Question 1

What term refers to a tax levied on imported goods?

Accepted Answer

Tariffs are taxes imposed by a government on goods and services imported from other countries, used to control trade volumes and protect domestic industries.

Question 2

What do ISO 14000 standards set requirements for?

Accepted Answer

ISO 14000 standards are a series of environmental management systems and tools designed to help organizations minimize how their operations negatively affect the environment, comply with applicable laws, regulations, and other environmentally oriented requirements, and continually improve in the above.

Question 3

What are many Western firms using in order to stay abreast of changing political and legal environments that exist in various foreign countries?

Accepted Answer

Western firms often establish political risk assessment units or hire consultants to analyze and forecast the political and legal changes in foreign countries where they operate. This helps them mitigate risks associated with political instability, regulatory changes, and legal challenges.

Question 4

What term refers to a complete ban on the import of a product?

Accepted Answer

An embargo is a government order that restricts commerce or exchange with a specified country or the exchange of specific goods. An embargo on the import of a product means a complete ban on importing that specific product, not just a restriction or a tariff.

Question 5

What is the basic purpose of protective tariffs?

Accepted Answer

Protective tariffs are designed to make imported goods more expensive compared to domestic products, thereby protecting domestic industries from foreign competition by encouraging consumers to buy domestically produced goods.

Question 6

Which of the following is NOT considered a trade barrier to an exporter?

Accepted Answer

Trade barriers are measures that governments or public authorities introduce to make imported goods or services less competitive than locally produced goods and services. Tariffs, import quotas, and subsidies are all examples of trade barriers. Tariffs increase the cost of imported goods, making them less competitive. Import quotas limit the quantity of goods that can be imported, thereby protecting domestic industries. Subsidies are financial support provided by the government to local businesses, making their goods cheaper than imported products. Related-party trade, however, refers to trade between companies that are part of the same corporate entity or between family members, and is not considered a trade barrier.

Question 7

Which of the following is the world's most frequently spoken language?

Accepted Answer

Mandarin Chinese is the most spoken language in the world when considering the number of native speakers.

Question 8

What type of trade barrier is being used if the Italian government imposed duties on consumer electronic products imported from Canada to raise their prices in the local market and to protect the local companies from competition?

Accepted Answer

Protective tariffs are taxes imposed on imported goods to raise their price, making them less competitive against local products, thus protecting domestic industries from foreign competition.

Question 9

What type of trade barrier is being used when governments try to protect the private domestic industries by providing them financial support?

Accepted Answer

Subsidies are financial support provided by governments to domestic industries to make them more competitive against foreign imports, thereby protecting them.

Question 10

What is one requirement for companies regarding exchange control?

Accepted Answer

Exchange control often requires companies that earn foreign currency (through exports) to sell it to the central bank or a designated foreign exchange agency to control the supply of foreign currency within the country. This helps the government manage its currency's value.

Question 11

What is the ideal way for a nation to stop a foreign company from dumping?

Accepted Answer

Imposing protective tariffs is a direct method by which a nation can protect its domestic industries from foreign companies dumping products at below-market prices. Tariffs make the dumped goods more expensive and less attractive to consumers, thereby reducing the impact of dumping.

Question 12

What term refers to a trade restriction that limits the number of units of products in certain categories that can cross a country's boundary for resale?

Accepted Answer

An import quota is a type of trade restriction that limits the quantity of goods that can be imported into a country, thereby controlling the number of units of products in certain categories that can cross a country's boundary for resale.

Question 13

What do ISO 9000 standards set requirements for?

Accepted Answer

ISO 9000 standards set requirements for quality management systems, focusing on ensuring that companies consistently meet customer and regulatory requirements for product and service quality.

Question 14

What is the basic purpose of revenue tariffs?

Accepted Answer

Revenue tariffs are primarily designed to generate income for the government of the importing country by imposing taxes on imported goods.

Question 15

Which of the following is an administrative trade barrier?

Accepted Answer

Customs barriers are considered administrative trade barriers because they involve bureaucratic procedures and regulations that can restrict imports or exports. These can include customs documentation requirements, inspections, and other formalities that can act as indirect barriers to trade.

Question 16

What is a major technological issue involving food market?

Accepted Answer

Genetic reengineering is a major technological issue involving the food market, as it deals with modifying the genetic makeup of plants and animals to improve yield, resistance to pests and diseases, and nutritional content. This has raised concerns regarding safety, environmental impact, and ethical considerations.

Question 17

What type of trade restriction is the Russian government using when it imposes a ban on the wines imported from Georgia?

Accepted Answer

An embargo is a government order that restricts commerce or exchange with a specified country or the exchange of specific goods. In this case, the Russian government's ban on Georgian wines is an example of an embargo, as it is a restriction on the import of a specific product from a specific country.

Question 18

Who provides advice and assistance to Canadian businesses that want to enter foreign markets?

Accepted Answer

The Trade Commissioner Service (TCS) provides advice and assistance to Canadian businesses looking to enter foreign markets, helping them navigate international trade opportunities and challenges.

Question 19

A country in Africa imposes a duty on imported goods to pay for government services. What is this an example of?

Accepted Answer

This is an example of a revenue tariff, which is a tax imposed on imported goods primarily to generate income for the government rather than to protect domestic industries.

Question 20

When entering a foreign market, care must be taken to ensure that product names and advertising slogans are translated correctly and do not cause misunderstandings among foreign consumers. What element of the international environment does this illustrate?

Accepted Answer

This illustrates the social-cultural element of the international environment because it involves understanding and adapting to the cultural norms, values, and languages of the foreign market to avoid misunderstandings and ensure effective communication.

Quiz 7: Serving Global Markets