Deck 3: Competing in the Global Marketplace

Question 1

Mines in Colombia produce emeralds and sell them to jewelers in the United States.To Colombia miners, emeralds are an export.

Answer 1

True

Question 2

The tax that the United States imposes on imported carbon steel products is called a tariff.

Answer 2

True

Question 3

Telecommunications equipment manufacturers in the United States sell their products to people who live in Canada.To Canadians, the telecommunications equipment is an export.

Answer 3

False

Question 4

When a domestic company allows a foreign firm to use its brand in exchange for royalty fees, it is called a joint venture.

Question 5

When a country sells its products in a foreign country at a cheaper price than usual, and sometimes even at a loss, it is dumping products.

Question 6

International trade-dependent jobs have grown at a rate three times the growth of U.S.-dependent jobs.

Question 7

Limitations on the quantity of certain types of goods that can be imported over a period of time are called import quotas.

Question 8

The difference in value between a country's imports and exports is called its balance of trade.

Question 9

Having a global vision simply means having a willingness to sell outside one's national borders if, and when, the opportunity arises.

Question 10

According to the principle of absolute advantage, each country should specialize in the products that it can produce most readily and cheaply and trade those products for products that foreign countries can produce most readily and cheaply.

Question 11

The exchange rate is the interest rate that foreign banks receive when borrowing money from the United States.

Question 12

A countertrade in international terms pertains to the sale of retail goods that are usually sold "over the counter."

Question 13

In international licensing, the licensor is the domestic firm that allows the licensee to use its trademark or brand.

Question 14

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

Question 15

The Uruguay Round of trade negotiation is an agreement that only affects trade among Latin American countries.

Question 16

If Syria gives Lebanon a tariff advantage over other countries, Lebanon has been given a biased tariff.

Question 17

The signing of the Central America Free Trade Agreement by the United States will more than likely not result in a major increase of U.S.exports.

Question 18

When Coca-Cola sends cases of Coke to France and receives sparkling water as payment, a countertrade has taken place.

Question 19

The opposite of free trade is protectionism.

Question 20

Armenia had a favorable balance of trade in 2018 when it exported $800 million in goods and services and imported $1.5 billion.

Question 21

The U.S.has one of the very few areas in the world where kaolin can be mined.Kaolin is a necessary ingredient in many products ranging from stomach medication to paper.The U.S.-produced kaolin is sold all over the world.Kaolin is a(n) _____ for the countries that purchase it.

A)embargo
B)tariff
C)import
D)export
E)countertrade

Question 22

_____ are products that are bought from one country for use in another just as the U.S.buys wood pulp and timber from Canada.

A)Imports
B)Tangibles
C)Tariffs
D)Exports
E)Countertrades

Question 23

In 2018, Country A exported $84.9 billion and imported products valued at $74.69 billion.The difference between the dollar value of its exports and imports represents a:

A)positive exchange rate
B)positive balance of payment
C)trade surplus
D)trade deficit
E)positive countertrade

Question 24

Some multinational corporations are so large that they resemble small countries.

Question 25

A well-designed product transcends cultural barriers.It does not need to be changed to suit different countries or cultures.

Question 26

A company that has a global vision:

A)recognizes and reacts to international business opportunities
B)is interested in nothing more complicated than exporting
C)follows its competition into foreign markets
D)has a very nationalistic view of the world
E)does not see competition from foreign marketers as a threat

Question 27

The need for businesses to expand their markets is one of the most fundamental reasons for the growth in world trade.

Question 28

Canadian logging companies sell timber in the United States.To the U.S., the timber is a(n)_____, and for Canadians, the timber is a(n) _____.

A)import; countertrade
B)import; export
C)export; exchange
D)export; import
E)countertrade; exchange

Question 29

In 2018, Rwanda exported $98 million and imported products valued at $243 million.Rwanda has a(n):

A)unfavorable balance of trade
B)negative balance of payment
C)negative balance of trade
D)negative trade deficit
E)positive trade deficit

Question 30

A country that exports more goods than it imports is said to have a(n):

A)favorable balance of payment
B)negative trade deficit
C)favorable balance of trade
D)unfavorable balance of trade
E)positive trade deficit

Question 31

How has terrorism affected global trade?

A)Terrorism has curtailed the liberal inflows of skilled and blue-collar workers.
B)Terrorism has led to tighter emigration policies.
C)Terrorism has resulted in merchandise be moved more quickly across nations.
D)Companies are stocking less inventory than ever before.
E)Terrorism has not affected global trade.

Question 32

The Blue Bird Bus Company in Georgia sells buses to the South African government.To South Africa, these buses are an example of:

A)intangibles
B)tariffs
C)countertrades
D)exports
E)imports

Question 33

In 2018, Austria exported $122.5 billion and imported products valued at $118.8 billion.Austria had a(n):

A)favorable balance of trade
B)positive balance of payment
C)negative balance of trade
D)negative trade deficit
E)positive trade deficit

Question 34

Botswana produces diamonds, copper, nickel, soda ash, meat, and textiles, which it sells to the members of the European Union.To Botswana, the diamonds, copper, nickel, soda ash, meat, and textiles it produces are examples of:

A)embargo
B)tariff
C)import
D)export
E)countertrade

Question 35

_____ are goods and services that are made in one country and sold to other countries.

A)Tangibles
B)Imports
C)Tariffs
D)Countertrades
E)Exports

Question 36

Expropriation is a political risk in which a country seizes the assets of a foreign firm and does not compensate the firm.

Question 37

The _____ is defined as the difference in value of a country's exports and imports over a period of time.

A)balance of trade
B)federal deficit
C)federal surplus
D)balance of exchange
E)balance of payments

Question 38

A country that imports more goods than it exports is said to have a(n):

A)positive trade surplus
B)positive balance of payment
C)favorable balance of trade
D)unfavorable balance of trade
E)positive trade deficit

Question 39

One of the advantages multinational corporations have over other companies is their ability to sidestep regulatory difficulties.

Question 40

The United States buys copper from Chile's Escondido copper mine.The copper is used to make wiring for the U.S.telecommunications industry and for many other purposes.For the U.S., the copper is an example of a(n):

A)embargo
B)tariff
C)import
D)export
E)countertrade

Question 41

Protectionism:

A)prohibits tariffs, embargoes, and import quotas
B)allows people to buy and sell where they please
C)is based on the concept of absolute advantage
D)uses artificial barriers to protect domestic industries
E)encourages free trade

Question 42

In 2006, the nation of Zimbabwe reduced the value of its currency by 60 percent to bring its value more in line with the relative value of most other world currencies.This reduction of value is called:

A)deregulation
B)re-evaluation
C)devaluation
D)comparative disadvantage
E)exchange ratio

Question 43

If a country specializes in goods that it can produce most readily and cheaply and trades those goods for the goods that another country can produce most readily and cheaply, then both countries are exercising the principle of:

A)absolute advantage
B)economics of scale
C)distinctive advantage
D)parallel competencies
E)comparative advantage

Question 44

Venezuela can grow and sell cut flowers for floral bouquets more easily and more cheaply than most other countries can produce the same flowers.When it comes to flowers, Venezuela has a(n):

A)total advantage
B)advantageous competency
C)absolute advantage
D)core strength
E)comparative advantage

Question 45

Imagine you are trying to gather the information needed to calculate the balance of payments for an Eastern European country.To do your calculations, you would need to have information on all of the following EXCEPT:

A)foreign aid the country receives
B)military expenditures it makes in other countries
C)its imports and exports
D)its corporate tax rates
E)tourist spending in the country

Question 46

In 2018, if the country of Serbia had imports of $10.58 billion and had an unfavorable balance of trade.This means that Serbia had:

A)less than $10.58 billion in exports
B)exactly $10.58 billion in exports
C)more than $10.58 billion in exports
D)low inflation
E)an unfavorable exchange rate

Question 47

The _____ is the total amount of money that flows in and out of a country.

A)balance of trade
B)federal deficit
C)balance of payments
D)balance of exchange
E)international exchange

Question 48

Free trade:

A)allows companies to conduct business without licenses
B)permits people to buy and sell where they please
C)establishes artificial barriers to trade
D)is also called protectionism
E)relies on bartering as its primary means of exchange

Question 49

A policy of permitting the people of a country to buy and sell where they please, without restrictions, is called:

A)comparative advantage
B)premium exchange
C)protectionism
D)specialization
E)free trade

Question 50

In 2018, Country A exported $1.237 billion and imported products valued at $5.552 billion. The difference between the dollar value of its exports and imports represents a:

A)positive exchange rate
B)positive balance of payment
C)trade surplus
D)trade deficit
E)positive countertrade

Question 51

The _____ is the value of one currency in terms of another.

A)balance of trade
B)exchange rate
C)balance of payments
D)investment exchange
E)favorable rate

Question 52

All of the following terms are associated with international trade EXCEPT:

A)absolute advantage
B)balance of payments
C)balance of trade
D)discount rate
E)comparative advantage

Question 53

The difference between a country's total payments to other countries and its total receipts from other countries is called its:

A)balance of trade
B)financial surplus
C)financial deficit
D)balance of exchange
E)balance of payments

Question 54

When Ted Giovanni was preparing for his trip to Brazil, he found that he could go to his bank and trade his 10 U.S.dollars for 37.11 Brazilian real (the nation's currency).In this instance, the _____ was one U.S.dollar to 3.711 Brazilian real.

A)exchange rate
B)balance of payments
C)foreign trade rate
D)international trade rate
E)balance of trade rate

Question 55

In 2018, the country of Brazil, had imports of $78.02 billion and had a favorable balance of trade.This means that Brazil had:

A)less than $78.02 billion in exports
B)exactly $78.02 billion in exports
C)more than $78.02 billion in exports
D)low inflation
E)an unfavorable exchange rate

Question 56

Canada is currently the second largest producer of nickel in the world.The reopening of the world famous Voisey's Bay mine, which has total resources estimated at 124 million tons of nickel-bearing ore, should give Canada a clear:

A)total advantage
B)advantageous competency
C)absolute advantage
D)core strength
E)comparative advantage

Question 57

_____ is the reduction of a currency's value relative to another currency.

A)Evaluation
B)Devaluation
C)Currency leveling
D)Deregulation
E)Exchange depreciation

Question 58

Since the balance of payments is the summary of a country's financial transactions with another country, a discussion of a nation's balance of payments will need to include a discussion of:

A)its imports and exports
B)its long-term overseas business investments
C)its government loans
D)its gifts and foreign aid
E)all of the above

Question 59

The karakul is a breed of Central Asian sheep that produces curly, glossy wool.This wool is popular in some countries for the manufacturing of warm hats and coats.Since the breed can only be grown in Central Asia, this region can be said to have a(n):

A)absolute advantage
B)advantageous distinction
C)comparative advantage
D)total advantage
E)economy of scale

Question 60

Currency markets operate under a system called _____.This means that prices of currencies vary based upon demand and supply of that currency.

A)variable trade
B)variable costs
C)international trade rate
D)floating exchange rate
E)breakeven point

Question 61

Japan bans importation of rice to protect its domestic rice industry.This ban is an example of:

A)free trade
B)ethnocentricity
C)dumping
D)countertrading
E)protectionism

Question 62

Why do many people fear trade and globalization?

A)Trade and globalization will increase per capita income.
B)An open economy spurs innovations with fresh ideas from abroad.
C)Many fear trade and globalization will lead to massive job losses.
D)Free trade and globalization lead to increased productivity.
E)Export jobs often pay less than other jobs.

Question 63

The Royal Government of Bhutan imposes a 10 percent tax on all operating tables, examination tables, and dentist's chairs imported into Bhutan.Another name for this type of tax is a(n):

A)embargo
B)boycott
C)subsidy
D)quota system
E)tariff

Question 64

A(n) _____ is a tax levied by a nation on imported goods.

A)embargo
B)tariff
C)premium
D)boycott
E)subsidy

Question 65

An argument in favor of protective tariffs is the "infant-industry argument," which states that:

A)any industry dealing with products for infants should be protected
B)infant-industries need government loans
C)infant-industries should be protected by tariffs from established foreign competition
D)infant-industries should be exempt from antitrust laws
E)infant-industries should be able to form monopolies

Question 66

The Caucasus Mountains along the northeastern border of Georgia (one of the former Soviet republics) makes it difficult for the nation to trade with other former Soviet republics that are to its north and east.The mountain range acts as a(n):

A)natural embargo
B)infrastructure deterrent
C)marketing barrier
D)natural blockage
E)natural trade barrier

Question 67

Shell Oil Company used Intertek Caleb Brett, an Australian research laboratory, to provide all analytical services needed to support one of its full scale refinery.With this _____, Shell replaced domestic employees at the site of the refinery with employees from the Australian firm.

A)outsourcing
B)repositioning
C)downsizing
D)restructuring
E)worker mobility

Question 68

A natural barrier that faces Argentina when it sells beef to Siberia is:

A)custom regulations
B)exchange controls
C)government controls
D)distance
E)taxes

Question 69

Besides tariffs, a government can use a number of other tools to restrict trade.Which of the following is NOT a tool aimed at restricting trade?

A)import quota
B)embargo
C)subsidy
D)exchange control
E)custom regulation

Question 70

What are the benefits associated with free trade and globalization?

A)Prevents employers from using pay cuts to threaten employees
B)An open economy that spurs innovation
C)Higher probability that inflation will arrest economic growth
D)Decreased per capita income
E)All of the above

Question 71

A total prohibition against importing certain products is called a(n):

A)embargo
B)boycott
C)tariff
D)restrictive limit
E)import quota

Question 72

_____ are limitations on the quantity of certain types of goods that can be imported over a period of time.

A)Export quotas
B)Subsidies
C)Import quotas
D)Embargo levels
E)Tariffs

Question 73

Which of the following is NOT an argument for tariffs that protect domestic businesses and workers?

A)the infant-industry argument
B)the maintenance of improved quality of products to protect consumers
C)the protection of small businesses
D)the job-protection argument
E)the protection of industries and technology vital to defense preparedness

Question 74

The European Union (EU) bans the importation of hormone-fed U.S.beef and bioengineered corn and soybeans on safety grounds although Americans eat this food every day.This ban is so consumers in the EU will buy domestic beef and products made from domestically produced corn and soybeans.This ban is an example of:

A)free trade
B)ethnocentricity
C)dumping
D)countertrading
E)protectionism

Question 75

In 1914, the United States prohibited the importation of Mexican avocados even though Mexico is the world's largest producer of the fruit.This prohibition remained in effect until 1996.The ban on importing Mexican avocados is an example of a(n):

A)import quota
B)embargo
C)restrictive limit
D)boycott
E)tariff

Question 76

A recent regulation enacted by the Commission for Protective Trade Measures in Russia limits the amount of poultry meat that can be brought into the country and sold in the country each year to 1.05 billion tons.Russia is using a(n) _____ to protect its domestic poultry industry.

A)embargo
B)boycott
C)tariff
D)restrictive limit
E)import quota

Question 77

_____ refers to sending work functions to another country resulting in domestic workers losing their jobs.

A)Outsourcing
B)Repositioning
C)Downsizing
D)Restructuring
E)Worker mobility

Question 78

Which of the following is an example of a natural trade barrier?

A)Distance
B)Price
C)Product characteristic
D)Exchange controls
E)Custom regulations

Question 79

The _____ is a protectionist argument that says the U.S.should use tariffs to keep foreign labor from taking away U.S.jobs.

A)statement of job security
B)job-protection argument
C)minimum-job employment agreement
D)job equity principle
E)home protection agreement

Question 80

China imposes a 45 percent tax on the market value of all chickens that are imported from the U.S.into China.Another name for this type of tax is a(n):

A)embargo
B)boycott
C)subsidy
D)quota system
E)tariff