BA 101 Quiz #2

The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries.

World Bank

Currency markets operate under a system called _____. This means that prices of currencies vary based upon demand and supply of that currency.

floating exchange rate

A policy of permitting the people of a country to buy and sell where they please, without restrictions, is called:

free trade

Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners. These are called:

free trade zones

The U.S. has one of the very few areas in the world where kaolin can be mined. Kaolin is a necessary ingredient in many products ranging from stomach medication to paper. The U.S.-produced kaolin is sold all over the world. Kaolin is a(n) _____ for the countries that purchase it.

import

U.S. plane manufacturer McDonnell-Douglas has authorized Mitsubishi Heavy Industries, a Japanese company, to use its trademarks, patents, and other proprietary knowledge to manufacture F-15 fighter planes. Mitsubishi Heavy Industries pays McDonnell-Douglas. This is an example of:

licensing

A(n) _____ is a tax levied by a nation on imported goods.

tariff

What are the benefits associated with free trade and globalization?

Higher probability that inflation will arrest economic growth

_____ refers to sending work functions to another country resulting in domestic workers losing their jobs.

Outsourcing

An enterprise in which two or more firms or investors (including governments) share ownership of a business and its property rights is called a(n):

joint venture

A company that has a global vision:

recognizes and reacts to international business opportunities

_____ are goods and services that are made in one country and sold to other countries.

Exports

The World Trade Organization (WTO):

as emerged as the world's most powerful institution for reducing trade barriers and opening markets

If a country specializes in goods that it can produce most readily and cheaply and trades those goods for the goods that another country can produce most readily and cheaply, then both countries are exercising the principle of:

comparative advantage

A total prohibition against importing certain products is called a(n):

embargo

Active ownership of a foreign company, with direct investors having either a controlling or a large minority interest in the firm, is called a(n):

direct foreign investment

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

favorable balance of trade

The difference between a country's total payments to other countries and its total receipts from other countries is called its:

balance of payments

_____ are limitations on the quantity of certain types of goods that can be imported over a period of time.

Import quotas

_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.

Multinational corporations