Deck 4: Competing in World Markets

Question 1

The value of imports and exports within Canada has remained steady over the past ten years.

Answer 1

True

Question 2

Due to its highly educated workforce and low labour costs, India has a comparative advantage in software development.

Answer 2

True

Question 3

Canada tends to maintain a balance between exports and imports.

Answer 3

True

Question 4

GDPs of China and India have decreased in recent years.

Question 5

People in developing nations have lower per capita incomes than people in developed nations.

Question 6

A country's comparative advantage is measured only in manufactured goods.

Question 7

A superior education system can lead to a comparative advantage in human resources.

Question 8

A country's trade balance is determined by comparing the total amount of its exports to its imports.

Question 9

A trade deficit exists when a nation's imports exceed its exports.

Question 10

A country that can produce goods for less than any other country has an absolute advantage.

Question 11

Trading with other countries significantly increases a company's risk.

Question 12

Less-developed countries represent a lucrative market for Canadian firms because of their huge population.

Question 13

Importing refers to selling domestically produced goods and services in foreign countries.

Question 14

Gross domestic product (GDP) growth in the United States is higher than GDP growth in any other country.

Question 15

If a nation has an unfavourable balance of trade, it also has an unfavourable balance of payments.

Question 16

Trading internationally allows companies to spread their risks.

Question 17

Much of Canada's trade with the United States is resource-based.

Question 18

A favourable balance of trade is known as a trade surplus.

Question 19

Depending on a country's own resources, without seeking opportunities in other countries, is a good economic move.

Question 20

The majority of the world's population lives in less-developed countries.

Question 21

Cultural sensitivity is especially essential in cyberspace because visitors to the Web can come from any part of the world.

Question 22

A nation's exchange rate is the rate at which its currency can be exchanged for goods and services.

Question 23

Along with transportation and energy facilities, access to the Internet is part of a nation's infrastructure.

Question 24

The EU bans imports of any U.S. agricultural product that has been treated with growth hormones. In response, the United States triples tariffs on imports of selected European products. This would be an example of a protective tariff.

Question 25

Because exchange rates are volatile, they are of little use to U.S. companies when establishing prices for their products overseas.

Question 26

A revenue tariff is designed to raise funds for the government.

Question 27

Compared with Canada, Europeans value employee benefits more than low unemployment and business efficiency.

Question 28

A weak euro benefits European exporters.

Question 29

Economically speaking, unlike countries included in the EU, Canada is a national market with a single economy.

Question 30

Spanish is the most widely spoken language in the world.

Question 31

The fluctuations in the exchange rate depends partly on the supply and demand for each currency in the world market.

Question 32

If the value of the Canadian dollar falls relative to the U.S. dollar, Canadian exports to the United States should increase.

Question 33

An import quota is an example of a cultural barrier to global business.

Question 34

The Corruption of Foreign Public Officials Act regulates the payment of bribes by Canadian firms to officials in foreign countries where such practices are customary.

Question 35

The European Union leads the world in international trade.

Question 36

Currencies that can be easily converted into other currencies are called soft currencies.

Question 37

A Canadian company operating in the European Union (EU) is required to adhere to European regulations, such as mandatory vacation time.

Question 38

If a country that produces wine enacts a tariff on imported wine to match the country's domestic wine price, this would be an example of a protective tariff.

Question 39

National governments sometimes take deliberate action to devalue their currencies as a way to increase exports and stimulate foreign investment.

Question 40

Exchange rates are set by the various national governments.

Question 41

The International Monetary Fund (IMF) provides emergency loans to member nations which are NOT able to meet its expenses.

Question 42

If the price of an imported product sells for more in Canada than it does in the producing country, the producing country could be accused of dumping.

Question 43

Tariffs and quotas are the same.

Question 44

The International Monetary Fund (IMF) was created to promote trade through financial cooperation.

Question 45

All countries in Europe are now members of the European Union (EU).

Question 46

If the Canadian government engaged in protectionism, the policies will help to open up a Canadian market to foreign companies.

Question 47

A joint venture strategy provides the most basic level of international involvement, with the least risk and control.

Question 48

When McDonald's franchises into foreign countries, they are engaging in direct international investment.

Question 49

Countertrade is another term for international bartering.

Question 50

To balance the budget for 2016, a developing country such as Ghana CANNOT borrow money from the international community to finance some of its expenses.

Question 51

The WTO makes decisions that are binding on member nations involved in disputes.

Question 52

Trade among the NAFTA nations has changed little since the adoption of the agreement.

Question 53

Controversies regarding the World Trade Organization (WTO) include pollution and human rights abuses.

Question 54

A firm in the Czech Republic buys U.S. agricultural products, paying for the products with crude oil. This is an example of countertrade.

Question 55

Since NAFTA, Canadian trade with Latin American countries has tripled.

Question 56

U.S. sugar producers welcomed the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) because relaxed trade rules with Central America drove prices higher.

Question 57

Indirect exporting involves producing a component for a product that is subsequently exported.

Question 58

Exchange controls affect both exporters and importers.

Question 59

The government of a less-developed country wants to build several new healthcare facilities in rural areas and improve port facilities to promote exports. The World Bank might lend money to help the country finance these construction projects.

Question 60

The North American Free Trade Agreement (NAFTA) is a trade accord designed to reduce trade restrictions between the two neighbouring countries of the United States and Canada.

Question 61

Under a multidomestic strategy, each national market is treated differently.

Question 62

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 63

The sale by Toyota of its Camry model throughout the world is an example of a global business strategy.

Question 64

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

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

Question 65

A global strategy and a multidomestic strategy are the same.

Question 66

When Microsoft relocates its customer call centre to India, it is using offshoring.

Question 67

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 68

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

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

Question 69

One advantage of using foreign subcontractors is that firms have almost total control over the business practices of their subcontractors.

Question 70

A joint venture is a contractual form of international investment.

Question 71

A global marketing approach is ideal for marketing luxury items due to their universal appeal.

Question 72

One strategy for entering international market is by franchising.

Question 73

A SWOT analysis will help an organization to develop a framework from which to conduct international business.

Question 74

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 75

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 76

Nearshoring is the best way to enter international markets.

Question 77

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 78

A global business strategy involves separate product and marketing strategies that vary from one nation to another.

Question 79

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 80

One advantage of a licensing agreement is that little or no investment is required to begin operating.