Question 1

Devaluation decreases the cost of foreign goods and increases the cost of domestic goods to foreign firms.

Accepted Answer

A) True 
 B)False

Question 2

Trading companies do not take title to products.

Accepted Answer

A) True 
 B)False

Question 3

During a stormy meeting of computer software firms, several company presidents said that without tariff cushions, many of them would go broke. They represent a new industry that needs protection until their firms grow to a size that will allow them to be competitive. Their comments are based on the

Accepted Answer

A)  infant-industry argument.
B)  goal of equalizing the nation's balance of payments.
C)  national self-sufficiency argument.
D)  goal of protecting the health of citizens.
E)  goals of retaliating for another nation's trade restrictions.F) A) and C)
G) A) and E)

Question 4

The United Kingdom sells industrial supplies and materials to many nations around the world. The United Kingdom thus engages in

Accepted Answer

A)  dumping.
B)  tariffing.
C)  importing.
D)  exporting.
E)  deficit trading.F) A) and B)
G) D) and E)

Question 5

All of the following are reasons against having trade restrictions except

Accepted Answer

A)  the loss of jobs.
B)  the misallocation of international resources.
C)  the restriction of consumers' choices.
D)  higher prices for consumers.
E)  the protection of the health of citizens.F) B) and E)
G) B) and C)

Question 6

What is the General Agreement on Tariffs and Trade (GATT)? What is its primary objective?

Accepted Answer

The General Agreement on Tariffs and Tra...

Question 7

U.S. exports to developing and newly industrialized countries

Accepted Answer

A)  have remained stable.
B)  have declined in recent years.
C)  are on the rise.
D)  are prohibited by the U.S.government.
E)  were scheduled to begin in 2009.F) B) and E)
G) B) and C)

Question 8

Which of the following best defines balance of trade?

Accepted Answer

A)  Purchasing products in other countries and bringing them into one's own country.
B)  The total value of a nation's exports minus the total value of its imports over some period of time.
C)  The total flow of money into the country minus the total flow of money out of the country over some period of time.
D)  The ability to specialize in the production of a specific product and trade it for other needed products.
E)  The ability to produce a certain product more efficiently than any other nation.F) A) and E)
G) B) and C)

Question 9

What are multilateral development banks? What is their purpose? Who supports these banks?

Accepted Answer

A multilateral development bank (MDB) is...

Question 10

A favorable balance of payments means that

Accepted Answer

A)  exports exceed imports.
B)  imports exceed exports.
C)  payments exceed trade.
D)  exports and other payments exceed imports and other receipts.
E)  total receipts exceed total payments.F) All of the above
G) A) and E)

Question 11

If Procter & Gamble and Reckitt & Colman, makers of Lysol, form a partnership to develop and distribute a disinfectant line of laundry detergent, the partnership would be a(n)

Accepted Answer

A)  corporation.
B)  joint venture.
C)  monopoly.
D)  licensing agreement.
E)  international alliance.F) A) and E)
G) D) and E)

Question 12

If the United States exports $100 worth of diamonds to the Kingdom of Mocha and imports $80 worth of bows and arrows, it has a(n)

Accepted Answer

A)  unfavorable balance of trade.
B)  trade deficit.
C)  trade surplus.
D)  negative cash flow.
E)  export slide.F) A) and B)
G) A) and C)

Question 13

Which of the following scenarios would not be considered international business?

Accepted Answer

A)  A Chinese manufacturer sells toys to a large toy retailer in the United States.
B)  Intel sells its processors to a computer manufacturer in Korea.
C)  A large jewelry store in England purchases its diamonds from DeBeers in South Africa.
D)  A bearing manufacturer in South Carolina sells its parts to a Toyota plant in Kentucky.
E)  French companies purchase crude oil from Saudi Arabia.F) A) and E)
G) B) and E)

Question 14

It is appropriate for a country to impose trade restrictions on exports that might endanger its national security.

Accepted Answer

A) True 
 B)False

Question 15

An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies is called an economic community.

Accepted Answer

A) True 
 B)False

Question 16

The Doha Round of negotiations is really not worth the effort.

Accepted Answer

A) True 
 B)False

Question 17

If it wants to reduce the dollars flowing out of the country, the United States can limit the number of Japanese cars being imported by imposing a(n)

Accepted Answer

A)  free trade zone.
B)  GATT.
C)  trade deficit.
D)  balance of trade.
E)  import quota.F) C) and D)
G) All of the above

Question 18

When Sony Corporation of Japan purchased Columbia Pictures Entertainment, Inc. of the United States, Sony made a(n)

Accepted Answer

A)  countertrade with Columbia Pictures.
B)  indirect investment in the United States.
C)  direct investment in the United States.
D)  strategic alliance with Columbia Pictures.
E)  exporting agreement with the United States.F) A) and B)
G) A) and C)

Question 19

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) C) and E)
G) A) and B)

Question 20

Buyers that purchase dresses in Europe or calculators in Taiwan and have them shipped back to the United States for resale are engaging in

Accepted Answer

A)  exporting.
B)  shipping.
C)  importing.
D)  expelling.
E)  dumping.F) All of the above
G) A) and C)

Exam 3: Exploring Global Business

It is appropriate for a country to impose trade restrictions on exports that might endanger its national security.

Correct AnswerverifiedShow Answer

If Procter & Gamble and Reckitt & Colman, makers of Lysol, form a partnership to develop and distribute a disinfectant line of laundry detergent, the partnership would be a(n)

Correct AnswerverifiedShow Answer

What are multilateral development banks? What is their purpose? Who supports these banks?

Correct AnswerverifiedA multilateral development bank (MDB) is...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

If it wants to reduce the dollars flowing out of the country, the United States can limit the number of Japanese cars being imported by imposing a(n)

Correct AnswerverifiedShow Answer

U.S. exports to developing and newly industrialized countries

Correct AnswerverifiedShow Answer

During a stormy meeting of computer software firms, several company presidents said that without tariff cushions, many of them would go broke. They represent a new industry that needs protection until their firms grow to a size that will allow them to be competitive. Their comments are based on the

Correct AnswerverifiedShow Answer

All of the following are reasons against having trade restrictions except

Correct AnswerverifiedShow Answer

Which of the following scenarios would not be considered international business?

Correct AnswerverifiedShow Answer

Trading companies do not take title to products.

Correct AnswerverifiedShow Answer

Devaluation decreases the cost of foreign goods and increases the cost of domestic goods to foreign firms.

Correct AnswerverifiedShow Answer

A favorable balance of payments means that

Correct AnswerverifiedShow Answer

Buyers that purchase dresses in Europe or calculators in Taiwan and have them shipped back to the United States for resale are engaging in

Correct AnswerverifiedShow Answer

What is the General Agreement on Tariffs and Trade (GATT)? What is its primary objective?

Correct AnswerverifiedThe General Agreement on Tariffs and Tra...View AnswerShow Answer

When Sony Corporation of Japan purchased Columbia Pictures Entertainment, Inc. of the United States, Sony made a(n)

Correct AnswerverifiedShow Answer

If the United States exports $100 worth of diamonds to the Kingdom of Mocha and imports $80 worth of bows and arrows, it has a(n)

Correct AnswerverifiedShow Answer

The United Kingdom sells industrial supplies and materials to many nations around the world. The United Kingdom thus engages in

Correct AnswerverifiedShow Answer

An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies is called an economic community.

Correct AnswerverifiedShow Answer

The Doha Round of negotiations is really not worth the effort.

Correct AnswerverifiedShow Answer

Which of the following best defines balance of trade?

Correct AnswerverifiedShow Answer

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A multilateral development bank (MDB) is...
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The General Agreement on Tariffs and Tra...
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