Question 1

Balance of payments is a much broader concept than balance of trade.

Accepted Answer

A) True 
 B)False

Question 2

By definition, every country has a(n)  ____ advantage in some product.

Accepted Answer

A)   relative
B)   absolute
C)   comparative
D)   superior
E)   inferiorF) A) and B)
G) B) and C)

Question 3

Which of the following are ways to export a product to a foreign market?

Accepted Answer

A)   using an export-import merchant
B)   using an export-import agent
C)   establishing a foreign sales office
D)   establishing a foreign sales branch
E)   All of the above are correct.F) A) and B)
G) A) and D)

Question 4

The Kingdom of Rhonda has no high tariffs, yet other countries find it difficult to trade with the Kingdom of Rhonda because of its requirements for labeling, product testing, and certification.These restrictions can best be classified as _____.

Accepted Answer

A)   embargos
B)   currency devaluations
C)   import quotas
D)   quality import restrictions
E)   bureaucratic red tapeF) A) and B)
G) C) and D)

Question 5

Which of the following is false concerning the International Monetary Fund?

Accepted Answer

A)   It has more than 150 member nations.
B)   It makes short-term loans to developing countries.
C)   Its loans are primarily to fund international trade.
D)   Its loans to developing countries are interest free.
E)   It is an international bank.F) D) and E)
G) A) and C)

Question 6

If the Land of Mercury had total exports of $150 billion and total imports of $234 billion, it had a _____.

Accepted Answer

A)   comparative advantage
B)   trade deficit
C)   balance of payments
D)   negative output
E)   positive balance of tradeF) A) and C)
G) A) and D)

Question 7

A letter of credit is issued in favor of the importer.

Accepted Answer

A) True 
 B)False

Question 8

Quotas may be set on worldwide imports or on imports from a specific country.

Accepted Answer

A) True 
 B)False

Question 9

A tariff is a tax levied on a particular foreign product entering a country.

Accepted Answer

A) True 
 B)False

Question 10

If Japan were regarded as the best electronics manufacturer in the world, what would be true?

Accepted Answer

A)   Japan would have a comparative advantage in electronics manufacturing.
B)   Japan would have a positive balance of trade.
C)   The United States would have a comparative advantage in electronics.
D)   Japan would have an absolute advantage in electronics production.
E)   Japan would have a trade deficit with the United States.F) B) and E)
G) B) and D)

Question 11

Licensing and exporting can be considered relatively low-risk methods of entering foreign markets.

Accepted Answer

A) True 
 B)False

Question 12

Suppose a set of English bone china costing 1,000 pounds costs $3,000 in the United States.After devaluation, the set of china costs $1,000.This change

Accepted Answer

A)   shows that to foreign purchasers, the price of the china is the same before and after the devaluation.
B)   makes the china less attractive to foreigner purchasers.
C)   makes the china more attractive to foreign purchasers.
D)   is irrelevant to foreign purchasers.
E)   proves that foreign purchasers would prefer devaluation of the English pound so that it would be worth $2.That way, they could get even more for their dollars.F) A) and B)
G) None of the above

Question 13

Arguments for the government imposing restrictions on foreign trade include

Accepted Answer

A)   the loss of jobs in foreign countries.
B)   advancing technology will harm the country's economy.
C)   restriction of consumers' choices.
D)   protection of the health of its citizens.
E)   helping the foreign country become more competitive.F) B) and C)
G) A) and D)

Question 14

____ is an internationally supported bank that provides loans to developing countries to help them grow.

Accepted Answer

A)   A multilateral development bank
B)   The Eximbank
C)   An international bank
D)   The Federal Reserve
E)   The International Monetary FundF) C) and E)
G) C) and D)

Question 15

The total flow of money into a country less the total flow of money out of the country over some period of time is called the nation's balance of trade.

Accepted Answer

A) True 
 B)False

Question 16

Forming a joint venture with an existing foreign company offers all of the following advantages except

Accepted Answer

A)   joining an established firm.
B)   requiring less commitment from all parties involved in the joint venture.
C)   providing immediate marketing knowledge.
D)   providing reduced risk.
E)   providing control over product attributes.F) A) and E)
G) B) and D)

Question 17

Globalization represents a huge opportunity for

Accepted Answer

A)   all countries-rich or poor.
B)   the United States.
C)   Japan.
D)   China.
E)   Asia.F) C) and E)
G) A) and B)

Question 18

A trading company provides a link between buyers and sellers in different countries.

Accepted Answer

A) True 
 B)False

Question 19

A ____ is a partnership formed to achieve a specific goal or to operate for a specific period of time.

Accepted Answer

A)   trading company
B)   strategic alliance
C)   licensing company
D)   countertrade agreement
E)   joint ventureF) C) and D)
G) A) and E)

Question 20

A limit on the amount of a particular good that may be imported into a country during a given period of time is called an import quota.

Accepted Answer

A) True 
 B)False

Exam 3: Exploring Global Business

A letter of credit is issued in favor of the importer.

Correct AnswerverifiedShow Answer

The Kingdom of Rhonda has no high tariffs, yet other countries find it difficult to trade with the Kingdom of Rhonda because of its requirements for labeling, product testing, and certification.These restrictions can best be classified as _____.

Correct AnswerverifiedShow Answer

Balance of payments is a much broader concept than balance of trade.

Correct AnswerverifiedShow Answer

By definition, every country has a(n) ____ advantage in some product.

Correct AnswerverifiedShow Answer

Which of the following are ways to export a product to a foreign market?

Correct AnswerverifiedShow Answer

Arguments for the government imposing restrictions on foreign trade include

Correct AnswerverifiedShow Answer

Which of the following is false concerning the International Monetary Fund?

Correct AnswerverifiedShow Answer

A ____ is a partnership formed to achieve a specific goal or to operate for a specific period of time.

Correct AnswerverifiedShow Answer

The total flow of money into a country less the total flow of money out of the country over some period of time is called the nation's balance of trade.

Correct AnswerverifiedShow Answer

A limit on the amount of a particular good that may be imported into a country during a given period of time is called an import quota.

Correct AnswerverifiedShow Answer

Forming a joint venture with an existing foreign company offers all of the following advantages except

Correct AnswerverifiedShow Answer

A trading company provides a link between buyers and sellers in different countries.

Correct AnswerverifiedShow Answer

____ is an internationally supported bank that provides loans to developing countries to help them grow.

Correct AnswerverifiedShow Answer

Globalization represents a huge opportunity for

Correct AnswerverifiedShow Answer

Licensing and exporting can be considered relatively low-risk methods of entering foreign markets.

Correct AnswerverifiedShow Answer

Suppose a set of English bone china costing 1,000 pounds costs $3,000 in the United States.After devaluation, the set of china costs $1,000.This change

Correct AnswerverifiedShow Answer

If the Land of Mercury had total exports of $150 billion and total imports of $234 billion, it had a _____.

Correct AnswerverifiedShow Answer

A tariff is a tax levied on a particular foreign product entering a country.

Correct AnswerverifiedShow Answer

Quotas may be set on worldwide imports or on imports from a specific country.

Correct AnswerverifiedShow Answer

If Japan were regarded as the best electronics manufacturer in the world, what would be true?

Correct AnswerverifiedShow Answer

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