Ch. 5
Examples of orderly marketing arrangements are A. voluntary export restraints. B. Jamaica Agreement treaties. C. textile agreements. D. Japanese truck export quotas.
A
The largest government privatizing in the EU as of 2015 is A. Greece. B. Germany. C. the U.K. D. Portugal.
A
Social dumping occurs when an exporting country A. imposes an export tax on domestic businesses that export, to compensate for the opportunity cost to the domestic market. B. creates unfair competition based on lower costs because the exporting country provides little social support system to the worker. C. targets markets that consist of specific vulnerable groups in the importing country. D. exports good that are not sellable in the domestic environment due to hazards and safety issues.
B
Subsidies are problematic because they A. are administered as a form of political patronage. B. aid a nation's export businesses or protect its domestic businesses from imports. C. encourage nationalization. D. violate UN agreements.
B
An argument against using trade restrictions to punish an offending nation is that A. sanctions seldom achieve their goal of forcing change in the offending country. B. sanctions are relatively harmful to the citizens of the offending country. C. sanctions are not condoned by the UN. D. sanctions decrease the cost of doing business.
A
An example of retaliatory trade restrictions is A. the U.S. response to the EU ban of hormone-treated beef. B. the EU restraint on Microsoft for bundling its product. C. the Japanese refusal to allow U.S. military equipment in Japan. D. China's tightening control of the export of rare earths.
A
An example of the use of trade as a political weapon is A. sanctions on Russia for the occupation of Crimea in spring 2014. B. subsidies to automakers by the U.S. government to rescue them from collapse. C. exorbitant tax rates for repatriated profits in the U.S. D. Apple's exports to Cuba.
A
Canada carved out a NAFTA exception for A. milk and cream tariffs from the U.S. B. tariffs on lumber from the U.S. Northwest. C. imports of agricultural goods from Mexico. D. tariffs on fish from all of the Great Lakes.
A
Counterarguments to the "protect domestic jobs from cheap foreign labor" argument include that A. the labor rate is not all of the labor cost. B. wage rates are incidental. C. cheap foreign labor is a natural occurrence. D. comparative advantage recognizes cheap labor as a competitive right.
A
Country risk assessment is a way to A. estimate the risk to business employees, property, and investment. B. predict risk of marketing errors, given cultural variables. C. predict responses of citizens to new product lines. D. analyze the impact of diversity in a country's workforce.
A
Country risks can be responded to, in part, by A. employee training programs. B. a positive attitude and awareness of cultural differences. C. defensive posturing in most public settings. D. avoiding assignments in the country and using locals only.
A
Democratic nations that follow free-trade capitalism sometimes nationalize businesses, such as A. the U.S. bailout during the 2009 financial crisis, when the U.S. government took control of several large U.S. corporations. B. Canada's purchase of Hershey. C. The French purchase of Totale. D. the move from New York to Russia of a major sports team owned by a Russian.
A
Dumping is A. selling a product abroad for less than its production cost or cost in the home market. B. selling a product abroad tax-free and with an extended warrantee. C. exporting a product to a third country without correct documentation. D. selling a product at its domestic market value.
A
Duties may be used to A. encourage local input. B. stimulate imports. C. reward compliant manufacturers. D. increase government expenditures.
A
Examples of expropriation without compensation involve the following governments: A. the U.S. with Iranian property in the U.S., Cuba with U.S. property in Cuba, and Zimbabwe with land owned by white Zimbabwean citizens. B. China with Hong Kong and Japan with the Kuril Isl. C. the U.K. with the Falklands. D. Canada with northern Maine.
A
Government motivation for restricting trade includes A. protecting jobs, promoting defense, imposing sanctions, and protecting infant industries. B. increasing revenues through duties and tariffs. C. a desire for isolationism as a political strength. D. increasing domestic consumption and thereby domestic jobs.
A
Government protection of economic activities is A. an historical function of government. B. a recent responsibility of government. C. a socialist characteristic. D. stronger in democracies.
A
Government stability has to do with A. policies that are permanent or change gradually. B. democratic processes and free elections. C. a commitment to military strength. D. leadership that listens to citizens and responds to their needs.
A
Governments nationalize private firms in order to A. extract money from the firms when the firms are suspected of concealing profits. B. decrease exports to balance the balance of payments. C. learn about business development experientially. D. punish workers at the firms for their political activism.
A
Governments provide stability by A. protecting business from unfair competition and from attacks and theft. B. pursuing open market values. C. fostering competition and capitalist values. D. supporting imports.
A
Home country subsidies can be retaliatory because A. they decrease the operating costs of local manufacturers compared to foreign manufacturers, thereby harming the competitive profile of the foreign firms. B. they may discriminate against companies that have not contributed to the president's campaign. C. they reduce the cost basis of the foreign manufacturers. D. they are funded by taxpayers, which is all of the home country's nationals.
A
In centralized economies (China, Cuba, Vietnam) the government owns a large part of the factors of production A. and the governments of market economies also own businesses. B. unlike in market economies, where the private sector owns businesses. C. and free-trade capitalism offers an alternative, with no government-owned businesses. D. and these centralized economies avoid competition with free-traders.
A
In the U.S., the Smoot-Hawley Tariff Act did not A. outlaw tariffs for U.S. imports. B. lead to the Wall Street crash of 1929. C. establish the highest tariffs the U.S. has known. D. intend to protect U.S. agriculture.
A
Nuisance tariffs A. annoy importers with red tape, administrative paperwork, and added expense. B. are an historical anomaly. C. are found in developed nations more than in developing nations. D. have no point other than to indicate that tariffs regulations change quickly.
A
Nuisance tariffs A. require importers to go through the administrative paperwork, even for a small payment. B. can be declined at the point of import. C. are used to activate larger duty payments related to quantity. D. can be paid in kind.
A
One motivation for government privatization is to A. have the businesses run more efficiently. B. punish corporate conglomerates. C. explore alternative revenues. D. exert increased government control.
A
Productivity per worker in economically developed countries tends to be A. higher, due to management skills and advanced technology. B. lower, due to higher wages. C. irrelevant, because most factory floors are automated. D. the equivalent of productivity in less developed countries, due to motivation issues.
A
Quotas are a quantitative barrier that sets A. limits, established by the importer. B. goals, established by the exporter. C. precise quantities of imports or exports, based on price. D. expectations on domestic and foreign sales.
A
Sanctions usually are imposed to A. inflict economic harm on a nation to punish or force change. B. protect an infant industry. C. exact retribution for past conflicts. D. increase the cost of doing business in the sanctioned nation for foreign competitors.
A
Social dumping occurs when exporting producers A. have lower wage rates, social costs, and environmental regulations. B. allow for free migration, thereby exporting poverty. C. allow the import of environmentally sensitive waste. D. take knowing advantage of a social class system.
A
Some nontariff barriers are difficult to discourage because A. they are non-quantitative and consist of government subsidies and standards. B. their development has been supported by local politicians. C. they build on nationalism and patriotism. D. their development has been unsupervised.
A
Tariff barriers may be used to A. protect domestic industry from foreign, lower-cost producers. B. reduce the need for foreign workers. C. increase government revenues. D. protect borders from gray market goods.
A
Tariffs may be set to A. encourage local input. B. decrease the import costs. C. stimulate imports. D. decrease consumer costs, lower price, and increase market share.
A
Terrorism contributes to A. an unstable environment that is detrimental to business. B. an increase in business opportunities. C. the warning signals on global values clashes. D. religious and political stability.
A
The U.S. allocates quotas to 40 countries for specific tonnages of A. sugar. B. roast beef. C. malt beer. D. rice.
A
The cost of cybercrime to the perpetrator is A. exceedingly high, so as to be a deterrent. B. almost nonexistent, because few criminals are apprehended. C. difficult to determine, because security issues prohibit publication of trials. D. negligible, because few laws have been updated to include cybercrime.
A
The cybercrime context is A. fluid, so the learning process is ongoing, because cyber criminals are bright and quick. B. relatively static, so a firewall can be effective for a good six months in this environment. C. rapidly evolving, so that cybercrime will soon be eliminated. D. increasingly competitive, with switchovers between security personnel and criminals.
A
The main goal of tariffs is to A. increase the selling price of imported goods, thereby reducing competition for domestic producers. B. raise revenues for the importing government. C. reduce earnings for the exporting government. D. penalize importers for not buying domestic goods.
A
The most common form of direct government participation in trade is A. the subsidy. B. shipping on national vessels. C. import duties. D. a combination of subsidy, shipping, and import duties.
A
The national defense argument for trade restrictions suggests that A. some industries, even if they are not competitive, may need protection from imports. B. the military is an area that can be exempted from import restrictions. C. national defense requires no trade restrictions. D. exporters of matériel would do well to monitor trade restrictions and permissions.
A
The sectors most frequently attacked by cyber criminals include A. defense, energy and utilities, and finance. B. retail. C. oil and gas. D. the auto industry.
A
Barriers to trade A. are a political issue, but don't affect the cost of imports except marginally. B. cost consumers billions of dollars per year. C. save jobs in unprotected industries at $231,289 per job per year. D. None of these responses completes the phrase accurately.
B
Sanctions against nations are A. not a form of trade restriction because the motivation is political. B. a form of trade restriction that has economic and political impact. C. ineffective, because other nations will violate them. D. a way to conduct peaceful trade without disturbing commerce.
B
The primary motivation of tariffs is to A. raise government revenue at the cost of importers. B. raise the price of imports, to protect domestic goods. C. punish countries over political issues. D. encourage foreign consumption.
B
What is the role of the home country in risk assessment? A. It has no role. What matters is the country in which the business is conducted. B. It is a significant consideration. C. It is used initially, but then more micro issues become the focus of CRA. D. Country risk does not involve political considerations at all.
B
Although the U.S. supports free trade, since 1789 it has supported tariffs to protect domestic A. wheat. B. palm oil. C. sugar. D. corn.
C
Transshipping is used to A. reduce shipping costs, as a form of consolidation. B. avoid import administration. C. evade allocated quotas. D. evade local manufacture requirements.
C
A nontariff barrier is illustrated by all but A. the French requirement in 1982 that all Japanese VCRs be inspected in Poitiers, far from the port and up a windy mountain road. B. the widespread Japanese belief that American rice can cause cancer. C. the European attitude toward genetically modified crops. D. the preference of some Indonesians for betel nut.
D
Arguments for trade restrictions include all but A. national defense, infant industry, and job protection. B. punishment of offending nations. C. fair competition and retaliation. D. sovereignty rights.
D
Government stability refers to all but one of the following of a government: A. policies, that they endure over time. B. ability to keep itself in power. C. ability to hold to predictable fiscal, monetary, and political policies. D. ability to adjust to sudden changes by making radical policy changes.
D
Official prices ensure all but that A. imported goods will be sold at minimum prices, to avoid dumping. B. a black market will be healthy and available for imported goods. C. low-priced invoices to avoid tariffs will not be successful. D. corruption will be minimal.
D
When governments nationalize a firm, they don't seek to A. extract more money from the firm. B. increase the firm's profitability. C. preserve jobs. D. sell the firm to foreign investors.
D
With privatization, all of these may occur, except A. assets are transferred from the public sector to the private sector. B. government control of business management may be increased. C. state activities are moved into private management through contracts. D. business loses its right to hire new employees.
D
One critical issue related to ransom is A. whether to pay and possibly save a life, but reinforce the effectiveness of ransom. B. how to fund ransom payments. C. whether ransom is connect to piracy. D. the safety of those who are being held without access to ATMs.
A
"In nearly every economic crisis, the root cause is political, not economic," observed A. Abraham Lincoln. B. Lee Kuan Yew. C. Adam Smith. D. Ben Bernake.
B
Import duties can be set to encourage A. increased imports based on sales volumes. B. local input. C. price fixing. D. imports from other suppliers.
B
Nationalization and privatization are A. similar trends. B. opposing trends. C. both risks faced by privately held firms. D. both risks not encountered in capitalist democracies.
B
Non-quantitative nontariff barriers A. are not counted as nontariff barriers. B. often involve government participation in trade, especially in customs and other administrative procedures. C. often involve ownership. D. are virtual barriers.
B
Unlike quotas, voluntary export restraints (VERs) are imposed by A. the importing country's government. B. the exporting country's government. C. either the importing or exporting country's government; what matters is that they are voluntary. D. the importing company.
B
A government protects its citizens when they are abroad in the following way: A. A powerful country can send in the marines to protect citizens. B. A government can assert the rights of its citizens and that its laws follow its citizens, no matter where they are (extraterritoriality). C. Politicians can influence how a foreign country's rules are applied to its own nationals. D. Government embassies can provide information and emergency assistance, monitor and where appropriate, make protests.
D
An example of environmental dumping is not found in the A. maquiladora plants of Mexico, located near the U.S. border and operating at lower environmental standards than would be required in the U.S. B. nuclear waste shipments to developing nations. C. garbage shipments from New Jersey to developing nations. D. recycling and processing of Virginia garbage to yield fuel and fertilizer.
D
The imposition of standards is a way to establish nontariff barriers, and the following are examples of the imposition of standards, except for: A. Japan's refusal to import light mayonnaise containing potassium sorbate. B. Canada's categorization of orange juice with added calcium as a drug, subject to special requirements. C. the prohibition of imported drugs at the consumer level in the U.S. D. tariffs on certain barbiturate imports into the U.S.
D
The trend for firms in regard to country risk assessment (CRA) is to A. avoid it as an added cost in competitive markets. B. concentrate much more on CRA in making decisions about foreign activities. C. use CRA in obviously dangerous locations, but only in those situations, to control costs. D. hire consultants to reduce CRA insurance costs.
B
Trade barriers create costs that are paid ultimately by the A. government erecting the barrier. B. consumer. C. country exporting the goods. D. exporter.
B
Dumping includes A. the foreign exporter's selling better products into the market than those manufactured in the home country. B. black market sales to avoid prohibited substances, such as weapons, alcohol, and pornography. C. selling goods priced lower in a foreign market than in the home market to build market share. D. expanding fast-food franchise operations in foreign markets.
C
Government stability is a characteristic of a government that A. makes sudden radical policy changes. B. readily shifts alliances to maintain power. C. maintains predictability in fiscal, monetary, and political policies. D. maintains authoritarian rule over an extended period of time.
C
A specific duty is a A. fixed sum charged for a specified number of units of the product. B. stated percentage of the invoice of the product. C. duty established for a given, articulated reason. D. rate charged in excess of a compound duty.
A
Agricultural trade restrictions A. exist in most countries. B. exist in centralized economies only. C. exist mostly in developing economies. D. are no longer a part of common trade restrictions.
A
Among the cybercrimes that most often target businesses are A. hacking and data espionage. B. check kiting. C. prospecting and phishing. D. accessing unauthorized accounts.
A
Businesses that conduct country risk assessment do so A. as part of their legal profile. B. to protect their assets, including people and property. C. to satisfy their top management teams. D. because, much as with executive salaries, there is a herd mentality.
B
Country risk assessment is a measure of the A. threat of nationalization. B. threat of losing an investment or not being paid. C. kidnapping rate. D. rate of unfunded exposures.
B
Customs procedures in many countries often A. are transparent and fair. B. discriminate against imports and favor exports. C. are online and impersonal. D. aid importers and exporters in estimating their total costs
B
International business can be a power political force, in part because A. a recent Supreme Court ruling in the U.S. allows corporate contributions to political campaigns. B. many top management team members are willing to accept roles with national security agencies. C. about half of the world's 100 largest economic units are firms. D. business is all about achieving political goals.
C
The U.S. has been concerned about dumping and A. yet only enacted antidumping measures in 2006. B. enacted antidumping measures for its exporting companies as early as 1856. C. became one of the first countries to prohibit dumping into its own market, in 1916. D. illustrated this with the Boston Tea Party in 1773.
C
The national defense argument for trade restrictions has been used in the U.S. to argue for restriction on exports A. of subway cars. B. of uniforms. C. of high technology items. D. of ethanol.
C
