Question 1

When a company decides to do business outside its own country,it must research several factors,including potential barriers to international trade.Which of the following is not a potential barrier cited in your text?
A)Legal
B)Political
C)Cultural
D)Economic
E)Scientific

Accepted Answer

When a company decides to do business outside its own country,it will encounter barriers such as economic,legal,political,cultural,social and technological.

Question 2

Not all countries trading in international markets package goods in the same units.Unlike the United States,most countries rely on
A)currency.
B)gold.
C)the metric system.
D)daylight savings.
E)color coding.

Accepted Answer

Most countries use the metric system which causes problems for both sellers and buyers in the international marketplace.

Question 3

A common reason for establishing quotas or tariffs is to prohibit dumping.

Accepted Answer

Dumping occurs when a country or business sells products at a lower price than what it costs to product them and setting a quota or tariff will rescind this practice.

Question 4

A group of nations or companies that band together to act as a monopoly is known as a
A)conglomerate.
B)licensor.
C)cartel.
D)multinational.
E)licensee.

Accepted Answer

A cartel is a group of firms or nations that agrees to act as a monopoly and not compete with each other to generate a competitive advantage in world markets.

Question 5

The International Monetary Fund promotes trade among member nations by eliminating trade barriers and fostering financial cooperation.

Accepted Answer

The International Monetary Fund (IMF)was established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation.

Question 6

Sociocultural differences,such as variations in spoken language and body language,have no impact on international business.

Accepted Answer

Cultural differences,including body language and gestures,affect international trade.

Question 7

When a country devalues its currency,this encourages the sale of its
A)imports.
B)domestic goods to foreign countries.
C)international goods.
D)international services.
E)debts.

Accepted Answer

Devaluation decreases the value of currency in relation to other currencies,which encourages exportation and tourism.

Question 8

Understanding that Arab businessmen tend to stand face to face when holding a conversation reveals the importance of knowing another culture's use of
A)language.
B)dialect.
C)religious practices.
D)manners.
E)body language.

Accepted Answer

Differences in body language and personal space affect international trade.

Question 9

The translation of product names can be crucial in the success of a foreign marketing effort because of
A)political barriers.
B)cultural barriers.
C)legal barriers.
D)export quotas.
E)body language.

Accepted Answer

Cultural differences include those in spoken and written language.

Question 10

The World Bank and other multilateral development banks are the largest sources of advice and assistance for developing nations.

Accepted Answer

The World Bank,also known as the International Bank for Reconstruction and Development,was established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries.

Question 11

To reduce dollars flowing out of the country,the United States can take measures like limit the number of foreign cars from Japan that are imported by imposing a(n)
A)quota.
B)exchange control.
C)trade deficit.
D)embargo.
E)free trade zone.

Accepted Answer

A quota limits the number of units of a particular product that can be imported into a country.

Question 12

A change in administration in a foreign government that is hostile to foreign trade is an example of a
A)political barrier.
B)cultural barrier.
C)exchange barrier.
D)export quota.
E)body language.

Accepted Answer

A political factor centers around government.A sudden change in power,particularly in an unstable country,can result in a new regime that is hostile to foreign businesses and represents a political barrier.

Question 13

GATT was a precursor to the WTO and provided a forum for tariff negotiations.

Accepted Answer

The General Agreement on Tariffs and Trade (GATT)provides a forum for tariff negotiations and a place where international trade problems can be discussed and resolved.

Question 14

The law that allows selected American firms desiring international trade to form monopolies to compete with foreign cartels is the
A)Webb-Pomerene Export Trade Act.
B)Bretton Woods Agreement.
C)GATT.
D)Foreign Corrupt Practices Act.
E)Sherman Antitrust Act.

Accepted Answer

The Webb-Pomerene Export Trade Act of 1918 allows selected U.S.firms to form monopolies to compete with foreign monopolistic organizations.

Question 15

Political considerations change slowly,while laws change rapidly.

Accepted Answer

Political considerations are seldom written down and often change rapidly,unlike legal issues.

Question 16

What cultural issues should a manager consider before doing business in a foreign country?

Accepted Answer

The answer of What cultural issues should a manager consider...

Question 17

The Free Trade Area of the Americas effectively united Ireland,Britain,and France into one market.

Accepted Answer

Similar to NAFTA,the Free Trade Area of the Americas (FTAA)will progressively eliminate trade barriers and create the world's largest free trade zone with 800 million people but is not a reality yet.

Question 18

What are the different international barriers to trade? Give an example of each one.

Accepted Answer

The answer of What are the different international barriers to...

Question 19

Around the globe,completely free trade is common.

Accepted Answer

Completely free trade seldom exists.

Question 20

A specific amount of money levied on each unit of a product brought into the country is a(n)
A)ad valorem tariff.
B)value-added tariff.
C)fixed tariff.
D)protective tariff.
E)duty-free tariff.

Accepted Answer

A fixed tariff is a specific amount of money levied on each unit of a product brought into the country.

Quiz 3: Business in a Borderless World

When a company decides to do business outside its own country,it must research several factors,including potential barriers to international trade.Which of the following is not a potential barrier cited in your text?

Not all countries trading in international markets package goods in the same units.Unlike the United States,most countries rely on

A common reason for establishing quotas or tariffs is to prohibit dumping.

A group of nations or companies that band together to act as a monopoly is known as a

The International Monetary Fund promotes trade among member nations by eliminating trade barriers and fostering financial cooperation.

Sociocultural differences,such as variations in spoken language and body language,have no impact on international business.

When a country devalues its currency,this encourages the sale of its

Understanding that Arab businessmen tend to stand face to face when holding a conversation reveals the importance of knowing another culture's use of

The translation of product names can be crucial in the success of a foreign marketing effort because of

The World Bank and other multilateral development banks are the largest sources of advice and assistance for developing nations.

To reduce dollars flowing out of the country,the United States can take measures like limit the number of foreign cars from Japan that are imported by imposing a(n)

A change in administration in a foreign government that is hostile to foreign trade is an example of a