Question 1

The Northwest Cherry Growers (headquartered in the state of Washington) sells much of its locally grown produce to Taiwan._____ was the easiest and least expensive way for the growers' association to sell to global markets.
A)Licensing
B)Contract manufacturing
C)Importing
D)Franchising
E)Exporting

Accepted Answer

Exporting is the most straightforward and cost-effective method for producers to sell their goods in international markets, especially for agricultural products like cherries.

Question 2

Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners.These are called:
A)free trade zones
B)preferred tariff pacts
C)interaction zones
D)customary-duty areas
E)regulation-free zones

Accepted Answer

Free trade zones are areas where goods may be landed, handled, manufactured, or reconfigured, and re-exported without the intervention of the customs authorities. Only when the goods move to consumers within the country in which the zone is located do they become subject to the prevailing customs duties.

Question 3

_____ are laws that require a company earning foreign currency from its exports to sell the foreign currency to a control agency, usually a central bank.
A)Currency policies
B)Rates of exchange
C)Laws of balanced exchange
D)Favorable exchange regulations
E)Exchange controls

Accepted Answer

Exchange controls are regulations that require a company to sell its foreign currency earnings to a central authority, typically the country's central bank, to manage the exchange rate and balance of payments.

Question 4

Which of the following statements about dumping is true?
A)Dumping is legal along as it is government subsidized.
B)The U.S has passed laws to make dumping illegal.
C)The United States has never been a victim of dumping.
D)Dumping is a form of export quota.
E)Dumping is a type of tariff

Accepted Answer

Dumping, the practice of selling goods in a foreign market at a price below their cost of production or below their domestic selling price, is considered unfair trade by many countries, including the U.S. The United States has passed anti-dumping laws to protect domestic industries from such practices, making it illegal to dump goods in the U.S. market at unfairly low prices.

Question 5

The World Trade Organization (WTO):
A)includes all of the same countries that signed the Uruguay Round
B)has emerged as the world's most powerful institution for reducing trade barriers and opening markets
C)does not yet have an effective dispute settlement procedure but will before the year 2005
D)is controlled by the United States
E)includes China and Russia among its members

Accepted Answer

The WTO is recognized as a powerful institution for reducing trade barriers and opening markets globally.

Question 6

When sales of cheese in the United States began to stagnate, the U.S.dairy industry looked for a quick and easy method to reach global markets.From your understanding of how companies participate in the global marketplace, you should know that the dairy industry selected:
A)licensing
B)contract manufacturing
C)importing
D)franchising
E)exporting

Accepted Answer

Exporting is the most direct and straightforward strategy for a company looking to reach global markets quickly. It involves selling products produced in one country to customers in other countries, which aligns with the dairy industry's goal to expand sales of cheese globally.

Question 7

The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries.
A)Federal Reserve Bank
B)Central Bank
C)World Bank
D)International Funding Bank
E)International Monetary Fund

Accepted Answer

The World Bank was established to provide financial and technical assistance to developing countries for development projects (e.g., infrastructure) that are expected to improve the economic prospects and quality of life for people in those countries.

Question 8

The Uruguay Round of trade negotiations:
A)was an agreement to lower trade barriers that existed in the South American countries
B)actually increased tariffs by 10 percent worldwide
C)created the General Agreement on Tariffs and Trades (GATT)
D)had no effect on the entertainment industry
E)was the most ambitious global trade agreement ever negotiated

Accepted Answer

The Uruguay Round, which took place from 1986 to 1994, was indeed the most ambitious global trade agreement ever negotiated, leading to the creation of the World Trade Organization (WTO) and significantly reducing trade barriers worldwide.

Question 9

The _____ created the world's largest free-trade zone.
A)International Monetary Fund
B)European Union
C)North American Free Trade Agreement
D)North Atlantic Treaty Organization
E)United Nations Security Council

Accepted Answer

The North American Free Trade Agreement (NAFTA) created the world's largest free-trade zone by eliminating trade barriers between the United States, Canada, and Mexico.

Question 10

In 1998, the Canadian Magazine Publisher's Association (CMPA) predicted the demise of many Canadian magazines because the World Trade Organization (WTO) made it legal for U.S.publishers to introduce product into the Canadian market, without incurring the start-up costs involved in launching a new magazine.By using split-run magazines (modifying the U.S.edition so they contain Canadian ads), U.S.magazine publishers could offer lower rates to advertiser and sell the magazines for less money than Canadian publishers could.According to the CMPA, the U.S.magazine publishers would be engaged in:
A)export pricing
B)dumping
C)unloading
D)dunking
E)add-on pricing

Accepted Answer

The CMPA's concern was that U.S. magazine publishers, by using split-run editions to introduce their products into the Canadian market at lower prices, would be engaging in dumping. Dumping occurs when a company sells a product in a foreign market at a price lower than it charges in its home market or below the cost of production, potentially harming the domestic industry of the importing country.

Question 11

The least costly and least risky method for selling a product on the global market is:
A)licensing
B)contract manufacturing
C)importing
D)franchising
E)exporting

Accepted Answer

Exporting is considered the least costly and least risky method for selling a product on the global market because it allows a company to enter foreign markets without the need for a significant investment in new production facilities or the creation of a local business entity. It also minimizes the risk associated with understanding local market laws and customs, as the company can sell its products directly or through local distributors.

Question 12

The _____ is an international bank that normally provides short-term loans to countries that are unable to meet their budgetary expenses.
A)Financial Investment Fund
B)International Monetary Fund
C)North Atlantic Trade Bank
D)World International Federation
E)Federation of International Banks

Accepted Answer

The International Monetary Fund (IMF) is known for providing short-term loans to countries facing difficulties in meeting their budgetary expenses, aiming to stabilize international monetary cooperation and financial stability.

Question 13

In 1997, Russia and Ukraine exported carbon steel plate into the U.S.at a price much lower than the countries were found guilty of charging the identical steel in their home markets.Russia and Ukraine were engaged in:
A)export pricing
B)dumping
C)unloading
D)dunking
E)add-on pricing

Accepted Answer

Dumping occurs when a country exports a product at a price lower than the price it normally charges on its own home market. In this case, Russia and Ukraine were found guilty of selling carbon steel plate in the U.S. at prices lower than those in their domestic markets, which is a classic example of dumping.

Question 14

A German law that prohibited the use of hops grown outside of the country in the production of German-made beer was overturned in the late 1980s.This law was an example of a(n):
A)controlled purchase policy
B)restrictive purchase regulation
C)domestic-only law
D)buy-national regulation
E)domestic-content law

Accepted Answer

This law is an example of a buy-national regulation, as it mandated the use of domestically grown hops in beer production, thereby promoting the purchase of national products over foreign ones.

Question 15

The _____ is an agreement that dramatically lowered trade barriers worldwide and created the new World Trade Organization (WTO).
A)Uruguay Round
B)North American Free Trade Agreement
C)Maastricht Treaty
D)Mercosur
E)International Monetary Fund

Accepted Answer

The Uruguay Round was a series of negotiations that led to the creation of the World Trade Organization (WTO) in 1995, significantly reducing trade barriers globally.

Question 16

_____ are government regulations that give special priority and privileges to domestic manufacturers.
A)Special purchase policies
B)Buy-national regulations
C)Restrictive purchase regulations
D)Content restrictive laws
E)Domestic-only laws

Accepted Answer

Buy-national regulations are designed to favor domestic manufacturers by giving them priority and privileges over foreign competitors, often to support local economies and employment.

Question 17

A preferential tariff:
A)gives tariff advantages to one country over others
B)is the tax placed on countertrades
C)applies only to luxury items
D)limits the number of products that can be imported from particular countries
E)is used with import quotas to prevent dumping

Accepted Answer

A preferential tariff is designed to give tariff advantages to one country over others, often as part of a trade agreement or to promote economic development in the beneficiary country.

Question 18

The World Bank's emphasis has recently shifted from helping to build the infrastructure of developing countries to:
A)purchasing food for the population
B)building highways, schools, and hospitals
C)developing new agricultural techniques
D)offering loans to help to relieve their debt burden
E)expansion of local product lines for more exporting

Accepted Answer

The World Bank has shifted its focus towards offering financial assistance, such as loans, to help developing countries manage and relieve their debt burdens, rather than solely focusing on infrastructure projects.

Question 19

Laws relating to the alcoholic content of beer have required many imported brands of beer to be labeled malt liquor when it is sold in the United States.In addition, all beer sold in the U.S.must contain an expiration date or a "best-buy" date.These laws have made it difficult for small foreign breweries to enter the U.S.market.These laws are an example of:
A)customs regulations
B)national trade laws
C)nonfinancial tariffs
D)export laws
E)buy-national regulations

Accepted Answer

The answer of Laws relating to the alcoholic content of...

Question 20

A _____ regulation in the United States bans the use of foreign steel in constructing U.S.highways.
A)controlled purchase policy
B)restrictive purchase regulation
C)domestic-only law
D)buy-national regulation
E)domestic-content law

Accepted Answer

The answer of A _____ regulation in the United States...

Quiz 3: Competing in the Global Marketplace

The Northwest Cherry Growers (headquartered in the state of Washington) sells much of its locally grown produce to Taiwan._____ was the easiest and least expensive way for the growers' association to sell to global markets.

Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners.These are called:

_____ are laws that require a company earning foreign currency from its exports to sell the foreign currency to a control agency, usually a central bank.

Which of the following statements about dumping is true?

The World Trade Organization (WTO) :

When sales of cheese in the United States began to stagnate, the U.S.dairy industry looked for a quick and easy method to reach global markets.From your understanding of how companies participate in the global marketplace, you should know that the dairy industry selected:

The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries.

The Uruguay Round of trade negotiations:

The _____ created the world's largest free-trade zone.

The least costly and least risky method for selling a product on the global market is:

The _____ is an international bank that normally provides short-term loans to countries that are unable to meet their budgetary expenses.

In 1997, Russia and Ukraine exported carbon steel plate into the U.S.at a price much lower than the countries were found guilty of charging the identical steel in their home markets.Russia and Ukraine were engaged in:

A German law that prohibited the use of hops grown outside of the country in the production of German-made beer was overturned in the late 1980s.This law was an example of a(n) :

The _____ is an agreement that dramatically lowered trade barriers worldwide and created the new World Trade Organization (WTO) .

_____ are government regulations that give special priority and privileges to domestic manufacturers.

A preferential tariff:

The World Bank's emphasis has recently shifted from helping to build the infrastructure of developing countries to:

A _____ regulation in the United States bans the use of foreign steel in constructing U.S.highways.