Question 1

The ________ was created to promote trade through financial cooperation and eliminate barriers by making short-term loans to member nations.&#10;A) World Bank&#10;B) International Bank&#10;C) International Monetary Fund&#10;D) Global Assistance Fund

Accepted Answer

The International Monetary Fund (IMF) was created in 1944 to promote international trade and eliminate barriers to it by providing short-term loans to member nations. The World Bank (A) is also involved in international finance, but its main focus is on long-term development projects and poverty reduction. There is no organization called the International Bank (B) or Global Assistance Fund (D) that fits the description given.

Question 2

A country has a(n) ___________ in making a product for which it can maintain a monopoly or that it can produce at a lower cost than any competitor.&#10;A) Trade surplus&#10;B) Trade deficit&#10;C) Absolute advantage&#10;D) Comparative advantage

Accepted Answer

The term "absolute advantage" refers to a country's ability to produce a specific good or service at a lower cost than any other country. With this advantage, a country can maintain a monopoly in the production of that good or service, allowing it to export and earn profits.

Question 3

One example of a free-trade area that is enacted by the United States, Canada, and Mexico is called&#10;A) Gross Domestic Product.&#10;B) North American Free Trade Agreement.&#10;C) Central America-Dominican Republic Free Trade Agreement.&#10;D) European Union.

Accepted Answer

The North American Free Trade Agreement (NAFTA) is a free trade area enacted by the United States, Canada, and Mexico. It eliminates tariffs on goods traded between the three countries, encourages investment, and promotes trade. The agreement went into effect in 1994 and was later replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020.

Question 4

Before deciding to go global, a company must make many key decisions. Which of the following is not a key decision?&#10;A) Which foreign market(s) to enter&#10;B) The costs of entering a new market&#10;C) Where the product should be produced&#10;D) The best way to organize the overseas operations

Accepted Answer

Where the product should be produced is not a key decision before deciding to go global.

Question 5

In the last decade, many large-scale companies have moved production processes of their products to smaller nations. Many business leaders have chosen to do so as a result of the low production and operation costs in less industrialized areas. This is an example of:

A) Subcontracting
B) A global business strategy
C) Outsourcing
D) Offshoring

Accepted Answer

Moving production processes to smaller nations with lower production and operation costs is an example of offshoring, which involves relocating business operations to another country. Subcontracting involves hiring another company to perform a specific task or project, while outsourcing involves delegating tasks or processes to an outside provider. A global business strategy involves expanding operations to multiple countries, which may or may not involve offshoring or outsourcing.

Question 6

A plan to develop and market products to serve different needs and tastes in separate national markets is called _________________.&#10;A) Global business strategy&#10;B) Multidomestic business strategy&#10;C) International business strategy&#10;D) Foreign business strategy

Accepted Answer

A multidomestic business strategy involves customization and tailoring of products and services to meet the specific needs and preferences of different national markets. This approach acknowledges that consumer preferences and cultural differences vary from country to country and aims to provide localized solutions that are relevant and appealing to each market. This is in contrast to a global business strategy, which focuses on standardization and achieving economies of scale across multiple markets.

Question 7

The automobiles that Canadian manufacturers sell in the United States are ______________, whereas the metals purchased from foreign countries in order to manufacture the automobiles are _______________.

A) Imports, exports
B) Products, materials
C) Sales, investments
D) Exports, imports

Accepted Answer

Canadian manufacturers are exporting their automobiles to the United States, which means the automobiles are considered exports. However, the metals they purchase from foreign countries to manufacture those automobiles are imports. Therefore, the best choice is D, which states that the automobiles are exports and the metals are imports.

Question 8

When a country exports more than it imports, it results in a:&#10;A) Balance of trade&#10;B) Trade deficit&#10;C) Trade surplus&#10;D) Comparative advantage

Accepted Answer

When a country exports more than it imports, it results in a trade surplus, meaning that the country has more goods and services to sell to other countries than it is buying from them. This can lead to an increase in the country's foreign exchange reserves and can also have a positive impact on the country's economic growth and job creation.

Question 9

Why are less developed countries attractive to North American businesses?&#10;A) Their GDP is the same as Canada and the United States.&#10;B) Their per capita incomes are the same as those in Canada and the United States.&#10;C) Businesses want to benefit from local sales as a result of expanding economies and rising standards of living in less developed countries.&#10;D) Businesses can earn higher profits in less developed countries.

Accepted Answer

Businesses are attracted to less developed countries due to the potential for growth in local sales driven by expanding economies and improving standards of living.

Question 10

Which one of the following is not a part of a country's infrastructure:&#10;A) Economic measures&#10;B) Telecommunications&#10;C) Power plants&#10;D) Transportation systems

Accepted Answer

Economic measures are policies and actions related to a country's economy, but they are not physical components of a country's infrastructure. The other options (B, C, and D) refer to physical infrastructure that is essential for a country's functioning.

Question 11

Taxes, surcharges, or duties on foreign products are referred to as:&#10;A) Tariffs.&#10;B) Seeding.&#10;C) Quotas.&#10;D) Dumping.

Accepted Answer

The answer of Taxes, surcharges, or duties on foreign products...

Question 12

Which one of the following is not an organization that promotes international trade?&#10;A) WTO&#10;B) IMF&#10;C) IEC&#10;D) World Bank

Accepted Answer

The answer of Which one of the following is not...

Question 13

________ occurs when there is a drop in a currency's value relative to other currencies or a fixed standard.&#10;A) Exchange rate&#10;B) Payment deficit&#10;C) Imbalance of payments&#10;D) Devaluation

Accepted Answer

The answer of ________ occurs when there is a drop...

Question 14

Which of the following is not a trade restriction?&#10;A) Quotes&#10;B) Embargoes&#10;C) Tariffs&#10;D) Exchange rates

Accepted Answer

The answer of Which of the following is not a...

Deck 4: Competing in World Markets