Question 1

Which of the following is a principle that governs the world trade organization's work?

Accepted Answer

A)  giving preference to trading partners who provide maximum business 
B)  protecting domestic industries by offering financial assistance 
C)  making trade policies more predictable and less arbitrary 
D)  establishing dumping procedures to prevent pollution in developed countries 
E)  implementing protectionist ideologies to establish fair trade between nations

Question 2

An embargo is a ________.

Accepted Answer

A)  quantity restriction on the import of particular goods or services 
B)  surcharge imposed on import of certain products 
C)  subsidy offered to products exported from a country 
D)  complete ban on the import or export of certain products 
E)  form of financial assistance extended to domestic producers

Question 3

Which of the following is an objective of protectionism?

Accepted Answer

A)  reducing the purchasing power of individuals 
B)  guard specific industries in a nation 
C)  enhancing trade between nations 
D)  increasing foreign direct investment 
E)  helping developing nations engage in global trade

Question 4

A country has a trade surplus when the ________.

Accepted Answer

A)  value of its exports exceeds the value of its imports 
B)  exchange rate of its currency with other currencies is variable 
C)  exchange rate of its currency with other currencies is fixed 
D)  value of its imports exceeds the value of its exports 
E)  total flow of money into the country equals the total flow of money out of the country

Question 5

Export subsidies are a form of financial assistance given to exporters.

Accepted Answer

A) True 
 B)False

Question 6

The legal systems in the United States and the United Kingdom are based on civil law.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following acts outlaws payments that are intended to get government officials to break the laws of their own countries or to secure "improper advantage" in gaining or retaining sales?

Accepted Answer

A)  Mustering-out Payment Act 
B)  Export-Import Bank Act 
C)  Foreign Corrupt Practices Act 
D)  Special Payment Act 
E)  Federal Corrupt Practices Act

Question 8

A country can assist its domestic producers by implementing ________ such as special business licenses and limiting foreign companies' access to them.

Accepted Answer

A)  export subsidies 
B)  embargos 
C)  import quotas 
D)  tariffs 
E)  restrictive import standards

Question 9

Comparative advantage theory states that countries should produce and sell to other countries those things it can produce most efficiently.

Accepted Answer

A) True 
 B)False

Question 10

The North American Free Trade Agreement (NAFTA)was formed by the United States,Canada,and ________.

Accepted Answer

A)  Costa Rica 
B)  Jamaica 
C)  Cuba 
D)  Mexico 
E)  Honduras

Question 11

________ refers to assigning a wide range of generalized (and often superficial or even false)attributes to an individual based on his or her membership in a particular culture or social group.

Accepted Answer

A)  Ethnocentrism 
B)  Stereotyping 
C)  Protectionism 
D)  Discerning 
E)  Culture shock

Question 12

A country has a trade deficit when the ________.

Accepted Answer

A)  exchange rate of its currency with other currencies is fixed 
B)  exchange rate of its currency with other currencies is variable 
C)  value of its exports exceeds the value of its imports 
D)  total flow of money into the country equals the total flow of money out of the country 
E)  value of its imports exceeds the value of its exports

Question 13

Joint ventures are short-term partnerships between two or more companies to jointly develop,produce,or sell products.

Accepted Answer

A) True 
 B)False

Question 14

Ethnocentrism is the tendency to assign a wide range of generalized attributes to an individual.

Accepted Answer

A) True 
 B)False

Question 15

Abarma Chemicals produces various types of drugs.The company has a centralized production facility in China.It manufactures standardized products and ships them to various countries from China.The company's procurement,operations,and customer service are controlled centrally from China.Abarma Chemicals is using a ________ strategy.

Accepted Answer

A)  franchising 
B)  global 
C)  distributed 
D)  transnational 
E)  multidomestic

Question 16

You are the strategist of a firm that manufactures premium cars.The company is planning to enter China as part of its expansion strategy.Conduct a secondary study to identify the various trade barriers that the company will face in China.

Accepted Answer

The answer of You are the strategist of a firm...

Question 17

Brazil is said to have a(n)________ in coffee beans because it can produce coffee beans more efficiently than other countries.

Accepted Answer

A)  credit advantage 
B)  balance of trade 
C)  trade surplus 
D)  trade deficit 
E)  comparative advantage

Question 18

Theocratic law is found in Iran and Pakistan and is based on ________.

Accepted Answer

A)  traditions and customs 
B)  religious principles 
C)  detailed legal codes 
D)  legal parameters 
E)  judicial interpretations

Question 19

Charles Associates is a U.S.company and has a central production plant in the U.S.(Currency: U.S.dollar).It imports capital equipment and raw materials from Italy and Germany (Currency: Euro).The company exports its products to China (Currency: Renminbi),Japan (Currency: Yen),and India (Currency: Rupee).Which of the following changes in the exchange market is beneficial to Charles Associates?

Accepted Answer

A)  The U.S. dollar has strengthened against the Rupee. 
B)  The U.S. dollar has strengthened against the Renminbi. 
C)  The U.S. dollar has strengthened against the Euro. 
D)  The Yen has become weak against U.S. dollars. 
E)  The Euro has become strong against U.S. dollars

Question 20

Which of the following statements is TRUE of the European Union (EU)?

Accepted Answer

A)  The EU has imposed hundreds of local regulations and variations in product standards for its member nations. 
B)  The European Union's membership now encompasses more than 150 countries. 
C)  Viewed as a whole, the EU now constitutes the world's largest economy. 
D)  The EU adopts protectionist measures to regulate trade among member countries. 
E)  The EU was formed primarily to monitor global financial developments and to alleviate poverty in developing economies.

Exam 3: The Global Marketplace

Which of the following is a principle that governs the world trade organization's work?

An embargo is a ________.

Which of the following is an objective of protectionism?

A country has a trade surplus when the ________.

Export subsidies are a form of financial assistance given to exporters.

The legal systems in the United States and the United Kingdom are based on civil law.

Which of the following acts outlaws payments that are intended to get government officials to break the laws of their own countries or to secure "improper advantage" in gaining or retaining sales?

A country can assist its domestic producers by implementing ________ such as special business licenses and limiting foreign companies' access to them.

Comparative advantage theory states that countries should produce and sell to other countries those things it can produce most efficiently.

The North American Free Trade Agreement (NAFTA) was formed by the United States,Canada,and ________.

________ refers to assigning a wide range of generalized (and often superficial or even false) attributes to an individual based on his or her membership in a particular culture or social group.

A country has a trade deficit when the ________.

Joint ventures are short-term partnerships between two or more companies to jointly develop,produce,or sell products.

Ethnocentrism is the tendency to assign a wide range of generalized attributes to an individual.

You are the strategist of a firm that manufactures premium cars.The company is planning to enter China as part of its expansion strategy.Conduct a secondary study to identify the various trade barriers that the company will face in China.

Brazil is said to have a(n) ________ in coffee beans because it can produce coffee beans more efficiently than other countries.

Theocratic law is found in Iran and Pakistan and is based on ________.

Which of the following statements is TRUE of the European Union (EU) ?