Question 1

The Foreign Corrupt Practices Act:

Accepted Answer

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from providing bribes or kickbacks to foreign officials or politicians in order to gain a business advantage. It was passed in order to combat corruption in international business transactions.

Question 2

The objective of quotas is to _____.

Accepted Answer

The answer of The objective of quotas is to _____.
...

Question 3

Assume a nation has a comparative advantage in the production of clothing. If the value of this country's currency rises, _____.

Accepted Answer

If the value of the country's currency rises, its exports will become more expensive for other countries, making it less competitive in the global market. This will decrease its comparative advantage in the production of clothing.

Question 4

The hypothetical country of Rhodia requires foreign companies that buy and sell Austrica products to use only Rhodia currency in these transactions. Austrica is using _____ as a means of controlling international trade.

Accepted Answer

Austrica is using exchange control as a means of controlling international trade by requiring foreign companies to use only Rhodia's currency in transactions involving Austrica products. Exchange control refers to government regulations or policies that limit or regulate foreign exchange transactions within a country, including restrictions on currency conversion and the use of foreign currencies.

Question 5

All of the following constitute a country's infrastructure EXCEPT _____.

Accepted Answer

The political climate of a country is not considered part of its physical infrastructure, but rather a separate factor that can affect the country's overall development and progress.

Question 6

Tyra spent a two-week vacation in Italy and purchased more than $1,000 worth of Venetian glass. Upon returning to the United States, she was required to pay a _____ on the items.

Accepted Answer

A revenue tariff is a tax on imported goods that is designed to generate revenue for the government. Since Tyra purchased items while she was in Italy and then imported them into the United States, she would be required to pay a revenue tariff on those items. The other options listed - protective tariff, service tax, and exchange rate tax - do not accurately describe the type of tax Tyra would be required to pay in this situation.

Question 7

All of the following are social and cultural barriers EXCEPT _____.

Accepted Answer

Currency shifts are not considered social or cultural barriers, as they are typically financial issues that can affect business transactions. Language, religious attitudes, and gift-giving traditions are all examples of social and cultural barriers that can impact communication and relationships in cross-cultural business dealings.

Question 8

In recent years, the value of the dollar relative to the euro has declined. What does this mean for European businesses exporting to the United States?

Accepted Answer

The answer of In recent years, the value of the...

Question 9

A foreign-made household appliance is popular and is highly competitive with the same product manufactured domestically. To give the domestic industry a better chance to operate profitably, the government restricts the number of these appliances that can be imported by applying a(n) _____.

Accepted Answer

A quota is a restriction on the quantity of imports allowed into a country. In this case, the government is limiting the number of foreign-made household appliances that can be imported in order to give domestic producers a better chance to compete and operate profitably. An embargo is a complete ban on imports from a particular country or on a particular product, and is not applicable in this scenario. A protective tariff is a tax imposed on imports to protect domestic producers from foreign competition, but in this scenario, the government is imposing a restriction on the quantity of imports rather than a tax. A revenue tariff is a tax on imports, but the purpose of such a tax is to generate revenue rather than to protect domestic producers, so it is not applicable in this scenario either.

Question 10

If a foreign company offers steel in the United States below the company's cost of production, the company might be accused of _____.

Accepted Answer

When a foreign company offers its products in the United States at a price below the cost at which it sells in its home market, it is known as "dumping." Dumping is usually done with the intention of driving domestic producers out of business and capturing a larger share of the market.

Question 11

Patents, trademarks, and intellectual property are important concerns in the _______environment.

Accepted Answer

Intellectual property is protected under legal frameworks, making legal environment the most suitable choice.

Question 12

The purpose of ______is to make imports more expensive for domestic buyers.

Accepted Answer

Tariffs are taxes imposed on imported goods, which increase the price of these goods for domestic buyers. This serves as a protectionist measure to make domestically produced goods more competitive by making imported goods more expensive.

Question 13

A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese. This is an example of _____.

Accepted Answer

A protective tariff is a tax imposed on imported goods to raise their price, making them less attractive to domestic consumers and therefore protecting domestic producers from foreign competition. In this scenario, the tariff on imported cheese aims to increase its price above the price of domestically produced cheese, making the latter more appealing to consumers.

Question 14

Dumping _____domestic consumers and _____domestic producers in an importing market.

Accepted Answer

The answer of Dumping _____domestic consumers and _____domestic producers in...

Question 15

Goto, Inc., a U.S. based company, is trying to establish a supplier relationship with a parts manufacturer in a small Asian country. Filipe, the purchasing manager, is attempting to get to know the general manager and staff of the company to help finalize the agreement. Filipe is attempting to overcome what type of barrier?

Accepted Answer

Filipe is trying to establish a relationship with the general manager and staff of the parts manufacturing company, indicating a need to overcome a cultural barrier. Cultural differences can impact communication, business practices, and relationship-building, which can create challenges for companies trying to establish cross-border relationships.

Question 16

Which of the following statements is true regarding hard currencies?

Accepted Answer

Hard currency refers to a currency that is widely accepted in international trade and is easily convertible into other currencies. The U.S. dollar is one of the most widely accepted hard currencies in the world. Option A is incorrect because countries with hard currencies do not typically use barter system for exporting goods. Option C is incorrect because if a currency is difficult to convert into another currency, it is considered a soft currency. Option D is incorrect because countries with hard currency are more likely to have a trade surplus rather than a trade deficit as their currency is in high demand for international transactions.

Question 17

An understanding of religious holidays is essential in order to overcome _____ international trade barriers.

Accepted Answer

Religious holidays are a part of the culture of a country or a community and can impact business activities. A lack of understanding and respect for these holidays can create cultural barriers and hinder successful international trade. Political, physical, and legal barriers may also exist, but they are not directly related to religious holidays.

Question 18

Maria is the Middle Eastern sales manager for a large company. She avoids giving pork products and wine to Arab customers as gifts. Maria is being sensitive to _____.

Accepted Answer

Maria's decision to avoid giving pork products and wine to Arab customers indicates that she is being sensitive to religious differences, specifically the Muslim prohibition against consuming pork and alcohol.

Question 19

The hypothetical country of Eurica is experiencing severe competition to its domestic auto industry in the form of foreign imports. Many jobs are threatened. Eurica places a 25 percent tariff on the price of imported cars. This type of tariff is known as a(n) _____ tariff.

Accepted Answer

A protective tariff is designed to protect domestic industries from foreign competition by raising the price of imports through a tax or tariff. This is often done to safeguard jobs and industries in the home country. In this case, Eurica is placing a 25 percent tariff on imported cars to protect its domestic auto industry from foreign competition.

Question 20

_____limit the amounts of particular products that countries can import during specified time periods.

Accepted Answer

Quotas are a tool of trade policy used to restrict imports, typically by limiting the amount of a particular product that can be imported during a specified time period. This is often done to protect domestic producers from foreign competition or to address imbalances in trade flows.

Quiz 4: Competing in World Markets