World Bank would likely deny a loan for related construction projects.

Accepted Answer

A) True 
 B)False

Question 5

U.S.sugar producers welcomed the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)because relaxed trade rules with Central America drove prices higher.

Accepted Answer

A) True 
 B)False

Question 6

A country's department of trade and commerce decides to regulate imports from a neighboring country in order to curb the exit of large amounts of domestic capital.This is an example of a(n)_____.

Accepted Answer

A) embargo 
B) exchange control 
C) quota 
D) protective tariff

Question 7

An American company that makes plastic garden furniture wants to market its products in a foreign country that has a high tariff barrier against imported plastic goods.One way the company can get around this problem is to _____.

Accepted Answer

A) hire an export management team 
B) violate the Foreign Corrupt Practices Act 
C) enter into a licensing agreement with companies within the foreign country to produce the furniture there 
D) submit a complaint to the U.S.Department of Commerce

Question 8

Another term for international bartering is countertrade.

Accepted Answer

A) True 
 B)False

Question 9

Unlike countries included in the EU,economically speaking,the United States is a national market with a single economy.

Accepted Answer

A) True 
 B)False

Question 10

When a company operates in other countries,it _____ risk.

Accepted Answer

A) has no impact on 
B) eliminates 
C) controls 
D) spreads out

Question 11

A country's balance of trade is determined by comparing the total amount of its exports to its imports.

Accepted Answer

A) True 
 B)False

Question 12

Baby Toys,Inc.(BTI)enters into a contract with a foreign company to produce and distribute its products in a specific geographic area.BTI is involved in _____.

Accepted Answer

A) foreign licensing 
B) countertrade 
C) international production 
D) direct exporting

Question 13

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

Accepted Answer

A) exchange controls 
B) embargo 
C) dumping 
D) tariffs

Question 14

All of the following are social and cultural barriers EXCEPT _____.

Accepted Answer

A) language 
B) currency shifts 
C) religious attitudes 
D) gift-giving traditions

Question 15

A country has a good chance of selling more of its goods abroad if it _____.

Accepted Answer

A) increases the value of its currency 
B) more tourists decide to travel abroad 
C) devalues its currency 
D) sets high tariffs on imported goods

Question 16

How do export trading companies earn profits?

Accepted Answer

A) They charge a revenue tariff on the goods. 
B) They ensure that no other export trading company deals in the same goods. 
C) They buy competitively priced local goods and sell them at a higher price abroad. 
D) They earn incentives from the government to increase exports.

Question 17

Interestingly,exchange controls affect exporters but not importers.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following does NOT constitute a country's infrastructure?

Accepted Answer

A) Political climate 
B) Communication 
C) Energy facilities 
D) Transportation

Question 19

With the unification in place,the euro is the currency of all EU countries.

Accepted Answer

A) True 
 B)False

Question 20

Cultural sensitivity is not as important of an issue in cyberspace as it is in other communication realms.

Accepted Answer

A) True 
 B)False

Exam 4: Competing in World Markets

An absolute advantage occurs when a country can maintain _____.

A balance of payments deficit occurs when _____.

A partnership between companies formed for a specific undertaking is called a joint venture.

The government of a less-developed country wants to build several new healthcare facilities in rural areas and improve port facilities to promote exports.The World Bank would likely deny a loan for related construction projects.

U.S.sugar producers welcomed the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)because relaxed trade rules with Central America drove prices higher.

A country's department of trade and commerce decides to regulate imports from a neighboring country in order to curb the exit of large amounts of domestic capital.This is an example of a(n) _____.

An American company that makes plastic garden furniture wants to market its products in a foreign country that has a high tariff barrier against imported plastic goods.One way the company can get around this problem is to _____.

Another term for international bartering is countertrade.

Unlike countries included in the EU,economically speaking,the United States is a national market with a single economy.

When a company operates in other countries,it _____ risk.

A country's balance of trade is determined by comparing the total amount of its exports to its imports.

Baby Toys,Inc.(BTI) enters into a contract with a foreign company to produce and distribute its products in a specific geographic area.BTI is involved in _____.

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

All of the following are social and cultural barriers EXCEPT _____.

A country has a good chance of selling more of its goods abroad if it _____.

How do export trading companies earn profits?

Interestingly,exchange controls affect exporters but not importers.

Which of the following does NOT constitute a country's infrastructure?

With the unification in place,the euro is the currency of all EU countries.

Cultural sensitivity is not as important of an issue in cyberspace as it is in other communication realms.