Question 1

Who are the top two export partners of the United States?

Accepted Answer

A)  Japan and China
B)  Canada and the United Kingdom
C)  Mexico and Canada
D)  Mexico and China
E)  The United Kingdom and JapanF) A) and B)
G) All of the above

Question 2

____ is the ability to produce a specific product more efficiently than any other product.

Accepted Answer

A)  Absolute advantage
B)  Specialization
C)  Relative advantage
D)  Dominant advantage
E)  Comparative advantageF) B) and C)
G) All of the above

Question 3

A new country is formed in central Africa. It has no absolute advantage in crude oil, diamonds, or wool. However, it does manufacture high-quality bows and arrows for specialized safari adventures. Which of the following statement is true?​

Accepted Answer

A)  ​The new country should try to produce its own crude oil, diamonds, and wool.
B)  ​The new country has a comparative advantage in the production of bows and arrows.
C)  ​The new country has an unqualified advantage in the production of bows and arrows.
D)  ​The new country has a determined advantage in the production of arrows.
E)  ​The new country is engaged in dumping bows and arrows.F) C) and E)
G) D) and E)

Question 4

If Germany exports $100,000 of sauerkraut to Jamaica and purchases $100,000 of Blue Mountain coffee beans from Jamaica, Germany has

Accepted Answer

A)  an overall favorable balance of trade.
B)  an overall unfavorable balance of trade.
C)  a favorable balance of trade with Jamaica.
D)  neither a favorable nor an unfavorable balance of trade with Jamaica.
E)  an unfavorable balance of trade with Jamaica.F) None of the above
G) All of the above

Question 5

Balance of payments is a much broader concept than balance of trade.

Accepted Answer

A) True 
 B)False

Question 6

The payments portion of the balance of payments--that is, payments made by the United States--does not include

Accepted Answer

A)  exports.
B)  imports.
C)  military spending.
D)  foreign aid.
E)  investments.F) B) and C)
G) A) and E)

Question 7

Ford Motor Company, Mazda Motor Corporation, and Matsushita Electrical Industrial Company formed a ____ to make heating and cooling units in Japan for Mazda cars beginning in 1988. The new company's heating and cooling units may also be used in Ford's cars.

Accepted Answer

A)  sales branch
B)  joint venture
C)  subsidiary
D)  licensing agreement
E)  sole proprietorshipF) B) and D)
G) C) and E)

Question 8

In 1967, several Asian countries banded together to reduce the trade barriers between them and encourage trading among themselves. This is known as

Accepted Answer

A)  a GATT.
B)  the European Union.
C)  the Association of Southeast Asian Nations.
D)  a multinational.
E)  an orderly marketing agreement.F) A) and E)
G) A) and B)

Question 9

What does the International Monetary Fund (IMF) do for nations with an unfavorable balance of trade?

Accepted Answer

The International Monetary Fund (IMF) is...

Question 10

The participants in the Kennedy Round have succeeded in reducing tariffs by less than 20 percent.

Accepted Answer

A) True 
 B)False

Question 11

Who are the two largest contributors to the Asian Development Bank?

Accepted Answer

A)  China and Japan
B)  Japan and India
C)  The United States and Japan
D)  Russia and China
E)  China and IndonesiaF) A) and D)
G) A) and B)

Question 12

By definition, every country has a comparative advantage in some product.

Accepted Answer

A) True 
 B)False

Question 13

Miller Beer allows a Canadian firm to use its name, formula, and brands in return for a royalty. This is known as

Accepted Answer

A)  exporting.
B)  licensing.
C)  direct investment.
D)  manufacturing in foreign countries.
E)  none of the above.F) D) and E)
G) B) and D)

Question 14

The best method of learning from experience in international business is to

Accepted Answer

A)  enter into a licensing agreement.
B)  start exporting through an export merchant.
C)  start exporting through an export agent.
D)  invest directly in a foreign country.
E)  form a joint venture.F) B) and E)
G) B) and C)

Question 15

The newest forms of international business structure developed to create competitive advantage on a worldwide basis are called

Accepted Answer

A)  licensees.
B)  export agents.
C)  strategic alliances.
D)  trading companies.
E)  countertraders.F) A) and E)
G) C) and E)

Question 16

Countertrade is an international barter transaction in which

Accepted Answer

A)  goods and services are exchanged for different goods and services.
B)  one company sells goods and services under the counter.
C)  the buyers and sellers trade illegally.
D)  one company manufactures and the other company owns the assets.
E)  none of the above is correct.F) B) and E)
G) B) and D)

Question 17

Licensing and exporting can be considered relatively low-risk methods of entering foreign markets.

Accepted Answer

A) True 
 B)False

Question 18

Trade restrictions limit choices for consumers but have no effect on the prices charged for the products.

Accepted Answer

A) True 
 B)False

Question 19

A ____ is issued by the exporter's bank, ordering the importer's bank to pay for the merchandise.

Accepted Answer

A)  license
B)  letter of credit
C)  bill of lading
D)  draft
E)  voucherF) A) and B)
G) A) and C)

Question 20

A letter of credit is issued in favor of the importer.

Accepted Answer

A) True 
 B)False

Exam 3: Exploring Global Business

Who are the two largest contributors to the Asian Development Bank?

Correct AnswerverifiedShow Answer

Balance of payments is a much broader concept than balance of trade.

Correct AnswerverifiedShow Answer

A new country is formed in central Africa. It has no absolute advantage in crude oil, diamonds, or wool. However, it does manufacture high-quality bows and arrows for specialized safari adventures. Which of the following statement is true?​

Correct AnswerverifiedShow Answer

A ____ is issued by the exporter's bank, ordering the importer's bank to pay for the merchandise.

Correct AnswerverifiedShow Answer

Countertrade is an international barter transaction in which

Correct AnswerverifiedShow Answer

If Germany exports $100,000 of sauerkraut to Jamaica and purchases $100,000 of Blue Mountain coffee beans from Jamaica, Germany has

Correct AnswerverifiedShow Answer

Who are the top two export partners of the United States?

Correct AnswerverifiedShow Answer

The best method of learning from experience in international business is to

Correct AnswerverifiedShow Answer

____ is the ability to produce a specific product more efficiently than any other product.

Correct AnswerverifiedShow Answer

Ford Motor Company, Mazda Motor Corporation, and Matsushita Electrical Industrial Company formed a ____ to make heating and cooling units in Japan for Mazda cars beginning in 1988. The new company's heating and cooling units may also be used in Ford's cars.

Correct AnswerverifiedShow Answer

Licensing and exporting can be considered relatively low-risk methods of entering foreign markets.

Correct AnswerverifiedShow Answer

What does the International Monetary Fund (IMF) do for nations with an unfavorable balance of trade?

Correct AnswerverifiedThe International Monetary Fund (IMF) is...View AnswerShow Answer

Miller Beer allows a Canadian firm to use its name, formula, and brands in return for a royalty. This is known as

Correct AnswerverifiedShow Answer

Trade restrictions limit choices for consumers but have no effect on the prices charged for the products.

Correct AnswerverifiedShow Answer

The newest forms of international business structure developed to create competitive advantage on a worldwide basis are called

Correct AnswerverifiedShow Answer

The payments portion of the balance of payments--that is, payments made by the United States--does not include

Correct AnswerverifiedShow Answer

The participants in the Kennedy Round have succeeded in reducing tariffs by less than 20 percent.

Correct AnswerverifiedShow Answer

A letter of credit is issued in favor of the importer.

Correct AnswerverifiedShow Answer

By definition, every country has a comparative advantage in some product.

Correct AnswerverifiedShow Answer

In 1967, several Asian countries banded together to reduce the trade barriers between them and encourage trading among themselves. This is known as

Correct AnswerverifiedShow Answer

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A new country is formed in central Africa. It has no absolute advantage in crude oil, diamonds, or wool. However, it does manufacture high-quality bows and arrows for specialized safari adventures. Which of the following statement is true?

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The International Monetary Fund (IMF) is...
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