Deck 3: Global Business

Question 1

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.What type of tax has the Italian government imposed on the company?

A) Export duty
B) Embargo
C) Revenue tariff
D) Protective tariff
E) Nontariff barrier

Answer 1

D

Question 2

Because it controls the world's diamond deposits, the DeBeers Consolidated Mines, Ltd., has a(n)

A) absolute advantage.
B) comparative advantage.
C) advantage based on efficient production.
D) trade deficit.
E) lot of diamonds.

Answer 2

A

Question 3

A new country is formed in central Africa.It has no absolute advantage in crude oil, diamonds, or wool.However, it does manufacture high-quality bows and arrows for specialised safari adventures.Which of the following statement is true?

A) The new country should try to produce its own crude oil, diamonds, and wool.
B) The new country has a comparative advantage in the production of bows and arrows.
C) The new country has an unqualified advantage in the production of bows and arrows.
D) The new country has a determined advantage in the production of arrows.
E) The new country is engaged in dumping bows and arrows.

Answer 3

B

Question 4

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture.The company wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognised, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.
After all the research was completed, the senior managers realised that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
Refer to Lynn Bernerd, Inc.Which of the following alternatives could have worked as a link between the managers at Lynn Bernerd, Inc.and the buyer from a different country?

A) International barter
B) Counter trade
C) Trading company
D) Comparative trader
E) Foreign-exchange control

Question 5

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.What type of tax has the Brazilian government imposed on the company?

A) Import duty
B) Embargo
C) Revenue tariff
D) Protective tariff
E) Nontariff barrier

Question 6

Because Saudi Arabia and Australia have ____, Saudi Arabia can specialise in the production of crude oil and petroleum products, and Australia can specialise in the production of wool.

A) a company advantage
B) an absolute advantage
C) a comparative advantage
D) an effective manufacturing system
E) very low labor costs

Question 7

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture.The company wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognised, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.
After all the research was completed, the senior managers realised that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
Refer to Lynn Bernerd, Inc.Initially, the managers believed that ____ would be the best option for entering the foreign market.

A) Exporting
B) creating a joint venture
C) Licencing
D) establishing a strategic alliance
E) a merger

Question 8

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

A) Relative
B) Absolute
C) comparative
D) Superior
E) Inferior

Question 9

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

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.

Question 10

How has international trade changed since the end of World War II?

A) Trade across national borders has decreased since its peak during the early to mid-1900s.
B) International trade has increased steadily since this period of time.
C) The amount of international trading has remained relatively stable since this time.
D) International trade has become completely unrestricted.
E) International trading has become much more heavily regulated and restricted by all countries.

Question 11

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

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.

Question 12

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture.The company wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognised, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.
After all the research was completed, the senior managers realised that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
Refer to Lynn Bernerd, Inc.Which agency should the managers at Lynn Bernerd, Inc.seek assistance from?

A) GATT
B) Trade Information Centre
C) World Trade Organisation
D) U.S.Export Assistance Centres
E) U.S.and Foreign Commercial Services

Question 13

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.Because the company is known for its ability to produce lawn furniture more efficiently than any other company in the world, the company must have a(n) ____ advantage.

A) Total
B) Relative
C) Comparative
D) Proportional
E) Absolute

Question 14

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

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.

Question 15

Although it lacks sources of timber and oil, Chablis has a plentiful supply of grapes for its many wineries.Which statement about Chablis is true?

A) It has a comparative advantage in wine production.
B) It has a comparative advantage in timber and oil production.
C) It has an absolute advantage in the production of wine.
D) It has an absolute advantage in timber and oil production.
E) It has no comparative or absolute advantages.

Question 16

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.Landing Service must have contacted which of these organisations to mediate regarding unfair treatment by foreign governments?

A) MDB
B) GATT
C) WTO
D) EU
E) OPEC

Question 17

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture.The company wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognised, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.
After all the research was completed, the senior managers realised that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
Refer to Lynn Bernerd, Inc.Which of the following options is not one of the steps needed for entering an international market?

A) Contact local government to see if taxes on trade can be waived.
B) Establish an overseas distribution network.
C) Set export prices and payment terms, methods, and techniques.
D) Identify key foreign markets for the product.
E) Identify exportable products.

Question 18

____ is the ability to produce a specific product more efficiently than any other product.

A) Absolute advantage
B) Specialisation
C) Relative advantage
D) Dominant advantage
E) Comparative advantage

Question 19

Lynn Bernerd, Inc.
Lynn Bernerd, Inc., manufactures and sells reclining furniture.The company wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognised, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.
After all the research was completed, the senior managers realised that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
Refer to Lynn Bernerd, Inc.When the transport carriers notify the exporter that the product has been shipped, they use a

A) bill of lading.
B) receipt.
C) letter of credit.
D) draft.
E) shipping verification.

Question 20

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

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

Question 21

Which of the following best defines balance of trade?

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 specialise 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

Question 22

If Germany exports $100,000 of sauerkraut to Jamaica and purchases $100,000 of Blue Mountain coffee beans from Jamaica, Germany has

A) an overall favourable balance of trade.
B) an overall unfavourable balance of trade.
C) a favourable balance of trade with Jamaica.
D) neither a favourable nor an unfavourable balance of trade with Jamaica.
E) an unfavourable balance of trade with Jamaica.

Question 23

Selling and shipping raw materials or products to other nations is called

A) exporting.
B) alien trading.
C) importing.
D) tariffing.
E) deficit trading.

Question 24

When Johnson & Johnson Vision Care, Inc., located in Jacksonville, Florida, sells its ACUVUE contact lenses to people in London, England, the company

A) is importing the lenses.
B) is exporting the lenses.
C) has an absolute advantage.
D) is increasing the balance-of-trade deficit.
E) is making a big mistake.

Question 25

If the United States exports $100 worth of timber to Nigeria and imports $80 worth of diamonds, the United States has a(n)

A) unfavourable balance of trade.
B) trade deficit.
C) trade surplus.
D) negative cash flow.
E) export slide.

Question 26

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

A) trade surplus.
B) favourable balance of trade.
C) favourable exchange role.
D) unfavourable balance of trade.
E) favourable balance of payments.

Question 27

General Motors and Ford products produced in the United States can be found in many countries around the world.The United States is ____ these automobiles.

A) Tariffing
B) Importing
C) Exporting
D) Releasing
E) Dumping

Question 28

Purchasing products or materials in other nations and bringing them into one's own country is

A) trading.
B) balancing.
C) exporting.
D) importing.
E) dumping.

Question 29

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

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

Question 30

If the Republic of Trinidad and Tobago had total exports of $150 billion and total imports of $234 billion, the country had a

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

Question 31

Nordstrom sells designer suits made in Italy in its stores in the UK.Nordstrom is ____ suits.

A) Exporting
B) Importing
C) Trading
D) Dumping
E) Taxing

Question 32

An unfavourable balance of trade occurs when

A) exports are greater than imports.
B) imports are greater than exports.
C) the total outflow of money is greater than the total inflow of money.
D) the total outflow of money is less than the total inflow of money.
E) exports equal imports.

Question 33

When chain of organic coffee shops in Portland purchases coffee from Colombia, it

A) is importing the coffee.
B) is exporting the coffee.
C) has an absolute advantage.
D) is decreasing the balance-of-trade deficit.
E) is making a big mistake.

Question 34

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

A) trade deficit.
B) favourable balance of trade.
C) unfavourable exchange rate.
D) unfavourable balance of trade.
E) unfavourable balance of payments.

Question 35

The United States buys automobiles from Japan and Germany and petroleum products from many OPEC nations.The United States thus engages in

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

Question 36

An unfavourable trade balance is called a(n)

A) balance of trade.
B) trade deficit.
C) currency devaluation.
D) balance of payments.
E) import balance.

Question 37

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

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

Question 38

A small country is just beginning its international trade activities.In so doing, it wants to ____ and to develop a favourable balance of trade.

A) provide markets for its products
B) have its name in the Wall Street Journal
C) have its exports taxed
D) be involved in international politics
E) control the governments of other countries

Question 39

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

A) exporting.
B) shipping.
C) importing.
D) expelling.
E) dumping.

Question 40

Sangeeta purchases a Turkish rug from a local rug gallery in Dallas, Texas.Which of the following best describes this transaction?

A) Sangeeta is a consumer, and the retailer imported the rug from Turkey.
B) Sangeeta is a consumer, and the retailer exported the rug from Turkey.
C) The original rug manufacturer from Turkey imported the materials to make the rug.
D) Sangeeta is a direct importer in this situation because she is purchasing a product made in Turkey.
E) Sangeeta is a direct exporter in this situation because the money she is spending will go to manufacturers in Turkey.

Question 41

The payments portion of the balance of payments-that is, payments made by the UK-does not include

A) exports.
B) imports.
C) military spending.
D) foreign aid.
E) investments.

Question 42

When the UK levies a tax on textiles from India, this tax is a type of

A) export duty.
B) barter.
C) import.
D) tariff.
E) responsibility.

Question 43

When the UK levies a tax on coffee from Ecuador, this type of tax is a(n)

A) export duty.
B) barter.
C) import.
D) tariff.
E) responsibility.

Question 44

Japanese tourists come to experience the magic of Disney World and other attractions around Orlando, Florida.These tourists are

A) contributing to the United States' deficit balance of payments.
B) helping increase the balance of payments for Japan.
C) exporting products and services back to Japan.
D) further decreasing the United States' balance of payments.
E) helping the United States' balance of payments.

Question 45

____ is the exportation of large quantities of a product at a price lower than that of the same product in the home market.

A) Embargo
B) Duty
C) Dumping
D) Export quota
E) Dropping

Question 46

An import duty has the effect of all of the following except

A) reducing the number of units exported.
B) raising the price of the product in the importing nation.
C) reducing the number of units imported.
D) creating a trade restriction.
E) protecting a domestic industry from competition.

Question 47

China is selling school supplies in the UK for very low prices, even lower than the prevailing prices in China, and thus making it extremely difficult for British manufacturers to compete.This is referred to as

A) exporting.
B) importing.
C) an embargo.
D) dropping.
E) dumping.

Question 48

Any measure imposed by a government to favour domestic products over foreign products not involving taxes is a(n)

A) import duty.
B) nonmonetary restriction.
C) embargo.
D) restriction of trade.
E) nontariff barrier.

Question 49

When Serena from the United States flies to Scotland on a Canadian airline, stays in an Edinburgh hotel, and buys many wool sweaters from Scotland to bring home, she is

A) decreasing the trade deficit of the United States.
B) contributing to the positive balance of payments of the United States.
C) contributing to the negative balance of payments of the United States.
D) buying imported goods.
E) contributing to the GDP of the United States.

Question 50

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 country's

A) trade deficit.
B) balance of payments.
C) unfavourable balance.
D) balance of trade.
E) favourable balance.

Question 51

The U.K.government imposes a tax on imported automobiles from Japan, Korea, Germany, and other foreign nations to increase government funds.This is best described as a(n)

A) protective tariff.
B) revenue tariff.
C) dumping duty.
D) import quota.
E) excise tax.

Question 52

Taiwanese manufacturers are dumping toys in Germany.What will happen to German toy manufacturers if the German government allows this dumping to continue?

A) They will be faced with the highest demand ever.
B) They will become more competitive.
C) They will be put out of business because they cannot compete with the prices.
D) They will try to dump their toys in other countries.
E) Their revenues will decrease, but their long-term success will not be affected.

Question 53

The United States bans Cuban cigars and other Cuban products from entering the United States due to political difficulties.This action is called a(n)

A) embargo.
B) import quota.
C) trade ban.
D) foreign-exchange control.
E) import duty.

Question 54

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)

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

Question 55

Suppose France imposes a tax on agricultural products from the UK to help its own farmers.This describes a(n)

A) revenue tariff.
B) preservation tariff.
C) embargo.
D) nontariff barrier.
E) protective tariff.

Question 56

The UK wishes to import no more than 100 million tons of sugar from India in any given year.The type of import restriction it should impose is a(n)

A) import duty.
B) foreign exchange control.
C) import quota.
D) embargo.
E) export duty.

Question 57

A favourable balance of payments means that

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.

Question 58

The Saudi Arabian government does not allow the consumption of alcoholic beverages within its country.The Saudi Arabian government is imposing a(n)

A) import quota.
B) currency devaluation.
C) prohibition.
D) embargo.
E) dumping restriction.

Question 59

Another name for an import duty is a(n)

A) tariff.
B) embargo.
C) devaluation.
D) quota.
E) limitation.

Question 60

Balance of payments is a ____ concept than balance of trade.

A) more difficult
B) less difficult
C) nearly identical
D) Broader
E) Narrower

Question 61

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

A) infant-industry argument.
B) goal of equalising 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.

Question 62

A complete halt to trading with a particular nation or in a particular product is called a(n)

A) embargo.
B) stoppage.
C) stay.
D) closure.
E) barricade.

Question 63

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

A) embargos.
B) currency devaluations.
C) import quotas.
D) quality import restrictions.
E) bureaucratic red tape.

Question 64

At present, the United States has an embargo against North Korea because

A) North Korean products are too difficult to use.
B) products from North Korea are in higher demand than American-made products.
C) North Korea has an embargo on American products.
D) North Korea will not adopt a capitalist government.
E) the two countries have extremely poor political relations.

Question 65

A currency devaluation increases the cost of foreign goods and ____ the cost of domestic goods to foreign firms.

A) Devalues
B) Increases
C) Balances
D) decreases
E) Restricts

Question 66

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

A) free trade zone.
B) GATT.
C) trade deficit.
D) balance of trade.
E) import quota.

Question 67

A restriction on the amount of a particular foreign currency that can be purchased or sold is a

A) monetary export control.
B) nontariff barrier.
C) currency devaluation.
D) currency control.
E) foreign-exchange control.

Question 68

When a country's currency is devalued, this ____ the cost of foreign goods and ____ the cost of domestic goods to foreign firms.

A) increases; decreases
B) reduces; reduces
C) decreases; increases
D) neutralises; raises
E) neutralises; decreases

Question 69

After the sharp drop in oil prices, the a nation considers enacting a tariff on imported oil.According to proponents, such a tariff would do all of the following except

A) help reduce the federal budget deficit.
B) help strengthen the foreign trade deficit.
C) prop up a sagging domestic oil industry.
D) help cut the foreign trade deficit.
E) create a trade restriction.

Question 70

UK automakers are concerned about the availability of so many foreign cars to their consumers, and that their chances to sell their own cars are limited.To directly correct the situation, they encourage Congress to impose a(n)

A) export quota.
B) export duty.
C) import quota.
D) tariff.
E) import duty.

Question 71

The UK wants to limit the amount of sterling that another country can obtain.The best way to accomplish this is to

A) impose an import duty.
B) establish a foreign-exchange control.
C) declare an embargo.
D) set an import quota.
E) impose an export duty.

Question 72

When an Indian importing firm wants to import U.K.-made products, it must first secure permission and money from the Reserve Bank of India.This type of restriction is known as a

A) currency devaluation.
B) foreign-exchange control.
C) negative foreign exchange.
D) trade embargo.
E) quota.

Question 73

Arguments for imposing trade restrictions include

A) the misallocation of international resources.
B) equalising a nation's balance of payments.
C) higher prices for consumers.
D) restriction of consumers' choices.
E) none of the above.

Question 74

The United States does not sell fighter jets, such as F-16s, to Libya.The rationale for this restriction is most likely to

A) protect national security.
B) protect domestic jobs.
C) protect the health of its citizens.
D) retaliate for Libya's trade restrictions.
E) protect domestic manufacturers.

Question 75

Arguments for the government imposing restrictions on foreign trade include

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.

Question 76

In addition to political considerations, all of the following are reasons for trade restrictions except

A) equalising a nation's balance of payments.
B) protecting new and weak industries.
C) protecting the health of citizens.
D) protecting national security.
E) all of the above are correct.

Question 77

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

A) a currency devaluation.
B) a reduced exchange rate.
C) a deficit money market.
D) a compressed economy.
E) none of the above.

Question 78

Because it has not been around long enough to establish itself, the Russian automobile industry could be classified as a(n)

A) hopeless industry.
B) soft industry.
C) infant industry.
D) protected industry.
E) toddler industry.

Question 79

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

A) shows that to foreigner 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.

Question 80

If the U.K government will not allow meat from another country to be marketed in the UK, it is imposing a(n)

A) quota.
B) devaluation.
C) tariff.
D) duty.
E) embargo.