Question 1

Central state control does not allow, or limits, private ownership of businesses, and markets are closed because only the government operates all business.

Accepted Answer

In a system with central state control, the government generally owns or heavily regulates all businesses, and markets are often closed or limited for private ownership.

Question 2

_______ refers to the act of exporting goods and services to foreign countries at very low prices, sometimes even below cost, in order to increase market share and potentially leading to putting competitors out of business and then raising prices.
A) Importing
B) Dumping
C) Retaliating
D) Safeguarding
E) Cheating

Accepted Answer

Dumping is the act of exporting goods and services to foreign countries at very low prices, sometimes even below cost, in order to increase market share and potentially leading to putting competitors out of business and then raising prices. This practice is considered illegal under international trade laws.

Question 3

The _______ deals with the global rules of trade between member nations and ensures smooth and predictable operations.
A) World Health Organization
B) International Trade Commission
C) World Trade Organization
D) United Federation of Free Markets
E) Global Business Group

Accepted Answer

The World Trade Organization (WTO) is responsible for global rules of trade, resolving trade disputes, and ensuring smooth operations between member nations. The other answer choices do not have the same focus on trade and commerce.

Question 4

Which of the following is not part of the World Bank Group?
A) the Trilateral Commission.
B) the International Bank for Reconstruction and Development
C) the International Development Association
D) the International Finance Corporation
E) The Multilateral Investment Guarantee Agency

Accepted Answer

The Trilateral Commission is not a part of the World Bank Group. The other options (B-D) are all part of the World Bank Group, along with the Multilateral Investment Guarantee Agency (E).

Question 5

Which of the following is not true of the EU?
A) The EU has its laws (all countries must follow) and state law (each country/state has its own laws) similar to U.S. federal and state laws.
B) The EU has a common currency, the euro, similar to the U.S. dollar.
C) The EU has a central back system under the European Central Bank (ECB), similar to the U.S. Federal Reserve.
D) The EU has a president with similar powers of that of the U.S. president.
E) It is comprised of, at the writing of the textbook, 27 countries.

Accepted Answer

The EU does not have a president with powers similar to the U.S. president. Instead, it has a President of the European Council, who has limited executive power and serves as a spokesperson for the EU.

Question 6

________are designed to eliminate trade barriers to create free trade between countries and groups of countries.
A) trade deficits
B) Trade agreements
C) Trade embargos
D) Trade resolutions
E) Business communities

Accepted Answer

Trade agreements are specifically designed to eliminate trade barriers between countries and groups of countries, with the goal of creating free trade. Trade deficits refer to a situation where a country imports more goods than it exports. Trade embargoes involve restrictions on trade with a specific country. Trade resolutions typically refer to legal or diplomatic decisions aimed at resolving trade disputes. Business communities are groups of businesses that come together to promote their shared interests.

Question 7

________assess the underlying moral justification for businesses' actions and the consequences of those actions.
A) Ethical quandaries
B) Ethical imperialism
C) Ethical dilemmas
D) Environmental impact studies
E) Ethical impact statements

Accepted Answer

Ethical impact statements assess the underlying moral justification for businesses' actions and the consequences of those actions.

Question 8

Which statements about the types of businesses in the global economy are true?
A) An American domestic company conducts business in just one state.
B) An international company is based in one country but transacts business in other countries.
C) A multinational company (MNC) has significant direct investment operations in more than one country.
D) Many domestic companies are importers, and they don't buy or sell foreign products locally.
E) A direct investment refers to owning operating facilities in other countries.

Accepted Answer

The answer of Which statements about the types of businesses...

Question 9

Which statements about U.S. business ownership and government-business relations are true?
A) Governments of major goods-producing countries all behave similarly regarding business and government interaction.
B) The EU and Japan governments do not engage in business ownership.
C) EU and Japanese governments are more like referees with business, much like in the U.S.
D) Democracies are generally more open to capitalism with free enterprise.
E) The U.S. government generally does not own any business enterprises, does not have joint business ownership, and doesn't even invest in company stocks.

Accepted Answer

The answer of Which statements about U.S. business ownership and...

Question 10

Which statements about who benefits and pays the cost of protectionism are true?
A) Although the global economy is moving toward more free trade, it is mixed with protectionism because international trade policy is driven by domestic politics.
B) Society pays the cost of protectionism through decreased efficiency in the allocation and utilization of the country's resources.
C) Society benefits through the government collecting more taxes though keeping foreign goods out of the country.
D) Consumers pay higher prices, with fewer product choices, to finance business profits and employee wages.
E) Isolationism and protectionism tend to work against each other.

Accepted Answer

A) Protectionism is often a result of domestic political pressures, even as the global trend moves towards free trade.B) Protectionism can lead to inefficiencies in how a country uses its resources, as it may not specialize in its comparative advantages.D) Protectionism often results in higher prices for consumers and fewer choices, as it restricts foreign competition to benefit domestic industries.

Question 11

Which statements about the types of trade barriers are true?
A) Subsidies are government funds given to business to lower its cost.
B) Levees are a tax on imports and exports, making them more expensive.
C) Quotas set limits on imports and exports, driving up product prices.
D) Bans prohibit the import or export of products.
E) All countries welcome free trade and place few restrictions on business activity.

Accepted Answer

Subsidies are indeed government funds given to businesses to lower costs. Quotas limit the amount of imports or exports, affecting prices. Bans prohibit certain imports or exports. Levees are not related to trade barriers, and not all countries welcome free trade.

Question 12

Which statements about the WTO, World Bank, and IMF are true?
A) The IMF acts as a monitor of global currency exchange by helping to maintain a system of payments between all countries by setting the fixed value of each currency.
B) The WTO administers trade agreements, develops trade rules, and settles trade disputes between member nations.
C) The World Bank is a lending institution that provides loans and technical assistance to poor countries so that they can conduct trade in the global economy.
D) The World Bank provides loans to poor countries, and the IMF provides currency exchange services and loans to help with the balance of payments between countries to pay for trade.
E) The WTO sets and enforces trade rules without providing any financial services.

Accepted Answer

The answer of Which statements about the WTO, World Bank,...

Question 13

Which statements about grease payments, bribes, and offsets are true?
A) Grease payments involve small amounts of money paid to facilitate employees to do their jobs, usually paid to lower-level employees.
B) Bribes are given to business and government officials for the purpose of getting or maintaining business, usually paid to high-level officials to buy products.
C) All are considered illegal in the U.S. However, under U.S. law, grease payments are not considered illegal in foreign countries.
D) Contingences are government requests to fund non-business projects as a prerequisite to conducting business.
E) Offsets and extortion are basically the same thing.

Accepted Answer

Grease payments are small amounts of money paid to facilitate employees to do their jobs, usually paid to lower-level employees. Bribes are given to business and government officials for the purpose of getting or maintaining business, usually paid to high-level officials to buy products. All three - grease payments, bribes, and offsets - are considered illegal in the U.S. However, under U.S. law, grease payments may be legal in foreign countries. Contingencies and offsets are different things - contingencies are government requests to fund non-business projects as a prerequisite to conducting business, while offsets involve the purchase of goods or services as a condition of a sale. Extortion is also not the same as offsets - it involves the use of threats or violence to obtain something from someone.

Question 14

Identify the four elements of democracy.

Accepted Answer

The answer of Identify the four elements of democracy....

Question 15

Explain competitive theory.

Accepted Answer

The answer of Explain competitive theory....

Question 16

Discuss the concepts of trade deficit and trade surplus and describe the relationship between the two.

Accepted Answer

The answer of Discuss the concepts of trade deficit and...

Question 17

The EU has three important systems that improve trade for member countries, and those who conduct business in the EU. Describe how the EU benefits from these systems.

Accepted Answer

The answer of The EU has three important systems that...

Question 18

The ________ Act directed companies operating in America to set up whistleblower hotlines for employees to report potential corporate abuse.
A) Fair Trade
B) Sherman Anti-Trust
C) Wheeler-Lea
D) Sarbanes-Oxley
E) McCain-Romney

Accepted Answer

The Sarbanes-Oxley Act, passed in 2002, requires publicly traded companies in the United States to establish and maintain internal controls to ensure the accuracy and completeness of their financial statements. It also includes provisions to protect whistleblowers who report potential violations of securities laws, and requires companies to set up whistleblower hotlines for employees to report potential corporate abuse.

Question 19

________ holds that international trade is based on gains from trade.
A) Initialization
B) Competitive theory
C) Comparative advantage
D) Unfair advantage
E) Central state control

Accepted Answer

The answer of ________ holds that international trade is based...

Question 20

China is a Communist country with central planning that has no market economy.

Accepted Answer

It is a Communist country, but it does have a market economy.

Quiz 11: Competing in the Global Environment

Central state control does not allow, or limits, private ownership of businesses, and markets are closed because only the government operates all business.

_______ refers to the act of exporting goods and services to foreign countries at very low prices, sometimes even below cost, in order to increase market share and potentially leading to putting competitors out of business and then raising prices.

The _______ deals with the global rules of trade between member nations and ensures smooth and predictable operations.

Which of the following is not part of the World Bank Group?

Which of the following is not true of the EU?

________are designed to eliminate trade barriers to create free trade between countries and groups of countries.

________assess the underlying moral justification for businesses' actions and the consequences of those actions.

Which statements about the types of businesses in the global economy are true?

Which statements about U.S. business ownership and government-business relations are true?

Which statements about who benefits and pays the cost of protectionism are true?

Which statements about the types of trade barriers are true?

Which statements about the WTO, World Bank, and IMF are true?

Which statements about grease payments, bribes, and offsets are true?

Identify the four elements of democracy.

Explain competitive theory.

Discuss the concepts of trade deficit and trade surplus and describe the relationship between the two.

The EU has three important systems that improve trade for member countries, and those who conduct business in the EU. Describe how the EU benefits from these systems.

The ________ Act directed companies operating in America to set up whistleblower hotlines for employees to report potential corporate abuse.

________ holds that international trade is based on gains from trade.

China is a Communist country with central planning that has no market economy.