Deck 4: The Global Context of Business

Question 1

High-income countries include the United States, Canada, Japan, and Kuwait.

Answer 1

True

Question 2

The United States represents the world's most stable economy.

Answer 2

True

Question 3

Factors of production include labor, capital, entrepreneurs, physical resources, and information resources.

Answer 3

True

Question 4

A tariff is a tax on imported and/or exported products.

Question 5

Middle-income countries suffer from low literacy, weak infrastructures, and unstable governments.

Question 6

One very large category of U.S. products that travels well is American popular culture.

Question 7

International firms are those that conduct business abroad with most focus being on business here in this country.

Question 8

The value of Country X's imports is greater than the value of its exports. Country X has a ______.

A) trade surplus
B) trade deficit
C) negative balance of trade
D) B and C

Question 9

Which form of competitive advantage tends to focus on natural resources and labor costs?

A) licensing arrangements
B) national competitive advantage
C) comparative advantage
D) absolute advantage

Question 10

A firm may have more direct control with a _____ than with a(n) _____.

A) licensing arrangement; foreign direct investment
B) branch office; licensing arrangement
C) branch office; independent agent
D) B and C

Question 11

Which of the following is identified as a low-income nation?

A) Vietnam
B) Great Britain
C) Kuwait
D) New Zealand

Question 12

According to the authors of your textbook, since its founding, NAFTA has resulted in _____.

A) an increase in U.S. exports to Mexico and Canada and a decrease in U.S. imports from Mexico and Canada
B) an increase in U.S. exports to Mexico and Canada and an increase in U.S. imports from Mexico and Canada.
C) an increase in U.S. exports to Mexico, a decrease in U.S. exports to Canada, and a decrease in imports from Mexico and Canada.
D) a decrease in U.S. exports to Mexico and Canada and a decrease in imports from Mexico and Canada.

Question 13

The United States has comparative advantages in _____.

A) the computer industry
B) farming
C) electronics manufacturing
D) A and B

Question 14

American _____ can be profitably exported to many other countries.

A) umbrellas
B) apparel
C) popular culture
D) snowmobiles

Question 15

Other than income level, what other characteristics define low-income countries?

Question 16

In considering "playing by the rules" in foreign direct investment, what are some sociocultural factors that might affect "how things are done" abroad?

Question 17

One American manager of a branch office in Stockholm, Sweden, stated, "We are living in a shrinking, borderless world." What do you think he meant?

Question 18

In gauging international demand, a company should consider whether products need to be adapted to the international market. Explain.

Question 19

Some elements from the political-legal environment can affect the sociocultural environment of a country. Explain.