Question 1

A reduction of the value of a nation's currency relative to the currencies of other countries is called a currency devaluation.

Accepted Answer

A) True 
 B)False

Question 2

An international bank that makes short-term loans to countries experiencing balance of payment deficits is called a multilateral development bank.

Accepted Answer

A) True 
 B)False

Question 3

In 1967, several Asian countries banded together to reduce the trade barriers between them and encourage trading among themselves.This is known as

Accepted Answer

A)   a GATT.
B)   the European Union.
C)   the Association of Southeast Asian Nations.
D)   a multinational.
E)   an orderly marketing agreement.F) B) and C)
G) C) and E) C

Question 4

The land of Narnack has very infertile soil but a large supply of oil.What action should Narnack take? Narnack should

Accepted Answer

A)   specialise in the production of crude oil and trade this for grain and other food products.
B)   grow food anyway because its people will need it for survival.
C)   focus on attracting tourists to its country and thus purchase the needed supplies of food.
D)   specialise in the production of food products such as cereals and bread.
E)   import oil to satisfy the country's need for gasoline.F) B) and D)
G) C) and D)

Question 5

XYZ Company wants to explore commercial opportunities in India and is seeking economic and export-promotion information.The best possibility would be the

Accepted Answer

A)   Advocacy Centrefavo.
B)   International Trade Administration.
C)   National Trade Data Bank.
D)   U.S.and Foreign Commercial Services.
E)   Trade Information Centre.F) C) and E)
G) None of the above

Question 6

The New United Motor Manufacturing, Inc., formed by Toyota and General Motors to make cars, is an example of a(n)

Accepted Answer

A)   strategic alliance.
B)   licensing agreement.
C)   exporting agency.
D)   trading company.
E)   countertrade.F) A) and B)
G) A) and E)

Question 7

Which bank was established in 1990 to encourage reconstruction and development in the eastern and central European countries?

Accepted Answer

A)   The Ex-Im Bank
B)   The Bank of America
C)   The European Bank for Reconstruction and Development
D)   The Inter-American Development Bank
E)   The International Monetary FundF) A) and B)
G) A) and C) C

Question 8

Countries experiencing balance-of-payments deficits can obtain short-term loans from the

Accepted Answer

A)   World Bank.
B)   Export-Import Bank of the World.
C)   African Development Bank.
D)   International Monetary Fund.
E)   Multilateral Development Bank of Central and South America.F) C) and D)
G) None of the above

Question 9

Trading companies do not take title to products.

Accepted Answer

A) True 
 B)False

Question 10

Ford Motor Company, Mazda Motor Corporation, and Matsushita Electrical Industrial Company formed a ____ to make heating and cooling units in Japan for Mazda cars beginning in 1988.The new company's heating and cooling units may also be used in Ford's cars.

Accepted Answer

A)   sales branch
B)   joint venture
C)   Subsidiary
D)   licensing agreement
E)   sole proprietorshipF) B) and C)
G) C) and D) B

Question 11

Suppose Brazil, Argentina, Columbia, Peru, and Chile decide to form the South American Union to increase trade among these nations.This would be an example of a(n)

Accepted Answer

A)   world trade organisation.
B)   peace agreement.
C)   economic community.
D)   free trade agreement.
E)   global marketplace.F) A) and E)
G) B) and D)

Question 12

A limit on the amount of a particular good that may be brought into a country during a given period of time is called a(n)

Accepted Answer

A)   import duty.
B)   import deficit.
C)   trade embargo.
D)   import tariff.
E)   import quota.F) B) and D)
G) A) and B)

Question 13

Which of the following is a potential drawback of licensing?

Accepted Answer

A)   If quality is compromised, it may reflect poorly on the company providing the licence.
B)   Licensing will provide the original producer with much foreign marketing experience.
C)   It is a relatively inexpensive way to market your product internationally.
D)   It is an extremely expensive and highly involved method of international expansion.
E)   It provides no compensation for the original company.F) A) and E)
G) C) and D)

Question 14

A newly formed country in the Caribbean has no high tariffs, yet other countries find it difficult to trade with the new country because of its requirements for labeling, product testing, and certifications.These restrictions can best be classified as

Accepted Answer

A)   embargos.
B)   currency devaluations.
C)   import quotas.
D)   quality import restrictions.
E)   bureaucratic red tape.F) None of the above
G) B) and E)

Question 15

Landing Service
Landing Service is a lawn furniture company that has been around for many years.It is known for its ability to produce furniture more efficiently than any other company in the nation.In truth, no other companies in any other nation come close.Landing Service has shipped many of its products internationally.In fact, 80 percent of its profits come from international sales.However, the Italian government has imposed a tax on imported furniture items to protect local companies.The Brazilian government, on the other hand, has imposed taxes on Landing Service products due to the government wanting a piece of the pie.
Landing Service initially thought that these taxes were unfair because it was being singled out.However, after Landing Service contacted the organisation that had the power to mediate this situation, the furniture company realised that the taxation it was subjected to was legal and that there was nothing it could do about it.
-Refer to Landing Service.The Landing Service does mostly

Accepted Answer

A)   mediating.
B)   domestic sales.
C)   importing.
D)   exporting.
E)   currency devaluation.F) A) and E)
G) C) and D)

Question 16

Janet hires an export merchant to help expand her business internationally.After signing contracts with a foreign purchaser outlining the terms of sale and delivery, the exporter will send Janet's merchandise when

Accepted Answer

A)   Janet's bank receives a letter of credit from the importer's bank.
B)   it receives a letter of credit from Janet's bank.
C)   its bank receives a draft from the importer's bank.
D)   Janet receives a bill of lading.
E)   the ultimate consumer sends a bill of lading to the exporter's bank.F) C) and D)
G) B) and E)

Question 17

Absolute advantage is the ability to produce a specific product more efficiently than any other nation.

Accepted Answer

A) True 
 B)False

Question 18

A letter of credit is issued by the transport carrier to the exporter to prove that merchandise has been shipped.

Accepted Answer

A) True 
 B)False

Question 19

The TPP was agreed upon in the 1970s by a small group of Central American countries.

Accepted Answer

A) True 
 B)False

Question 20

When a country exports more than it imports, it has a(n)

Accepted Answer

A)   trade deficit.
B)   favourable balance of trade.
C)   unfavourable exchange rate.
D)   unfavourable balance of trade.
E)   unfavourable balance of payments.F) None of the above
G) C) and E)

Exam 3: Global Business

A reduction of the value of a nation's currency relative to the currencies of other countries is called a currency devaluation.

Correct Answer
verified

An international bank that makes short-term loans to countries experiencing balance of payment deficits is called a multilateral development bank.

Correct Answer
verified

In 1967, several Asian countries banded together to reduce the trade barriers between them and encourage trading among themselves.This is known as

Correct Answer
verified
C

The land of Narnack has very infertile soil but a large supply of oil.What action should Narnack take? Narnack should

Correct Answer
verified

XYZ Company wants to explore commercial opportunities in India and is seeking economic and export-promotion information.The best possibility would be the

Correct Answer
verified

The New United Motor Manufacturing, Inc., formed by Toyota and General Motors to make cars, is an example of a(n)

Correct Answer
verified

Which bank was established in 1990 to encourage reconstruction and development in the eastern and central European countries?

Correct Answer
verified
C

Countries experiencing balance-of-payments deficits can obtain short-term loans from the

Correct Answer
verified

Trading companies do not take title to products.

Correct Answer
verified

Ford Motor Company, Mazda Motor Corporation, and Matsushita Electrical Industrial Company formed a ____ to make heating and cooling units in Japan for Mazda cars beginning in 1988.The new company's heating and cooling units may also be used in Ford's cars.

Correct Answer
verified
B

Suppose Brazil, Argentina, Columbia, Peru, and Chile decide to form the South American Union to increase trade among these nations.This would be an example of a(n)

Correct Answer
verified

A limit on the amount of a particular good that may be brought into a country during a given period of time is called a(n)

Correct Answer
verified

Which of the following is a potential drawback of licensing?

Correct Answer
verified

A newly formed country in the Caribbean has no high tariffs, yet other countries find it difficult to trade with the new country because of its requirements for labeling, product testing, and certifications.These restrictions can best be classified as

Correct Answer
verified

Correct Answer
verified

Janet hires an export merchant to help expand her business internationally.After signing contracts with a foreign purchaser outlining the terms of sale and delivery, the exporter will send Janet's merchandise when

Correct Answer
verified

Absolute advantage is the ability to produce a specific product more efficiently than any other nation.

Correct Answer
verified

A letter of credit is issued by the transport carrier to the exporter to prove that merchandise has been shipped.

Correct Answer
verified

The TPP was agreed upon in the 1970s by a small group of Central American countries.

Correct Answer
verified

When a country exports more than it imports, it has a(n)

Correct Answer
verified

Exam 3: Global Business

A reduction of the value of a nation's currency relative to the currencies of other countries is called a currency devaluation.

Correct AnswerverifiedShow Answer

An international bank that makes short-term loans to countries experiencing balance of payment deficits is called a multilateral development bank.

Correct AnswerverifiedShow Answer

In 1967, several Asian countries banded together to reduce the trade barriers between them and encourage trading among themselves.This is known as

Correct AnswerverifiedC

The land of Narnack has very infertile soil but a large supply of oil.What action should Narnack take? Narnack should

Correct AnswerverifiedShow Answer

XYZ Company wants to explore commercial opportunities in India and is seeking economic and export-promotion information.The best possibility would be the

Correct AnswerverifiedShow Answer

The New United Motor Manufacturing, Inc., formed by Toyota and General Motors to make cars, is an example of a(n)

Correct AnswerverifiedShow Answer

Which bank was established in 1990 to encourage reconstruction and development in the eastern and central European countries?

Correct AnswerverifiedC

Countries experiencing balance-of-payments deficits can obtain short-term loans from the

Correct AnswerverifiedShow Answer

Trading companies do not take title to products.

Correct AnswerverifiedShow Answer

Ford Motor Company, Mazda Motor Corporation, and Matsushita Electrical Industrial Company formed a ____ to make heating and cooling units in Japan for Mazda cars beginning in 1988.The new company's heating and cooling units may also be used in Ford's cars.

Correct AnswerverifiedB

Suppose Brazil, Argentina, Columbia, Peru, and Chile decide to form the South American Union to increase trade among these nations.This would be an example of a(n)

Correct AnswerverifiedShow Answer

A limit on the amount of a particular good that may be brought into a country during a given period of time is called a(n)

Correct AnswerverifiedShow Answer

Which of the following is a potential drawback of licensing?

Correct AnswerverifiedShow Answer

A newly formed country in the Caribbean has no high tariffs, yet other countries find it difficult to trade with the new country because of its requirements for labeling, product testing, and certifications.These restrictions can best be classified as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Janet hires an export merchant to help expand her business internationally.After signing contracts with a foreign purchaser outlining the terms of sale and delivery, the exporter will send Janet's merchandise when

Correct AnswerverifiedShow Answer

Absolute advantage is the ability to produce a specific product more efficiently than any other nation.

Correct AnswerverifiedShow Answer

A letter of credit is issued by the transport carrier to the exporter to prove that merchandise has been shipped.

Correct AnswerverifiedShow Answer

The TPP was agreed upon in the 1970s by a small group of Central American countries.

Correct AnswerverifiedShow Answer

When a country exports more than it imports, it has a(n)

Correct AnswerverifiedShow Answer

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C

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C

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B

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