Question 1

Which of the following is true of a global firm?

Accepted Answer

A global firm manufactures and markets goods wherever it can do the best job. This means that a global firm does not limit itself to operating in a single country, and instead seeks to take advantage of opportunities in different markets. A global firm also focuses on maximizing efficiency and effectiveness in its operations, rather than being constrained by national boundaries.

Question 2

Which of the following statements is true of industrial economies?

Accepted Answer

Industrial economies typically export manufactured goods and import raw materials from other economies.

Question 3

Japan is a major exporter of manufactured goods,services,and investment funds.Japan also exports its goods to other types of economies for raw materials and semifinished goods.Japan has a(n)________ economy.

Accepted Answer

Japan is known for its highly developed and advanced manufacturing industry, making it an industrial economy. Its GDP is primarily driven by exports of manufactured goods and services, making it one of the world's largest economies. Japan has already undergone significant industrialization and is a mature economy. Therefore, options A, B, D, and E are not applicable.

Question 4

Which of the following is true of raw material exporting economies?

Accepted Answer

Raw material exporting economies are often dependent on one or more primary resources like oil, minerals, or agricultural products. These countries may be rich in resources, but poor in other areas such as technology, infrastructure or education.

Question 5

Restrictive product standards is an example of ________.

Accepted Answer

Restrictive product standards are a type of non-tariff trade barrier. They are technical regulations or product standards that are designed to protect domestic markets or consumers, but can have the effect of restricting trade.

Question 6

________ involves the least change in the company's product lines,organization,investments,or mission.

Accepted Answer

Exporting only involves the shipment of goods or services to a foreign country and does not require significant changes in the company's operations or investments. It is considered the least risky international market entry mode.

Question 7

A subsistence economy is one in which ________.

Accepted Answer

In a subsistence economy, the focus is on producing enough food and goods to meet the basic needs of the people living in the area. This usually involves simple agriculture and traditional methods of production. There is little emphasis on industrialization or exports.

Question 8

An emerging economy is one in which ________.

Accepted Answer

An emerging economy is characterized by fast growth in manufacturing and rapid overall economic growth. This means that the country's manufacturing sector is expanding quickly, which in turn drives economic growth. This growth is typically accompanied by rising standards of living, increased output and productivity, and higher levels of employment.

Question 9

Which of the following is true of exporting?

Accepted Answer

Exporting involves the least change in the company's product lines, as it simply involves selling products from the domestic market in foreign markets without modification. This makes it a relatively simple way to enter a foreign market compared to other methods like licensing or direct investment.

Question 10

The purpose of a quota is to ________.

Accepted Answer

Quotas are designed to protect domestic industries and employment by limiting the amount of imports that can enter a country.

Question 11

An emerging economy is also known as a(n)________ economy.

Accepted Answer

An emerging economy refers to a country that is in the process of becoming more developed, typically through industrialization and modernization. Therefore, the best choice is A) industrializing.

Question 12

Which of the following is true of the World Trade Organization (WTO)?

Accepted Answer

The WTO mediates global trade disputes between member nations, making sure that international trade rules are followed and resolving conflicts that arise. The other choices are incorrect: A) The GATT was replaced by the WTO, not the other way around. B) The WTO actually works to reduce trade barriers, not strengthen them. C) The WTO has been criticized by some, but it has achieved many positive results in terms of global trade liberalization. D) The WTO currently has 164 member nations and there is no restriction on the maximum number of members.

Question 13

Which of the following types of economies consumes most of its output and barters the rest for simple goods and services?

Accepted Answer

A subsistence economy is characterized by producing goods only for personal consumption or for barter with neighboring communities for basic necessities such as food or clothing. It does not involve much money economy and therefore does not have much excess output to trade for other goods and services.

Question 14

The similarity between an industrializing economy and an industrial economy is that both ________.

Accepted Answer

The answer of The similarity between an industrializing economy and...

Question 15

Which of the following is true of free trade zones?

Accepted Answer

Free trade zones are areas where goods can be imported, handled, manufactured, and re-exported without direct intervention from customs authorities, and they are often established to promote trade among member nations.

Question 16

Which of the following is true of the Uruguay Round of the WTO?

Accepted Answer

The Uruguay Round of the WTO, which took place from 1986 to 1994, toughened the international protection of copyrights and patents through the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It aimed to provide a more predictable and stable environment for businesses engaged in intellectual property-driven industries. Therefore, option D is the correct answer. Option A is incorrect because while the Uruguay Round promoted trade liberalization, its objective was not short-term global trade growth. Option B is incorrect because while the Uruguay Round reduced tariffs, it did not reduce them by 50 percent. Option C is incorrect because the TRIPS agreement protected intellectual property. Option E is incorrect because the Uruguay Round concluded in 1994, not 2005.

Question 17

The ________ replaced GATT in 1995 and now oversees the original GATT provisions.

Accepted Answer

The World Trade Organization (WTO) replaced the General Agreement on Tariffs and Trade (GATT) in 1995 and now oversees the original GATT provisions.

Question 18

A country in South America has large reserves of copper and tin.Mining forms the pillar of its economy.A major part of its revenue is generated from exporting these resources.This country is poor in many other ways.It is a good market for large equipment,tools and supplies,and trucks.Since there are many foreign residents in this country and a wealthy upper class,it is also a market for luxury goods.This country has a(n)________ economy.

Accepted Answer

The country's economy is primarily based on exporting its raw materials, which are copper and tin. Therefore, it falls under the category of a raw material exporting economy.

Question 19

Which of the following is an example of nontariff trade barriers?

Accepted Answer

Host-country regulations are a type of nontariff trade barrier because they can make it more difficult for foreign companies to operate in a country.

Question 20

Which of the following most closely describes indirect exporting?

Accepted Answer

Indirect exporting involves working through independent international marketing intermediaries such as export management companies, export trading companies, or distributors. These intermediaries take on the responsibilities of finding and serving foreign buyers, handling documentation, and arranging transportation, among other tasks. This approach can be less risky and can provide a quicker entry into foreign markets compared to setting up an overseas marketing organization or network.

Quiz 15: The Global Marketplace