Question 1

Jimland's government has severe restrictions toward the entry of foreign companies into the country. A foreign company interested in Jimland would have to purchase an existing company in order to conduct its business there. Hence, companies can only enter Jimland through a _____.
A) strategic alliance
B) direct foreign investment
C) direct export
D) joint venture

Accepted Answer

The statement mentions that the government of Jimland has severe restrictions towards the entry of foreign companies, allowing them only to purchase an existing company. This limitation only allows for foreign companies to carry out direct investment in Jimland. Therefore, the correct choice is B. Strategic alliances, joint ventures, and direct export would not be possible according to the scenario.

Question 2

The difference between voluntary export restraints and quotas is that:
A) unlike quotas, voluntary export restraints limit the amount of a product that can be imported annually.
B) unlike quotas, voluntary export restraints are imposed by the importing company.
C) unlike quotas, voluntary export restraints limit the amount of a product that can be exported annually.
D) unlike quotas, voluntary export restraints are imposed by the exporting company.

Accepted Answer

Voluntary export restraints are trade restrictions on the quantity of a good that an exporting country is allowed to export to another country. They are imposed by the exporting country, often at the importing country's request, whereas quotas are imposed by the importing country.

Question 3

In the context of nontariff barriers, _____ include government loans, grants, and tax deferments given to domestic companies to protect them from foreign competition.
A) export restraints
B) embargoes
C) quotas
D) subsidies

Accepted Answer

Subsidies are given to domestic companies to protect them from foreign competition. These can include government loans, grants, and tax deferments. Export restraints, embargoes, and quotas are all different types of nontariff barriers, but they do not specifically refer to government aid to domestic companies.

Question 4

Hutlot Corp., a clothing company in the country of Pretnola, bought a small clothing company named Midlews in the country of Limlouth. Hutlot is going to sell its own designs through Midlews, and it believes that this venture will be extremely successful. This scenario is an example of _____.
A) strategic alliance
B) direct foreign investment
C) direct export
D) joint venture

Accepted Answer

This scenario is an example of direct foreign investment, as Hutlot Corp. has purchased a company in another country to expand its business operations there.

Question 5

The _____ is a worldwide trade agreement that reduced and eliminated tariffs, limited government subsidies, and established protections for intellectual property.
A) Asia-Pacific Economic Cooperation
B) General Agreement on Tariffs and Trade
C) Tripartite Free Trade Agreement
D) Maastricht Treaty

Accepted Answer

The General Agreement on Tariffs and Trade (GATT) is a trade agreement that was signed by 23 nations in 1947, and later expanded to include over 120 nations. It aimed to reduce and eliminate tariffs, and establish protections for intellectual property. The GATT was replaced by the World Trade Organization (WTO) in 1995, although many of its principles and agreements were incorporated into the WTO. The other options (A, C, D) are not relevant to the description given in the question.

Question 6

_____ are defined as nontax methods of increasing the cost or reducing the volume of imported goods.
A) Nontariff barriers
B) Grants
C) Nonresident barriers
D) Quorums

Accepted Answer

Nontariff barriers are a type of trade barrier that uses methods other than tariffs to restrict imports, such as quotas, regulations, and other tactics that increase the cost or decrease the volume of imported goods. Grants are a form of financial assistance, nonresident barriers are not a recognized term in international trade, and quorums are related to voting procedures and not trade barriers.

Question 7

Oldhust Corp., an electronics company in the country of Bigmount, bought Specden Corp., an electronics company in the country of Vertholt. This scenario is an example of _____.
A) strategic alliance
B) direct foreign investment
C) direct export
D) joint venture

Accepted Answer

This scenario is an example of direct foreign investment, as Oldhust Corp. is investing in and acquiring Specden Corp. in a foreign country (Vertholt). Strategic alliance would involve two companies partnering together for a specific purpose, joint venture would involve two companies forming a new entity together, and direct export would involve Oldhust Corp. simply selling its products to Vertholt without any ownership or investment in a company there.

Question 8

_____ is a government's use of trade barriers to shield domestic companies and their workers from foreign competition.
A) Protectionism
B) Developmentalism
C) Economic nationalism
D) Centralism

Accepted Answer

Protectionism refers to the government's use of trade barriers such as tariffs, import quotas, and subsidies to protect domestic industries and workers from foreign competition. Developmentalism and economic nationalism are related concepts but do not specifically refer to trade barriers. Centralism is not a term commonly used in economics or international trade.

Question 9

Bardron, an information technology company in the country of Conimount, wanted to start its business in the country of Bertholt. Hence, it bought Lecden Corp, a severely underperforming information technology company in the country of Bertholt. This scenario is an example of _____.
A) strategic alliance
B) direct foreign investment
C) direct export
D) joint venture

Accepted Answer

Bardron's purchase of Lecden Corp in a foreign country constitutes direct foreign investment, as the company is investing in and establishing a presence in a foreign market through the acquisition of an existing company.

Question 10

Which of the following statements is true of the World Trade Organization (WTO)?
A) It ensures that trade between nations flows as predictably and freely as possible.
B) It transforms different economies and currencies into one common economic market.
C) It aims to create a unified South America by permitting free movement between nations.
D) It aims to establish regions in Europe as a single market by eliminating all tariffs by 2019.

Accepted Answer

The World Trade Organization (WTO) does not transform economies into a common economic market nor aim to create a unified South America. Its main goal is to promote and ensure free and predictable trade between nations. As for eliminating tariffs in Europe, this is a goal of the European Union, not the WTO.

Question 11

In the context of nontariff barriers, which of the following is a similarity between quotas and voluntary export restraints?
A) Both impose a complete ban on any kind of trade with a specific country.
B) Both limit the amount of a product that can be imported annually.
C) Both are imposed by the exporting country rather than the importing country.
D) Both levy a direct tax on imported goods.

Accepted Answer

Both quotas and voluntary export restraints limit the amount of a particular product that can be imported into a country, thereby restricting trade.

Question 12

_____ are specific limits on the number or volume of imported products.
A) Tariffs
B) Quotas
C) Subsidies
D) Embargoes

Accepted Answer

Quotas are specific limits on the number or volume of imported products. Tariffs refer to taxes levied on imported goods, subsidies refer to financial assistance given by the government to domestic industries, and embargoes refer to a complete ban on trade with a particular country or group of countries.

Question 13

Unlike nontariff barriers, tariffs _____.
A) decrease the cost of exported goods
B) increase the cost of imported goods
C) are direct taxes on imported goods
D) are nontax methods of reducing the volume of imported goods

Accepted Answer

Tariffs are direct taxes on imported goods, while nontariff barriers are other methods of reducing the volume of imported goods that are not taxes. Option A is incorrect because tariffs increase the cost of imported goods, not decrease the cost of exported goods. Option B is correct as it correctly identifies that tariffs increase the cost of imported goods. Option D is incorrect because tariffs are not nontax methods of reducing the volume of imported goods.

Question 14

DepDevs, an investment company in the country of Onimount, has purchased several small companies in Primelom, a third world country. DepDevs plans to revive these companies by investing their funds in them and improving their performances in the market. This scenario is an example of _____.
A) strategic alliance
B) direct foreign investment
C) direct export
D) joint venture

Accepted Answer

The scenario describes DepDevs purchasing small companies in a foreign country with the intention of improving their performance, which fits the definition of direct foreign investment. Strategic alliance involves a partnership between two or more companies, joint venture involves two or more companies forming a new entity, and direct export involves selling goods directly to a foreign market. None of these accurately describe the scenario presented.

Question 15

PriemCrest, an oral care company in the country of Holtmont, bought an oral care company called SerenCrest in the country of Hofstadden. This scenario is an example of _____.
A) strategic alliance
B) direct foreign investment
C) direct export
D) joint venture

Accepted Answer

This scenario is an example of direct foreign investment because PriemCrest has purchased another company in another country, Hofstadden. Strategic alliance would be a partnership between two companies while joint venture is a type of partnership in which both companies contribute resources to create a new entity. Direct export would involve selling products to another country without investing in the local market.

Question 16

Lochmonden already has a company registered under the name of CreateOne. The Aldemeren company with the same brand name was not able to enter Lochmonden market. Hence, the Aldemeren CreateOne had to start a new company in the name of OneCreate to enter the market in Lochmonden. This scenario is an example of _____.
A) strategic alliance
B) direct foreign investment
C) direct export
D) joint venture

Accepted Answer

This scenario is an example of direct foreign investment, where a company establishes a new entity in a foreign market to operate under a different name due to trademark or brand name conflicts.

Question 17

Which of the following trade barriers is established to protect the health and safety of citizens?
A) Tariffs
B) Quotas
C) Government import standards
D) Voluntary export restraints

Accepted Answer

Government import standards are established to regulate the quality, safety, and health aspects of imported products to protect citizens. These standards may include restrictions on the use of certain chemicals, labeling requirements, and inspections of goods before importation. Tariffs and quotas are primarily established to protect domestic industries from international competition, while voluntary export restraints are agreements between two countries to limit the quantity of exports to protect domestic industries.

Question 18

Which of the following best defines a tariff?
A) It is a specific limit on the volume of imported goods.
B) It is a direct tax on imported goods.
C) It is a complete ban on trade of a certain item.
D) It is a limit on the number of products exported to a particular country.

Accepted Answer

A tariff is a tax imposed on imported goods, meant to raise their price and make domestic products more competitive.

Question 19

Which of the following is a regional trade agreement between most European countries?
A) The Maastricht Treaty of Europe
B) The Single European Act
C) The EEC and EURATOM treaties
D) The Treaty of Brussels

Accepted Answer

The answer of Which of the following is a regional...

Question 20

Aldhurst Corp., a software manufacturing firm in Lochmount, a European country, bought Fairden Corp., a software manufacturing firm in Vertholt, an Asian country. This scenario is an example of _____.
A) a strategic alliance
B) direct foreign investment
C) licensing
D) a joint venture

Accepted Answer

This scenario is an example of direct foreign investment, as Aldhurst Corp. has acquired a controlling interest in Fairden Corp. by purchasing the company. A strategic alliance would involve a partnership or collaboration between the two companies, but not necessarily a takeover. Licensing would involve one company granting permission to another to use its intellectual property, but again, not a takeover. A joint venture would involve two companies forming a new entity together, rather than one company acquiring another.

Quiz 8: Global Management

Jimland's government has severe restrictions toward the entry of foreign companies into the country. A foreign company interested in Jimland would have to purchase an existing company in order to conduct its business there. Hence, companies can only enter Jimland through a _____.

The difference between voluntary export restraints and quotas is that:

In the context of nontariff barriers, _____ include government loans, grants, and tax deferments given to domestic companies to protect them from foreign competition.

Hutlot Corp., a clothing company in the country of Pretnola, bought a small clothing company named Midlews in the country of Limlouth. Hutlot is going to sell its own designs through Midlews, and it believes that this venture will be extremely successful. This scenario is an example of _____.

The _____ is a worldwide trade agreement that reduced and eliminated tariffs, limited government subsidies, and established protections for intellectual property.

_____ are defined as nontax methods of increasing the cost or reducing the volume of imported goods.

Oldhust Corp., an electronics company in the country of Bigmount, bought Specden Corp., an electronics company in the country of Vertholt. This scenario is an example of _____.

_____ is a government's use of trade barriers to shield domestic companies and their workers from foreign competition.

Bardron, an information technology company in the country of Conimount, wanted to start its business in the country of Bertholt. Hence, it bought Lecden Corp, a severely underperforming information technology company in the country of Bertholt. This scenario is an example of _____.

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

In the context of nontariff barriers, which of the following is a similarity between quotas and voluntary export restraints?

_____ are specific limits on the number or volume of imported products.

Unlike nontariff barriers, tariffs _____.

DepDevs, an investment company in the country of Onimount, has purchased several small companies in Primelom, a third world country. DepDevs plans to revive these companies by investing their funds in them and improving their performances in the market. This scenario is an example of _____.

PriemCrest, an oral care company in the country of Holtmont, bought an oral care company called SerenCrest in the country of Hofstadden. This scenario is an example of _____.

Which of the following trade barriers is established to protect the health and safety of citizens?

Which of the following best defines a tariff?

Which of the following is a regional trade agreement between most European countries?

Aldhurst Corp., a software manufacturing firm in Lochmount, a European country, bought Fairden Corp., a software manufacturing firm in Vertholt, an Asian country. This scenario is an example of _____.