chapter 3 quiz

The newest free trade agreement is the _____. Participants in this agreement are the United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Nicaragua, and Honduras.

CAFTA Central America Free Trade Agreement

_____ is a form of barter in which countries trade goods and services.

Countertrade

What new trade organization was created by the Uruguay Round to replace the old General Agreement on Tariffs and Trade (GATT)?

Multifiber Arrangement (MFA)

Capital Radio PLC, the United Kingdom's biggest commercial radio firm announced in 2002 that it would cooperate with Walt Disney Co. to create a radio network for children under the age of 16. The company will broadcast to a potential audience of 25 million under the name Capital Disney. This new radio network will be created as the result of:

joint venture

Meter-Man Inc. manufactures agricultural measuring devices in a small town in Minnesota. Meter-Man sells these devices to farmers in Brazil, Venezuela, and Argentina. Meter-Man is _____ measuring devices to South American nations.

exporting

According to the principle of absolute advantage, each country should specialize in the products that it can produce most readily and cheaply and trade those products for products that foreign countries can produce most readily and cheaply.

false

When a domestic company allows a foreign firm to use its brand in exchange for royalty fees, it is called a joint venture.

false

A country that exports more goods than it imports is said to have a(n):

favorable balance of trade

The need for businesses to expand their markets is one of the most fundamental reasons for the growth in world trade.

true

The opposite of free trade is protectionism.

true

The signing of the Central America Free Trade Agreement by the United States will more than likely not result in a major increase of U.S. exports.

true

The Uruguay Round of trade negotiations:

was the most ambitious global trade agreement ever negotiated

List the two international financial organizations that are instrumental in fostering global trade.

The World Bank and International Monetary Fund

The _____, formerly the International Bank for Reconstruction and Development, is a bank that offers low-interest loans to developing nations.

World Bank

Because the United States produces hospital surgical equipment more efficiently than any other country, the U.S. has a(n) _____ advantage in its production.

comparative

In 2018, the country of Brazil, had imports of $78.02 billion and had a favorable balance of trade. This means that Brazil had:

more than $78.02 billion in exports

The Royal Government of Bhutan imposes a 10 percent tax on all operating tables, examination tables, and dentist's chairs imported into Bhutan. Another name for this type of tax is a(n):

tariff