Deck 4: Competing in World Markets

Question 1

MATCHING

_____ describes the fall of currency's value relative to other currencies.

Answer 1

j

Question 2

What economic factors do firms evaluate when making decisions to operate in other countries?

Answer 2

Business decisions to operate abroad depend on the availability,price and quality of labour,natural resources,capital, and entrepreneurship.Other factors include the country's regulatory and business climate.A country with a large population and rising incomes may be especially attractive.

Question 3

MATCHING

A nation can have a(n)_____ in a product if it can supply it more efficiently and at a lower price.

Answer 3

q

Question 4

MATCHING

A country's _____ is the difference between its exports and imports.

Question 5

Why have Canadian firms become increasingly focused on international business?

Question 6

MATCHING

A(n)_____ uses a standardized product and marketing strategy worldwide.

Question 7

MATCHING

_________ monitors agreements among member nations,mediates disputes,and works to reduce trade barriers throughout the world.

Question 8

MATCHING

_____ refers to selling goods abroad at a price lower than that charged in the domestic market.

Question 9

MATCHING

A limit on the amount of a particular product that a country can import during a specified time period is a(n)_____.

Question 10

Distinguish between absolute advantage and comparative advantage.Provide an example of each.

Question 11

MATCHING

A country's _____ is the overall flow of money into and out of a country.

Question 12

MATCHING

A nation's _____ is the rate at which currency can be exchanged for the currency of another nation.

Question 13

MATCHING

_____ are foreign-made products and services purchased by domestic consumers.

Question 14

MATCHING

A(n)_____ allows a company to share risks,costs,profits,and management responsibilities with another company.

Question 15

MATCHING

The _____ was created to promote trade through financial cooperation,while eliminating barriers in the process.

Question 16

MATCHING

A country has _____ in the marketing of a product if it has a monopolistic position or it produces the product at the lowest cost.

Question 17

MATCHING

A(n)_____ is a tax levied on imported products.

Question 18

MATCHING

A(n)_____ develops and markets products to serve different needs and tastes of separate national markets.

Question 19

MATCHING

Countries establish a __________ where they can trade among themselves without trade barriers.

Question 20

MATCHING

Relocation of business processes to a lower-cost location overseas is known as ___________.

Question 21

Discuss why the World Trade Organization (WTO)has been the object of controversy in recent years.What concerns have been expressed?

Question 22

What is dumping? How do countries counteract this practice?

Question 23

If the Canadian dollar gets stronger relative to the euro,what is the effect for Canadian exports and imports to and from European countries?

Question 24

A large part of the Canadian economy's growth comes from ________.

A) petroleum exports
B) computer technology
C) the export and import of goods and services
D) production of consumer electronic products

Question 25

Los Angeles-based PMI Telecom purchases cell phones manufactured in Asia and sells them in the United States.PMI is engaging in the international business activity known as ________.

A) dumping
B) exporting
C) countertrade
D) importing

Question 26

Jorge owns a men's watch company and is looking to market his product overseas.Which international business strategy would you recommend to him and why?

Question 27

When a company operates in other countries,it ________ risk.

A) spreads out
B) increases
C) eliminates
D) has no impact on

Question 28

Discuss the advantages of the North American Free Trade Agreement (NAFTA).

Question 29

Explain the differences between the World Bank and the International Monetary Fund.

Question 30

Define countertrade,and explain why this form of international trade is a viable option for certain nations.

Question 31

Explain the advantages and disadvantages of imposing trade restrictions.

Question 32

Identify and describe the major types of obstacles confronting international trade.

Question 33

Identify three important decisions a business must make before deciding to go global.

Question 34

Describe three contractual agreements firms can enter into when going global.

Question 35

Distinguish between a global strategy and a multidomestic strategy for marketing goods in other nations.

Question 36

AusterTech,a German company,produces computer parts and sells them to South American countries.AusterTech is engaging in the international business activity known as ________.

A) dumping
B) exporting
C) countertrade
D) importing

Question 37

Computers that are manufactured in Japan and sold in Norway are categorized as Japanese ________.

A) imports
B) exports
C) countertrades
D) outsourcing

Question 38

Explain the concept of floating exchange rates.Identify factors that influence foreign exchange rates.

Question 39

During the past 10 years,the value of Canadian imports and exports has ________.

A) decreased
B) remained about the same
C) more than doubled
D) risen slightly

Question 40

Discuss the various levels of involvement in international business.

Question 41

A balance of payments deficit occurs when ________.

A) imports exceed exports
B) the net inflow of money from abroad exceeds the net outflows of money to other countries
C) exports exceed imports
D) the net outflow of money from a country exceeds the net inflow of money from abroad

Question 42

Which of the following would result from devaluation of the Canadian dollar?

A) Canadian goods would sell for less abroad.
B) The cost of foreign vacations for Canadian citizens would be reduced.
C) Foreign firms would have to pay more to purchase Canadian assets.
D) Canadian goods would be more expensive for American consumers.

Question 43

Even though Canada manufactures textiles,China is able to produce them more efficiently.Thus,China has a(n)________________ in manufacturing textiles.

A) tariff
B) trade restriction
C) comparative advantage
D) quota

Question 44

During the past decade,which of the following countries has experienced the greatest annual rate of GDP growth?

A) United States
B) China
C) Canada
D) Japan

Question 45

A country with a balance of payments surplus means ________.

A) monetary inflow exceeds monetary outflow
B) monetary outflow exceeds monetary inflow
C) imports exceed exports
D) exports exceed imports

Question 46

The country Artesia exported products totaling $86 billion last year.During the year,Artesia ?imported products valued at $43 billion.Artesia has a(n)________.

A) exchange rate of 2 to 1
B) trade deficit of $43 billion
C) trade surplus of $43 billion
D) unfavourable balance of payments

Question 47

Because of its climate and terrain,Guatemala possesses a ___________ over Canada in coffee production.

A) higher GDP
B) higher standard of living
C) comparative advantage
D) absolute advantage

Question 48

Which of the following statements is true regarding comparative advantage?

A) Comparative advantage is becoming rarer these days.
B) Every country possesses an absolute advantage.
C) Developing countries possess no comparative advantage.
D) A nation must first possess an absolute advantage in a particular area before it can gain a comparative advantage.

Question 49

Many developing nations have lower per capita incomes than highly developed countries.This fact ________.

A) indicates that they represent an insignificant market for most products
B) means that the developing nations are unlikely to experience much economic growth
C) does not mean there is little opportunity for sales
D) means that they are only likely to purchase low-tech merchandise

Question 50

Which of the following statements is true regarding absolute advantage?

A) Developing countries possess no absolute advantage.
B) A nation must first possess a comparative advantage before it can possess an absolute advantage.
C) Absolute advantage is becoming rarer these days.
D) Every country possesses an absolute advantage.

Question 51

An absolute advantage occurs when a country can maintain ________.

A) a monopoly by outlawing foreign imports
B) a monopoly by levying high taxes on imports
C) a monopoly by being the lowest-cost producer of a good or service
D) its advantage by producing a good or service more efficiently

Question 52

A country's exchange rate is based on ________.

A) the rate at which its currency can be exchanged for currencies of other countries
B) the number of foreign banks it has
C) tariffs and related trade restrictions
D) the relationship between its imports and exports

Question 53

A country has a good chance of selling more of its goods abroad if it ________.

A) increases the value of its currency
B) more tourists decide to travel abroad
C) devalues its currency
D) sets high tariffs on imported goods

Question 54

A Japanese insurance company purchases U.S.government securities.From the perspective of the United States,the balance of trade with Japan will ________ and the balance of payments with Japan will ________.

A) not change;improve
B) not change;get worse
C) improve;improve
D) improve;get worse

Question 55

Allison,a Canadian citizen,travels to Europe and spends $2,000 on souvenirs.She is contributing to the ________.

A) Canadian trade surplus
B) Canadian balance of payments deficit
C) Canadian balance of payments surplus
D) growing exchange rate

Question 56

Which of the following groups is likely to be hurt economically if the value of the Canadian dollar rises relative to the euro?

A) Canadian tourists visiting Europe
B) European firms exporting goods to Canada
C) Canadian farmers exporting goods to Europe
D) Canadian firms with euro-dominated loans

Question 57

All of the following are included in the top five nations Canada trades with EXCEPT ________.

A) Japan
B) United States
C) China
D) Mexico

Question 58

Although people in developing nations have lower per capita incomes than more highly developed nations,their __________ represents a lucrative market for global trade.

A) infrastructure
B) technology
C) population
D) political stability

Question 59

In 2010 Canada had a trade surplus with which of the following items?

A) machinery and equipment
B) other consumer goods
C) agricultural and fishing products
D) automotive products

Question 60

A trade deficit occurs when ________.

A) imports exceed exports
B) foreign-aid payments exceed exports
C) imports are sold at low profits
D) there is a net flow of money into a country

Question 61

The hypothetical country of Austrica requires foreign companies that buy and sell Austrica products to use only Austrica currency in these transactions.Austrica is using ________ as a means of controlling international trade.

A) governmentally granted rights
B) exchange control
C) international currency trading
D) local banks

Question 62

Assume a nation has a comparative advantage in the production of clothing.If the value of this country's currency rises,________.

A) its comparative advantage will increase
B) its comparative advantage will stay the same
C) its comparative advantage will decrease
D) an absolute advantage will be created

Question 63

Patents,trademarks,and intellectual property are important concerns in the ___________ environment.

A) economic
B) political
C) legal
D) cultural

Question 64

Dumping _________ domestic consumers and _________ domestic producers.

A) harms,benefits
B) harms,harms
C) benefits,harms
D) benefits,benefits

Question 65

Which of the following statements is true regarding hard currencies?

A) Countries with hard currency typically use the barter system when exporting goods.
B) The U.S.dollar is an example of hard currency.
C) Hard currency is difficult to convert into other currency.
D) A country with hard currency is likely to have a trade deficit.

Question 66

If a foreign company offers steel in Canada below the company's cost of production,the company might be accused of ________.

A) dumping
B) protective tariffs
C) an import quota
D) a managed trade agreement

Question 67

_________ are a common trade restriction imposed by the government on agricultural products.

A) Exchange controls devaluation
B) Embargos
C) Quotas
D) Foreign trade zone

Question 68

A foreign-made household appliance is popular and is highly competitive with the same product manufactured domestically.To give the domestic industry a better chance to operate profitably,the government restricts the number of these appliances that can be imported by applying a(n)________.

A) import quota
B) embargo
C) protective tariff
D) revenue tariff

Question 69

A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese.This is an example of ________.

A) an exchange control
B) an import quota
C) a protective tariff
D) dumping

Question 70

The Corruption of Foreign Public Officials Act:

A) mediates trade disputes among trade agreement member nations
B) funds projects that build or expand a nation's infrastructure
C) prescribes fines and jail times for managers who are aware of bribe activity
D) promotes trade through financial cooperation

Question 71

Maria is the Middle Eastern sales manager for a large company.She avoids giving pork products and wine to Arab customers as gifts.Maria is being sensitive to ________.

A) religious differences
B) language differences
C) differences in consumer habits
D) differences in business practices

Question 72

Goto,Inc.is trying to establish a supplier relationship with a parts manufacturer in a small Asian country.Filipe,the purchasing manager,is attempting to get to know the general manager and staff of the company to help finalize the agreement.Filipe is attempting to overcome what type of barrier?

A) physical barrier
B) tariff restriction
C) exchange controls
D) cultural barrier

Question 73

The purpose of __________ is to make imports more expensive for domestic buyers.

A) dumping
B) exchange controls
C) embargos
D) tariffs

Question 74

All of the following constitute a country's infrastructure EXCEPT ________.

A) political climate
B) communication
C) energy facilities
D) transportation

Question 75

In recent years,the value of the dollar relative to the euro has declined.What does this mean for European businesses exporting to Canada?

A) European countries are more likely to import Canadian goods or services.
B) The Canadian trade deficit will most likely become greater.
C) Canada is more likely to increase imports from European countries.
D) European countries are more likely to avoid trade with Canada.

Question 76

The hypothetical country of Eurica is experiencing severe competition to its domestic auto
Industry in the form of foreign imports.Many jobs are threatened.Eurica places a 25 percent tariff on the price of imported cars.This type of tariff is known as a(n)________ tariff.

A) revenue
B) quota
C) infant industry
D) protective

Question 77

All of the following are social and cultural barriers EXCEPT ________.

A) language
B) gift-giving traditions
C) religious attitudes
D) currency shifts

Question 78

The objective of an import quota is to ________.

A) prevent dumping
B) raise revenue for the government
C) protect domestic industries
D) ban the importation of certain goods

Question 79

An understanding of religious holidays is essential in order to overcome ________ international trade barriers.

A) physical
B) cultural
C) political
D) legal

Question 80

Tyra spent a two-week vacation in Italy and purchased more than $1,000 worth of Venetian glass.Upon returning to Canada,she was required to pay a ________ on the items.

A) customs tax
B) protective tariff
C) revenue tariff
D) exchange rate tax