Exam Questions Ch3 International Business And Competing In - Contemporary Business 19e | Practice Test Bank by Louis E. Boone. DOCX document preview.
Package Title: Chapter 3, Testbank
Course Title: Boone, Contemporary Business, 19th Edition
Chapter Number: 3
Question type: Multiple Choice
1) _____ is/are foreign-made products purchased by domestic consumers.
a) Offshoring
b) Joint venture
c) Imports
d) Quota
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
2) Countries establish a(n) ______where they can trade among themselves without trade barriers.
a) balance of trade
b) free trade area
c) absolute advantage
d) comparative advantage
Difficulty: Easy
Learning Objective 1:03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s|| Knowledge
3) A(n) _____ is a tax levied on imported products.
a) tariff
b) devaluation
c) exchange rate
d) quota
Difficulty: Medium
Learning Objective1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s|| Analysis
4) A nation’s _____ is the rate at which currency can be exchanged for the currency of another nation.
a) tariff
b) devaluation
c) exchange rate
d) balance of payments
Difficulty: Easy
Learning Objective 1:03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s|| Knowledge
5) _____ refers to selling goods abroad at a price lower than that charged in the domestic market.
a) Offshoring
b) Tariff
c) Balance of trade
d) Dumping
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s|| Knowledge
6) _____ describes the fall of currency’s value relative to other currencies.
a) Dumping
b) Devaluation
c) Exchange rate
d) Multidomestic strategy
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
7) A country has _____ in the making of a product if it has a monopolistic position or it produces the product at the lowest cost.
a) absolute advantage
b) global business strategy
c) multidomestic strategy
d) comparative advantage
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
8) A country’s _____ is the difference between its exports and imports.
a) offshoring
b) balance of trade
c) joint venture
d) quota
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
9) Relocation of business processes to a lower-cost location overseas is known as ________.
a) offshoring
b) dumping
c) global business strategy
d) multidomestic strategy
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
10) A(n) _____ develops and markets products to serve different needs and tastes of separate national markets.
a) balance of trade
b) joint venture
c) free trade area
d) multidomestic strategy
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
11) A limit on the amount of a particular product that a country can import during a specified time period is a(n) _____.
a) joint venture
b) tariff
c) quota
d) comparative advantage
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
12) A country’s _____ is the overall flow of money into and out of a country.
a) balance of trade
b) imports
c) exchange rate
d) balance of payments
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
13) _____monitors agreements among General Agreement on Tariffs and Trade (GATT) member nations, mediates disputes, and works to reduce trade barriers throughout the world.
a) International Monetary Fund
b) World Trade Organization
c) Free trade area
d) Global business strategy
Difficulty: Easy
Learning Objective 1 :03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
14) A(n) _____ allows a company to share risks, costs, profits, and management responsibilities with another company.
a) balance of trade
b) joint venture
c) tariff
d) balance of payments
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
15) A nation can have a(n) _____ in a product if it can supply it more efficiently and at a lower price.
a) comparative advantage
b) balance of trade
c) free trade area
d) absolute advantage
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
16) The _____ was created to promote trade through financial cooperation, while eliminating barriers in the process.
a) International Monetary Fund
b) World Trade Organization
c) balance of payments
d) comparative advantage
Difficulty: Easy
Learning Objective 1 :03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
17) A(n) _____ uses a standardized product and marketing strategy worldwide.
a) joint venture
b) tariff
c) global business strategy
d) multidomestic strategy
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
18) ________ are domestically produced goods and services sold in other countries.
a) Exports
b) Countertrades
c) Imports
d) Outsourcing
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
19) ______ are foreign-made products purchased by domestic consumers.
a) Exports
b) Countertrades
c) Imports
d) Outsourcing
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
20) Washing machines that are manufactured in the United States and sold in Germany are categorized as US _____.
a) exports
b) countertrades
c) imports
d) outsourcing
Difficulty: Medium
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
21) IS Systems, a US company, produces computer parts and sells them to Asian countries. IS Systems is engaging in the international business activity known as _____.
a) importing
b) dumping
c) countertrade
d) exporting
Difficulty: Medium
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
22) Florida-based WeText purchases cell phones manufactured in Taiwan and sells them in the United States. WeText is engaging in the international business activity known as _____.
a) exporting
b) importing
c) countertrade
d) dumping
Difficulty: Medium
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
23) Which of these countries have a population of over a billion people each?
a) China and Russia
b) India and Russia
c) China and India
d) United States and China
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
24) US _____ make up about a quarter of the US gross domestic product (GDP).
a) petroleum exports
b) computer technology
c) exports and imports of goods and services
d) production of consumer electronic products
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
25) When a company operates in other countries, it _____ risk.
a) has no impact on
b) eliminates
c) controls
d) spreads out
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
26) Although people in developing nations have lower per capita incomes than more highly developed nations, their ______represent(s) a lucrative market for global trade.
a) technology
b) political stability
c) huge populations
d) infrastructure
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
27) Which of the following countries has experienced the greatest annual rate of GDP growth during the past decade?
a) United States
b) China
c) Canada
d) Japan
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
28) An absolute advantage occurs when a country can maintain _____.
a) a monopoly by outlawing foreign imports
b) a monopoly by levying high taxes on imports
c) a monopoly by being the lowest-cost producer of a good or service
d) its advantage by producing a good or service more efficiently
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
29) Even though the United States manufactures textiles, China is able to produce them more efficiently. Thus, China has a _____ in manufacturing textiles.
a) tariff
b) quota
c) trade restriction
d) comparative advantage
Difficulty: Medium
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
30) A nation can develop a _______ if it can supply its products more efficiently and at a lower price than it can supply other goods, compared with the outputs of other countries.
a) tariff
b) quota
c) trade restriction
d) comparative advantage
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
31) Which of the following statements is true regarding comparative advantage?
a) Comparative advantage is becoming rare these days.
b) Ensuring that its people are well educated is another way a nation can develop a comparative advantage in skilled human resources.
c) Developing countries possess no comparative advantage.
d) A nation must first possess an absolute advantage in a particular area before it can gain a comparative advantage.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
32) The country of Gevalia exported products totaling $86 billion last year. During the same year, Gevalia imported products valued at $43 billion. Gevalia has a(n) _____.
a) exchange rate of 2 to 1
b) trade deficit of $43 billion
c) trade surplus of $43 billion
d) unfavorable balance of payments
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
33) A trade deficit occurs when _____.
a) imports are sold at low profits
b) foreign-aid payments exceed exports
c) imports exceed exports
d) there is a net flow of money into a country
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
34) The United States has a trade surplus in which of the following items?
a) Oil
b) Textiles
c) Technology products
d) Services
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
35) Which country leads the world in the international trade of goods and services?
a) India
b) China
c) Russia
d) The United States
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
36) What does it mean when a country has a balance of payments surplus?
a) Monetary inflow exceeds monetary outflow.
b) Monetary outflow exceeds monetary inflow.
c) Imports exceed exports.
d) Exports exceed imports.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
37) A balance of payments deficit occurs when _____.
a) the net inflow of money from abroad exceeds the net outflows of money to other countries
b) imports exceed exports
c) the net outflow of money from a country exceeds the net inflow of money from abroad
d) exports exceed imports
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
38) Samantha, a US citizen, travels to Australia and spends $3,500 on souvenirs and clothing. She is contributing to the _____.
a) US trade surplus
b) growing exchange rate
c) US balance of payments surplus
d) US balance of payments deficit
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
39) A Japanese insurance company purchases US government securities. From the perspective of the United States, the balance of trade with Japan will _____ and the balance of payments with Japan will _____.
a) not change, improve
b) not change, get worse
c) improve, improve
d) Improve, get worse
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Analysis
40) What is a country’s exchange rate based on?
a) The rate at which its currency can be exchanged for currencies of other countries.
b) The number of foreign banks it has.
c) Tariffs and related trade restrictions.
d) The relationship between its imports and exports.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
41) ______ describes a drop in a currency’s value relative to other currencies or to a fixed standard.
a) Exporting
b) Importing
c) Devaluation
d) Countertrade
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
42) A country has a good chance of selling more of its goods abroad if it _____.
a) increases the value of its currency
b) more tourists decide to travel abroad
c) devalues its currency
d) sets high tariffs on imported goods
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
43) Which of the following would result from devaluation of the US dollar?
a) Foreign goods would be less expensive for American consumers.
b) Foreign companies would have to pay more to purchase U.S. assets.
c) The cost of foreign vacations for US citizens would be reduced.
d) US goods would sell for less abroad.
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
44) Assume a nation has a comparative advantage in the production of clothing. If the value of this country’s currency rises, _____.
a) its comparative advantage will decrease
b) its comparative advantage will stay the same
c) its comparative advantage will increase
d) an absolute advantage will be created
Difficulty: Hard
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Synthesis
45) Regarding hard currencies, which of the following statements is true?
a) Countries with hard currency typically use the barter system when exporting goods.
b) The US dollar is an example of hard currency, which is easily converted into other currencies.
c) Hard currency is difficult to convert into other currency.
d) A country with hard currency is likely to have a trade deficit.
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Analysis
46) Which of the following factors affects a country’s exchange rate?
a) The country’s geographical position.
b) The neighboring country’s exchange rate.
c) The country’s political conditions.
d) The country’s population.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
47) Why does Mexico appeal to US and foreign car makers?
a) Low demand for cars in South America.
b) Lower wages.
c) Its distance from the largest auto market in the world.
d) Easy availability of qualified engineers.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
48) To overcome which of the international trade barriers, an understanding of religious holidays is essential?
a) Political
b) Physical
c) Cultural
d) Legal
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
49) Live Machines, Inc., a US based company, is trying to establish a supplier relationship with a parts manufacturer in a small Asian country. Alejandro, the purchasing manager, is attempting to get to know the general manager and staff of the company to help finalize the agreement. Alejandro is attempting to overcome what type of barrier?
a) Physical barrier
b) Tariff restriction
c) Exchange controls
d) Cultural barrier
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
50) All of the following are social and cultural barriers EXCEPT _____.
a) language
b) currency shifts
c) religious attitudes
d) gift-giving traditions
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
51) ________ is the most widely spoken language in the world.
a) English
b) Mandarin Chinese
c) Hindi
d) Spanish
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
52) Samira is the Middle Eastern sales manager for a large company. She avoids giving pork products and wine to Arab customers as gifts. Samira is being sensitive to _____.
a) religious differences
b) language differences
c) differences in consumer habits
d) differences in business practices
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
53) Which of the following does NOT constitute a country’s infrastructure?
a) Political climate
b) Communication
c) Energy facilities
d) Transportation
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
54) Patents, trademarks, and intellectual property are important concerns in the _______environment.
a) economic
b) political
c) cultural
d) legal
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
55) The Foreign Corrupt Practices Act:
a) forbids US companies from bribing foreign officials, political candidates, or government representatives.
b) funds projects that build or expand a nation’s infrastructure.
c) mediates trade disputes among trade agreement member nations.
d) promotes trade through financial cooperation.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
56) The country of Velvita is experiencing severe competition to its domestic auto industry in the form of foreign imports. Many jobs are threatened. Velvita places a 25 percent tariff on the price of imported cars. This type of tariff is known as a(n) _____ tariff.
a) revenue
b) quota
c) infant industry
d) protective
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
57) The purpose of ______is to make imports more expensive for domestic buyers.
a) exchange controls
b) embargo
c) dumping
d) tariffs
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
58) Taxes, surcharges, or duties on foreign products are referred to as _________.
a) exchange controls
b) embargo
c) dumping
d) tariffs
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
59) A country raises the tariff on imported beef in order to increase its price above the price of domestically produced beef. This is an example of _____.
a) an exchange control
b) a quota
c) a protective tariff
d) dumping
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
60) Samira spent a two-week vacation in Italy and purchased more than $1,000 worth of Venetian glass. Upon returning to the United States, she was required to pay a _____ on the items.
a) protective tariff
b) revenue tariff
c) service tax
d) exchange rate tax
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
61) Which of these limit the amounts of particular products that countries can import during specified time periods?
a) Exchange controls devaluation
b) Embargo
c) Quotas
d) Foreign trade zone
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
62) The objective of quotas is to _____.
a) prevent dumping
b) raise revenue for the government
c) ban the importation of certain goods
d) protect domestic industries
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
63) A German-made household appliance is popular and is highly competitive with the same product manufactured in the USA. To give the domestic industry a better chance to operate profitably, the US government restricts the number of these appliances that can be imported by applying a(n) _____.
a) quota
b) embargo
c) protective tariff
d) revenue tariff
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
64) If a foreign company offers steel in the United States below the company’s cost of production, the company might be accused of _____.
a) protective tariffs
b) dumping
c) a managed trade agreement
d) quota
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
65) Dumping _____domestic consumers and _____domestic producers in an importing market.
a) harms, benefits
b) harms, harms
c) benefits, harms
d) benefits, benefits
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
66) Marco has to make a deal with a Chinese company. When he is in China, he learns that it is customary to spend money getting to know the other businessmen and building trust. If he participates in this custom, which of the following is he violating?
a) The General Agreement on Tariffs and Trade (GATT)
b) The Foreign Corrupt Practices Act
c) The North American Free Trade Agreement (NAFTA)
d) The Foreign Licensing Agreement
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
67) Pushpa works for an American beverage company that is entering new global markets. She has been sent to Japan to oversee the launch of the company’s products in the country. Which of the following should she pay more attention to while managing the launch?
a) Translating words in the slogan and other associated phrases in a way that they convey the intended meaning.
b) Choosing indigenous actors in the commercials for the products.
c) Modifying the product to suit the taste preferences of the local population.
d) Following local business customs and traditions.
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
68) In order to regulate international commerce, the United States has entered into friendship, _____, and navigation (FCN) treaties with other nations.
a) capital planning
b) contract
c) commerce
d) creative strategy
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
69) A major diplomatic incident occurred between the leaders of Litania and Kaleria. In response, Kaleria banned import of all Litanian goods into Kaleria. This is called a(n) _____.
a) quota
b) protective tariff
c) exchange control
d) embargo
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
70) A country’s department of trade and commerce decides to regulate imports from a neighboring country in order to curb the exit of large amounts of domestic capital. This is an example of a(n) _____.
a) embargo
b) exchange control
c) quota
d) protective tariff
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
71) Decisions made by the _______regarding trade disputes are binding on the parties involved.
a) North American Free Trade Agreement (NAFTA)
b) International Monetary Fund (IMF)
c) World Trade Organization (WTO)
d) General Agreement on Tariffs and Trade (GATT)
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
72) Which of the following is an international trade accord that substantially reduced worldwide tariffs and other trade barriers?
a) North American Free Trade Agreement (NAFTA)
b) International Monetary Fund (IMF)
c) World Trade Organization (WTO)
d) General Agreement on Tariffs and Trade (GATT)
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
73) ABC, a less-developed country, wants to build new port facilities, which will allow it to increase agricultural exports. Financing for this project could come from the _____.
a) International Monetary Fund
b) World Trade Organization
c) World Bank
d) United Nations
Difficulty: Medium
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
74) ABC, a less-developed nation is facing a financial crisis due to the rapid devaluation of its currency. Which of the following might aid this country?
a) International Monetary Fund
b) World Bank
c) United Nations
d) World Trade Organization
Difficulty: Medium
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
75) One effect of the United States-Mexico-Canada Agreement (USMCA) is:
a) an increase in trade among the USMCA member nations.
b) an increase in the number of low-wage jobs in the United States.
c) a decrease in trade among USMCA member nations.
d) an increase in trade restrictions among the member nations.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
76) Which of the following promotes trade by providing financial assistance when a country is unable to meet their budget?
a) The United Nations
b) The European Union
c) The World Bank
d) The International Monetary Fund
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
77) The European Union (EU) _____.
a) recently became part of the North American Free Trade Agreement.
b) wants to introduce European citizenship as a complement to national citizenship.
c) made trade with the United States more difficult.
d) introduced the euro to coincide with each country’s own currency.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
78) The most common first step for companies entering foreign markets is _________.
a) countertrade
b) foreign licensing
c) indirect exporting
d) direct exporting
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
79) Fulton Corp. manufactures microprocessors and sells it to a computer manufacturing company in Japan. Fulton Corp. is engaging in _____.
a) international production
b) foreign licensing
c) countertrade
d) indirect exporting
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
80) Sunil, CEO of Chem Globe International (CGI), has recognized the financial opportunities in China. Sunil has hired a foreign freight forwarder to coordinate selling CGI’s products outside the United States. CGI is now involved in _____.
a) overseas marketing
b) international production
c) direct exporting
d) foreign licensing
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
81) A US agricultural producer sells wheat to a small country in Africa. The country pays the US company in seafood. This is an example of _____.
a) countertrade
b) direct exporting
c) foreign licensing
d) international production
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
82) ABC International, a Canadian software company that specializes in developing computer games enters into an agreement with XYZ Software, a Japanese software company. Under this agreement, XYZ has the right to manufacture and sell the ABC’s games in Japan. This agreement is an example of _____.
a) countertrade
b) foreign licensing
c) international production
d) direct exporting
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
83) Baby Toys, Inc. (BTI) enters into a contract with a foreign company to produce and distribute its products in a specific geographic area. BTI is involved in _____.
a) foreign licensing
b) countertrade
c) international production
d) direct exporting
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
84) An American company that makes plastic garden furniture wants to market its products in a foreign country that has a high tariff barrier against imported plastic goods. One way the company can get around this problem is to _____.
a) hire an export management team
b) violate the Foreign Corrupt Practices Act
c) enter into a licensing agreement with companies within the foreign country to produce the furniture there
d) submit a complaint to the US Department of Commerce
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
85) By allowing a company to purchase another existing company in the host country, a(n) _____ permits a largely domestic business to gain an international presence very quickly.
a) joint venture
b) foreign licensing agreement
c) counter trade
d) acquisition
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
86) How do export trading companies earn profits?
a) They charge a revenue tariff on the goods.
b) They ensure that no other export trading company deals in the same goods.
c) They buy competitively priced local goods and sell them at a higher price abroad.
d) They earn incentives from the government to increase exports.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
87) Maverick’s company helps the exporters of electronic items in his country to complete paperwork and comply with local laws about product labeling and performance testing. According to the information given in this scenario, Maverick most likely works for a(n) _____.
a) export management company
b) export trading company
c) local electronics vendor
d) shipping company
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
88) A small handicrafts producer enters an agreement with a large corporation to take advantage of its international presence to sell local handicrafts in the foreign market. This is an example of _____.
a) a joint venture
b) export trading
c) export management
d) an offset agreement
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
89) Speedy Motors is merging its individual operations into one so that it can offer a standardized product. It also plans to sell the product in essentially the same manner throughout the world. This strategy can best be described as a(n) _____.
a) international marketing strategy
b) orderly marketing strategy
c) global business strategy
d) multidomestic strategy
Difficulty: Medium
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
90) The Coca-Cola Company designs its ads around the world to emphasize a common theme. These ads are modified only slightly for local markets. Coca-Cola is using which of the following strategies in its international operations?
a) Global business strategy
b) Host country strategy
c) Uniform pricing strategy
d) Multidomestic strategy
Difficulty: Medium
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
91) When companies develop products and marketing strategies that appeal to the customer tastes and buying habits of particular national markets, they are using a _____.
a) global business strategy
b) free trade strategy
c) uniform strategy
d) multidomestic business strategy
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
92) Film distributors sometimes change movie titles when marketing overseas due to language or slang barriers. Studios usually allow modification of its product as part of a _____ strategy.
a) multinational
b) global business
c) multidomestic business
d) uniform
Difficulty: Medium
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
93) Companies such as Dell Computer adapt their Web sites to specific countries. These companies are following a(n) _____ strategy.
a) international marketing
b) orderly marketing
c) global business
d) multidomestic business
Difficulty: Medium
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
94) Argonia imposes a total ban on importing sugar from Paldia. What type of trade restrictions has Argonia used?
a) Quota
b) Embargo
c) Protective tariff
d) Revenue tariff
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
95) The country of Shampur has imposed a quantitative restriction on the number of luxury automobiles imported in a year. What type of trade restriction has Shampur used?
a) Quota
b) Embargo
c) Protective tariff
d) Revenue tariff
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
96) Vvey Inc., a pet accessories manufacturer, exports large quantities of its products to the United States and sells them at lower prices than it charges in its home market. Vvey Inc. could be accused of _____.
a) exporting
b) embargo
c) dumping
d) quota
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
97) The country of ABC sells mining equipment to the country of XYZ in return for cigars. This is an example of _____.
a) countertrade
b) direct exporting
c) foreign licensing
d) international production
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
98) A US clothing manufacturer allows an overseas producer to use its designs and specifications to make clothes. This is an example of _____.
a) countertrade
b) direct exporting
c) foreign licensing
d) subcontracting
Difficulty: Medium
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
Question type: True/False
99) Selling domestically produced goods and services in foreign countries refers to importing.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
100) International trade is vital to a country and its businesses because it enhances economic growth by providing a market for its products and access to needed resources.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
101) Gross domestic product (GDP) growth in the United States is higher than GDP growth in any other country.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
102) People in developing nations have higher per-capita incomes than people in developed nations.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
103) Less-developed countries represent a lucrative market for US companies because of their huge population.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
104) A country can still have an absolute advantage even if it cannot maintain a monopoly from producing a certain good.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
105) Due to its highly educated workforce and low labor costs, India has a comparative advantage in software development.
Difficulty: Medium
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
106) A country’s comparative advantage is measured only in manufactured goods.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
107) The US imports more services than it exports.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
108) A country’s balance of trade is determined by comparing the total amount of its exports to its imports.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
109) A trade surplus is a favorable balance of trade.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
110) A trade deficit exists when a nation’s exports exceed its imports.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
111) If a nation has an unfavorable balance of trade, it also has an unfavorable balance of payments.
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Analysis
112) The United States has an international trade deficit in the sale and purchase of goods but a trade surplus in services.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
113) The rate at which a nation’s currency can be exchanged for the currencies of other nations is called its exchange rate.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
114) Exchange rates are set by the various national governments.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
115) If the value of the Canadian dollar falls relative to the US dollar, Canadian exports to the United States should increase.
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Analysis
116) A weak euro is a disadvantage to European exporters.
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Analysis
117) National governments sometimes take deliberate action to devalue their currencies as a way to increase exports and stimulate foreign investment.
Difficulty: Medium
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Analysis
118) Each country’s exchange rate is generally quoted in terms of another country’s currency.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
119) Soft currencies are currencies that can be easily converted into other currencies.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
120) Cultural sensitivity is not as important of an issue in cyberspace as it is in other communication realms.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
121) Compared with the United States, Europeans value employee benefits more than low unemployment and business efficiency.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
122) A US company operating in the European Union (EU) is required to adhere to European regulations, such as mandatory vacation time.
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
123) Unlike countries included in the EU, economically speaking, the United States is a national market with a single economy.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
124) Aside from Internet access, a nation’s infrastructure includes all facilities.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
125) If a country that produces wine enacts a tariff on imported wine to match the country’s domestic wine price, this would be an example of a protective tariff.
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
126) A revenue tariff is designed to generate income for citizens.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
127) An example of a cultural barrier to global business is an import quota.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
128) If an imported product sells for more in the United States than it does in the producing country, the producing country could be accused of dumping.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
129) Interestingly, exchange controls affect exporters but not importers.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
130) Controversies regarding the World Trade Organization (WTO) include pollution and human rights abuses.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
131) The WTO makes decisions that are binding on member nations involved in disputes.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
132) The GATT, an international trade accord, has sponsored a series of negotiations, called rounds, which substantially reduced worldwide tariffs and other barriers.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
133) The government of a less-developed country wants to build several new healthcare facilities in rural areas and improve port facilities to promote exports. The World Bank would likely deny a loan for related construction projects.
Difficulty: Medium
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
134) The International Monetary Fund (IMF) was created to promote trade through financial cooperation.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
135) The United States-Mexico-Canada (USMCA) is a trade accord designed to reduce trade restrictions between the three countries.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
136) Since NAFTA, US trade with Latin American countries has tripled.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
137) Western European countries that were a part of the European Union (EU) were at first hesitant towards inviting Eastern European countries to join.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
138) With the unification in place, the euro is the currency of all EU countries.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
139) The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) relaxed trade rules benefiting agricultural producers.
Difficulty: Easy
Learning Objective 1: 03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
140) Joint ventures allow companies to share risks, costs, profits, and management responsibilities with one or more host country nationals.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
141) Indirect exporting involves producing a component that becomes part of another product sold in foreign markets.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
142) Countertrade deals are generally avoided by countries with heavy debt burdens.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
143) Another term for international bartering is countertrade.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
144) China is the least-preferred company for offshoring.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
145) One advantage of a licensing agreement is that little or no investment is required to begin operating.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
146) A partnership between companies formed for a specific undertaking is called a joint venture.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
147) A global business strategy involves separate product and marketing strategies that vary from one nation to another.
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
148) A global marketing approach is ideal for marketing luxury items due to their universal appeal.
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
149) Under a multidomestic strategy, each national market is treated the same.
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
Question type: Essay
150) What is the difference between absolute advantage and comparative advantage? Provide an example of each.
Difficulty: Easy
Learning Objective 1: 03-01: Explain why nations trade.
Section Reference 1: Why Nations Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
151) Describe floating exchange rates. Identify factors that influence foreign exchange rates.
Difficulty: Hard
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Synthesis
152) What is balance of trade? Describe its relation to trade surplus and trade deficit.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
153) List and describe the major types of obstacles confronting international trade.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
154) What are the advantages and disadvantages of imposing trade restrictions?
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
155) Describe exchange control.
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
156) Discuss why the World Trade Organization (WTO) has been the object of controversy in recent years. What concerns have been expressed?
Difficulty: Easy
Learning Objective 1 :03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
157) Explain the concept of FOREX.
Difficulty: Easy
Learning Objective 1: 03-02 Describe how trade is measured between nations.
Section Reference 1: Measuring International Business and Trade Between Nations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
158) How has United Airlines’ decision of equipping its staff with Apple iPhones improved its customer service?
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
159) How does political climate affect international business?
Difficulty: Easy
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
160) Describe the Campbell Soup Company’s efforts to prevent wastage of food.
Difficulty: Medium
Learning Objective 1: 03-03 Identify the barriers to international trade.
Section Reference 1: Barriers to International Business and Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Application
161) Differentiate between the World Bank and the International Monetary Fund.
Difficulty: Easy
Learning Objective 1 :03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
162) Define the role of the European Union (EU).
Difficulty: Easy
Learning Objective 1 :03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
163) Explain why the World Bank has been criticized.
Difficulty: Easy
Learning Objective 1 :03-04 Discuss reducing barriers to international trade.
Section Reference 1: Reducing Barriers to International Trade
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
164) Define offset agreement and describe how it might be beneficial to a small company.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
165) Explain countertrade, and describe why this form of international trade is a viable option for certain nations.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
166) Describe three contractual agreements companies can enter into when going global.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
167) Summarize the decisions a company faces when going global.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
168) Outline the responsibilities of an import coordinator.
Difficulty: Easy
Learning Objective 1: 03-05 Explain the levels of international business operations.
Section Reference 1: Levels of International Business Operations
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Knowledge
169) What is the difference between a global strategy and a multidomestic strategy for marketing goods in other nations?
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
140) Define the Chinese term guanxi. What are some advantages and disadvantages of foreign business people to practice guanxi when conducting business in China?
Difficulty: Easy
Learning Objective 1: 03-06 Discuss developing a strategy for international business.
Section Reference 1: Developing a Strategy for International Business
Standard 1: AACSB || Analytic
Standard 2: Bloom’s || Comprehension
Document Information
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