Deck 9: International Environment of Business

Question 1

Foreign investment occurs when firms of one country build new plants in another country.

Answer 1

True

Question 2

Goods and services that are sold to other countries are called exports.

Answer 2

True

Question 3

A country earns revenue by imposing tariffs on foreign goods.

Answer 3

True

Question 4

When dumping occurs, the price of the goods in a foreign market drops.

Question 5

Tariffs have a tendency to lower the price of foreign products.

Question 6

Nontariff barriers are designed to protect foreign producers.

Question 7

Culture affects how people communicate in a country.

Question 8

When the cost of making goods is lower in foreign countries than at home, it becomes cost effective for companies to buy goods made abroad.

Question 9

Trading blocs have discouraged global trade and investment.

Question 10

The WTO creates and enforces rules governing trade within the United States.

Question 11

The IMF's main purpose is to provide low-cost loans to less-developed countries to develop roads and electric power plants.

Question 12

During the maturity stage of a product, sales decline rapidly.

Question 13

When sales at home begin to lag, American firms have shipped their products overseas.

Question 14

Trade patterns have shifted from goods to services.

Question 15

When more money leaves a country than comes in, a balance of payments surplus occurs.

Question 16

A country is in a weakened position when it continues to sell more in foreign nations than it buys from them.

Question 17

A country with a prolonged trade surplus may find it difficult to pay its bills.

Question 18

Today, both businesses and governments recruit extensively for jobs that require skills useful for international business.

Question 19

The staffing function for international businesses involves evaluating results to determine if the company's objectives have been accomplished.

Question 20

A form of international business whereby firms agree to cooperate on certain aspects of business while remaining competitors on other aspects is a

A) joint venture
B) strategic alliance
C) wholly owned subsidiary
D) host firm

Question 21

The branches of an international firm are called

A) subsidiaries
B) parent firms
C) foreign firms
D) alliances

Question 22

The international organization that creates and enforces rules concerning trade among countries is the

A) European Union
B) International Monetary Fund
C) World Trade Organization
D) World Bank

Question 23

What effect do tariffs have on the prices of foreign products?

A) Prices increase.
B) Prices decrease.
C) Prices increase on some products and decrease on others.
D) Prices increase more than they would with quota restrictions.

Question 24

The value of an English pound relative to the euro is its

A) capital account
B) trade value
C) exchange rate
D) purchasing power

Question 25

What can be said about dumping?

A) The selling price in the foreign country will be above cost.
B) The selling price in the foreign country will be higher than what is charged in the home country.
C) The selling price will not change.
D) The selling price is designed to drive domestic producers out of the market.

Question 26

When an American company allows a Japanese company to produce and sell in Japan a product the American company invented, this arrangement is known as

A) a joint venture
B) exporting
C) a strategic alliance
D) international licensing

Question 27

Before an American company can sell its left-side steering wheel motor vehicles to Ireland, it must change the steering wheel to the right side.This restriction imposed by Ireland is called

A) a sanction
B) a nontariff barrier
C) an embargo
D) an injunction

Question 28

A company is headquartered in the UK with a subsidiary in Qatar.What is Qatar called?

A) the host country
B) the home country
C) the parent country
D) the licensee

Question 29

In a low-context culture such as the United States, communication would likely be

A) vague
B) indirect
C) direct
D) ambiguous

Question 30

American companies cannot conduct business in North Korea because of

A) an embargo
B) high tariffs
C) nontariff barriers
D) government quotas

Question 31

During the start-up phase of foreign operations, firms tend to rely on managers

A) from subsidiaries.
B) who speak the native language.
C) from the host country
D) from the home country.

Question 32

If a U.S.company overproduces, the best way to dispose of its surplus goods profitably is to

A) create a trading bloc to create a demand for the goods
B) sell the surplus goods abroad
C) advertise widely to attract buyers
D) drop the price of the surplus goods to attract buyers

Question 33

When a country specializes in providing products or services more efficiently than can other countries, it is practicing the theory of

A) comparative advantage
B) balance of trade
C) balance of surplus
D) product life cycle

Question 34

Introduction, growth, maturity, and decline are elements of

A) comparative advantage
B) a product's life cycle
C) the balance of trade
D) supply and demand

Question 35

What are the two parts of the balance of payments statement?

A) investment account and capital account
B) current account and budget account
C) investment account and budget account
D) current account and capital account

Question 36

Countries with prolonged trade deficits

A) have no need to restrict foreign business activities in their countries
B) may not have to restrict the outward flow of money
C) may not have to limit international trade
D) may not be able to pay their bills

Question 37

Investment funds coming into and going out of a country are recorded in the

A) current account
B) surplus account
C) capital account
D) deficit account

Question 38

Match each item with the correct statement below.

-Limits placed on the quantity of items permitted to enter a country.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 39

Match each item with the correct statement below.

-Occurs when a government bars companies from doing business with particular countries.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 40

Match each item with the correct statement below.

-Single new currency adopted by many EU members.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 41

Match each item with the correct statement below.

-Goods and services purchased from other countries.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 42

Match each item with the correct statement below.

-Value of one country's currency expressed in the currency of another country.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 43

Match each item with the correct statement below.

-Foreign location where a company has facilities.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 44

Match each item with the correct statement below.

-Taxes on foreign goods that protect domestic industries and earn revenue.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 45

Match each item with the correct statement below.

-Arrangement in which two or more firms share profits and the costs of doing business.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 46

Match each item with the correct statement below.

-Country in which a company has its headquarters.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc

Question 47

Match each item with the correct statement below.

-Foreign branches of a company that are registered as independent legal entities.

A)Embargo
B)exchange rate
C)Euro
D)Exports
E)home country
F)host country
G)imports
H)joint venture
I)parent firm
J)quota
K)sanctions
L)subsidiaries
M)tariffs
N)trading bloc