Question 1

A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.

Accepted Answer

A protective tariff is intended to protect domestic industries by raising the prices of imported goods, making domestic products more competitive in the domestic market.

Question 2

Ford trades vehicles to Jamaica,which then trades them to China in exchange for computers.This is an example of:

Accepted Answer

This scenario describes countertrading, which involves two countries exchanging goods or services without using currency. In this case, Ford is trading vehicles to Jamaica in exchange for goods from China, and Jamaica is trading those vehicles to China in exchange for computers.

Question 3

______________ is the economic theory advocating that a nation should try to sell more goods to other nations than it buys from them.

Accepted Answer

This economic theory is known as mercantilism, which emphasizes the accumulation of wealth through trade surpluses and the protection of domestic industries. It was particularly influential during the 16th-18th centuries in Europe.

Question 4

The president of the Auto Parts of Canada Corporation recently testified before a Parliament committee,urging them to limit the flow of imported automobile parts into Canada.She contended that these imports were priced lower than the foreign producers were charging in their own countries.She believed that these foreign producers were:

Accepted Answer

The president's argument that imported automobile parts are priced lower than what foreign producers were charging in their own countries suggests that these producers are engaging in dumping activities, which is the practice of selling goods in another country at a lower price than what they sell for in their home country.

Question 5

In an effort to protect domestic jobs,some countries will place a limit on the number of certain types of products that can be imported.These limits are called:

Accepted Answer

Import quotas are limits placed on the quantity of certain types of products that can be imported into a country. They are used as a protectionist measure to limit foreign competition and support domestic industries. This allows domestic producers to sell more of their products and protect domestic jobs.

Question 6

__________ is the practice of selling a product in foreign countries for a lower price than the good is sold domestically.

Accepted Answer

Dumping is the practice of selling a product in foreign countries for a lower price than the good is sold domestically. This is often done to increase market share or to get rid of excess inventory. Dumping can be controversial as it can harm domestic producers and may be seen as an unfair trade practice.

Question 7

Which of the following government policies creates an environment of restrictive standards intended to make it difficult for foreign firms to successfully sell their products?

Accepted Answer

Nontariff barriers are government policies that create restrictive standards to make it difficult for foreign firms to sell their products. These may include regulations, product standards, and other requirements that are designed to protect domestic industries from competition. Monetary tariffs are taxes on imported goods, countertrade policies are agreements between governments to trade goods or services without using currency, and export constraint policies limit the amount of goods that can be exported from a country.

Question 8

Many countries use ________________ policies as a way to protect their domestic industries from unfair foreign competition.

Accepted Answer

Trade protectionism policies are used by many countries to protect their domestic industries from unfair foreign competition. These policies typically involve the imposition of tariffs, quotas, and other barriers to trade in order to make domestic products more competitive in the domestic market. This can help to support domestic businesses and industries, but can also lead to higher prices for consumers and reduced competition in the marketplace.

Question 9

________ tariffs are designed to raise money for the government.

Accepted Answer

Revenue tariffs are imposed with the primary goal of raising revenue for the government. They are not meant to restrict trade or protect domestic industries but rather generate income for the government.

Question 10

As a business strategy,dumping can be used to:

Accepted Answer

Dumping can be a strategy to gain a foothold in a new market by offering products at a lower price than the local competitors. This can help the company to build a customer base and brand recognition, which can ultimately lead to increased sales and profitability. Dumping is not a strategy to better utilize e-commerce opportunities, avoid trade protectionist laws, or achieve eligibility for foreign aid.

Question 11

Paula,a Canadian businessperson who closely follows international business conditions,recently read a newspaper article predicting that the value of the dollar will soon fall.If this article is correct,Paula should expect:

Accepted Answer

If the value of the Canadian dollar falls, it becomes more expensive for Canadians to import goods from other countries. Therefore, prices of imported goods would rise. However, it also means that Canadian goods become cheaper for foreign buyers, making them more competitive in international markets and causing the prices of Canadian goods sold overseas to fall.

Question 12

A Mexican firm has agreed to trade petroleum to an American importer in return for Canadian made computers.This arrangement is an example of:

Accepted Answer

This arrangement is an example of countertrade, which involves the exchange of goods or services instead of money. In this case, the Mexican firm and American importer are exchanging petroleum and Canadian computers, respectively, without the use of cash.

Question 13

Workers in the nation of Zeland prefer managers that forcefully tell employees what to do and how to do it.Conversely,employees in Canada prefer to participate in decision making in the workplace.This _________________ difference between Zeland workers and Canadian employees represents a management challenge for firms trading in the global markets.

Accepted Answer

The difference in management preferences between Zeland and Canada is a sociocultural difference, which represents a challenge for firms operating in global markets. Socio-cultural differences refer to values, beliefs, customs, and behavior patterns that exist within a culture, and can impact management and workplace practices. Understanding and adapting to these differences are essential for firms to effectively navigate and compete in global markets.

Question 14

An American firm recently criticized a Chinese steel producer for charging a lower price for their products in Canada than they charge in China.If proven to be true,the Chinese firm has engaged in:

Accepted Answer

The practice of charging lower prices for products in a foreign market than in the domestic market is known as dumping. It is considered as an unfair trade practice that harms domestic industries in the importing country.

Question 15

Canadian companies operating in Latin America can run into problems with local employees because,

Accepted Answer

The answer of Canadian companies operating in Latin America can...

Question 16

The two basic types of tariffs are:

Accepted Answer

The two basic types of tariffs are revenue and protective. Revenue tariffs are levied with the intention of generating revenue for the government. Protective tariffs, on the other hand, are designed to protect domestic industries from foreign competition by increasing the cost of imported goods.

Question 17

___________ is the use of government regulations to limit the import of goods and services.

Accepted Answer

Trade protectionism involves the use of government regulations such as tariffs, quotas, and subsidies to limit imports and protect domestic industries. Fiscal policy is the use of government spending and taxation to manage the economy. Countertrade policy is a form of trade in which goods are exchanged directly between two countries without the use of money. Monetary policy involves the use of central bank actions such as interest rate adjustments to influence the economy.

Question 18

A(n)__________ refers to a complete ban of the imports or exports of certain products from a specific country.

Accepted Answer

An embargo refers to a complete ban on the imports or exports of certain products from a specific country. An absolute tariff is a tax on imports that is not affected by changes in the price of the goods, a health quarantine is a restriction on the movement of people or goods to prevent the spread of disease, and a quota refers to a limit on the amount of a product that can be imported or exported.

Question 19

Hennessy Hardware,a Canadian retailer,buys much of its inventory from Asian countries.Hennessy Hardware would benefit if the value of the dollar ________ relatively to the currencies of the countries from which Hennessy imports.

Accepted Answer

If the value of the dollar rises relative to the currencies of the countries from which Hennessy imports, then Hennessy would be able to purchase more inventory with the same amount of dollars. This would increase their purchasing power and potentially lead to lower costs for the company.

Question 20

Differences in electrical power and transportation systems can present special problems for Canadian firms when attempting to enter global markets.These represent the __________ forces that impact global business.

Accepted Answer

The differences in electrical power and transportation systems are physical and environmental forces that impact global business. Legal and regulatory forces refer to laws and regulations that govern business activities, economic forces refer to market and financial conditions, and governmental forces refer to political and social factors related to a particular government.

Quiz 3: Competing in Global Markets