BUS 280 MIDTERM

An additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy is called a(n) ________. A) countervailing duty B) ad valorem tariff C) antidumping duty D) compound tariff

A) countervailing duty

Detailed knowledge about a culture that enables people to work happily and effectively within it is called ________. A) cultural literacy B) cultural imperialism C) cultural diffusion D) cultural divergence

A) cultural literacy

As a result of globalization, Argonia finds that its national borders are becoming less relevant. This indicates that Argonia is undergoing ________. A) denationalization B) standardization C) reorganization D) internationalization

A) denationalization

When a company exports a product at a price that is lower than the price normally charged in its domestic market or lower than the cost of production, it is said to be ________. A) dumping B) ringfencing C) hoarding D) cost-shifting

A) dumping

Which of the following refers to the use of computer networks to purchase, sell, or exchange products; service customers; and collaborate with partners? A) e-commerce B) telecommuting C) data virtualization D) virtual hosting

A) e-commerce

Which of the following terms applies to the sale of a particular brand of jeans manufactured in the U.S. and sold in Canadian stores? A) exporting B) outsourcing C) insourcing D) importing

A) exporting

Nepotism often prevails in ________ cultures. A) extended-family B) individualistic C) monotheistic D) nuclear family

A) extended-family

Ethnocentricity can be defined as the ________. A) scientific description of individual human societies B) systematic study of an ethnic group's religious core C) merging of all ethnic practices into one homogeneous culture D) belief that one's own ethnic group or culture is superior to that of others

D) belief that one's own ethnic group or culture is superior to that of others

Which of the following is defined as a group of people who share a unique way of life within a larger, dominant culture? A) macroculture B) subculture C) cultural universal D) monoculture

B) subculture

In most centrally planned economies that failed, ________. A) market conditions had determined who would produce goods B) prices of products were seen as a function of supply and demand C) central planning agencies had specified the production goals D) central planners had paid attention to efficiency improvement

D) central planners had paid attention to efficiency improvement

Which of the following terms refers to the forced transfer of assets from a company to the government without compensation? A) expropriation B) nationalism C) nationalization D) confiscation

D) confiscation

The United States has banned all trade and investment with Cuba since 1962. This is an example of which type of government political intervention? A.Trade retaliation B.Exposing Cuba to new ways of life C.National security protection D.Gaining influence E.Protection from import competition

D. Gaining influence

Which of the following disagrees with the concept of centrally planned economies? A) At the time of their collapse, standards of living in most centrally planned economies were at or above those of market economies. B) Basic necessities were often not provided to citizens in centrally planned economies. C) Underground economies for goods and services thrived in most centrally planned economies. D) Prices on the black market were much higher than the official prices set by governments.

A) At the time of their collapse, standards of living in most centrally planned economies were at or above those of market economies.

________ refers to the unwanted cultural influence in a nation that can cause great distress and lead governments to block imports it believes to be harmful. A) Cultural imperialism B) Cultural protectionism C) Dumping D) Capitalism

A) Cultural imperialism

The ________ of a country is its gross national product divided by its population. A) GNP per capita B) GDP per capita C) purchasing power parity D) purchasing power

A) GNP per capita

Which of the following industries is typically protected for national security reasons? A) agriculture B) textile C) automobile D) housing

A) agriculture

Which of the following is not a policy designed to encourage FDI? A. the manipulation of tax rules to try to encourage investment at home B. capital assistance C. tax incentives D. foreign risk insurance

A. the manipulation of tax rules to try to encourage investment at home

Which of the following trade theories indicates that government may play a role in assisting its home companies and that government involvement has always been widely accepted in undertakings such as space exploration for national security reasons? A.Comparative advantage B.Product life cycle C. leontief paradox D.New trade E.Absolute advantage

A.Comparative advantage

The practice of mercantilism rested on three essential pillars. Which of the following are these three pillars? A.Trade surpluses, government intervention, and colonialism B.Free trade, subsidizing export, and banning imports C.Free trade, government intervention, and colonialism D.Colonialism, maximize production, and product standardization E.Free trade, colonialism, and strict government intervention

A.Trade surpluses, government intervention, and colonialism

The GDP per capita of a country is lower than that of France. If the GDP per capita of the country is adjusted for PPP, the country's revised GDP is higher than that of France. Which of the following is most likely true about the country? A) The cost of living in the country is higher than that of France. B) The cost of living in the country is lower than that of France. C) The cost of living in the country is approximately equal to that of France. D) The cost of living in the country has increased over the past decade.

B) The cost of living in the country is lower than that of France.

Which of the following is a political motive behind a government's intervention in trade? A) promoting a strategic trade policy B) gaining influence over other nations C) protecting a country from unwanted cultural influence D) protecting young industries from competition

B) gaining influence over other nations

The segment of the economic environment comprising independently owned firms that seek to earn profits is called the ________. A) political sector B) private sector C) democratic sector D) public sector

B) private sector

The creation of the ________ was perhaps the greatest achievement of the 1986 Uruguay Round. A.World Bank B.World Trade Organization C.International Monetary Fund D. Overseas Private Investment Corporation E.World Health Organization

B.World Trade Organization

________ is the trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies. A) Privatization B) Heterogenization C) Globalization D) Decentralization

C) Globalization

Which of the following is true of government interventions in a country's trade practices? A) A major economic motive behind government intervention in trade is the protection of jobs. B) A major political motive behind government intervention in trade is the protection of infant industries. C) Government interventions help companies take advantage of economies of scale and be the first movers in their industries. D) Governments intervene to protect only imports, as the protection of exports is handled by private agencies.

C) Government interventions help companies take advantage of economies of scale and be the first movers in their industries.

Which of the following terms refers to the broadest measure of economic development of a country? A) gross domestic product (GDP) B) purchasing power parity (PPP) C) gross national product (GNP) D) human development index (HDI)

C) gross national product (GNP)

Which of the following measures the extent to which a government equitably provides its people with a long and healthy life, an education, and a decent standard of living? A) category development index B) gross national product index C) human development index D) purchasing power index

C) human development index

________ tend to occupy the highest social layer in industrialized countries. A) Teachers B) Scientists C) Medical doctors D) Business leaders

D) Business leaders

Which of the following forms of economic integration describes the most integration among countries? a) common market. b) economic union. c) common union. d) free trade area.

b) economic union.

If you believe in making decisions for the good of most people, you can be described as following which school of thought? a. Moral principles b. Utilitarianism c. Human rights d. Individualism

b. Utilitarianism

Which of the following statements most accurately describe the nature of an ethical issue in business? a. Ethical issues are difficult because the results of a decision are hard to predict b. Ethical issues can be resolved if you do what you think is right c. Ethical issues are difficult because all the choices may do some harm d. Ethical issues can be resolved by following the guidance of religious beliefs

c. Ethical issues are difficult because all the choices may do some harm

Milton Friedman stated his belief that 'there is only one social responsibility' for a company to use its resources to: a. Provide good facilities for workers b. Ensure employment c. Increase profits so long as it stays within the rules of the game d. Give as much to charitable causes as possible

c. Increase profits so long as it stays within the rules of the game

Which of the following philosophies asserts that ownership of the means of production belongs in the hands of individuals and private businesses? A) capitalism B) communism C) tribalism D) socialism

A) capitalism

________ is the value of all goods and services produced by the domestic economy over a one-year period. A) Gross domestic product (GDP) B) Human development index (HDI) C) Gross national product (GNP) D) Purchasing power parity (PPP)

A) Gross domestic product (GDP)

Which of the following is true about economic development of a nation? A) The purchasing power parity is a poor indicator of a people's total well-being. B) GDP is a larger figure and includes a nation's income generated from exports, imports, and international operations. C) Illegal activities such as gambling and black market transactions are considered in GDP and GNP. D) Using gross product figures to compare production across countries accounts for different cost of living in each country.

A) The purchasing power parity is a poor indicator of a people's total well-being.

Which of the following countries is seen as a threat to national cultures around the world? A) United States B) India C) Russia D) France

A) United States

Which of the following emerged during the failure of centrally planned economic systems? A) black markets B) public markets C) free enterprise system D) market economies

A) black markets

According to mercantilism, the accumulation of national wealth depended on the ________. A) increase in a nation's trade surplus B) increase in a nation's trade deficit C) expansion of a nation's total value of trade D) expansion of a nation's total volume of trade

A) increase in a nation's trade surplus

The term ________ refers to entities cooperating across national boundaries. A) internationalization B) supranationalism C) denationalization D) multiculturalism

A) internationalization

The measures of a nation's well-being other than the financial wealth accumulated through exports are irrelevant according to ________. A) mercantilism B) absolute advantage theory C) factor proportions theory D) new trade theory

A) mercantilism

A country that has recently increased the portion of its national production and exports derived from industrial operations is called a(n) ________. A) newly industrialized country (NIC) B) developing country C) emerging market D) developed country

A) newly industrialized country (NIC)

Most companies today operate in an environment of increased transparency and scrutiny regarding their business activities. This is due to ________. A) the rise of the social media B) the prosperity of developing nations C) the heterogeneity in markets D) labor market flexibility in developing nations

A) the rise of the social media

Which of the following statements BEST expresses the core beliefs of mercantilism? A.Nations should increase their wealth by increasing their exports and minimizing their imports. B.Nations should trade with other nations to obtain the goods they need, but don't produce. C.International trade is a positive-sum game. D.Governments acquire wealth through unrestrictive trade policies. E.Trade should be allowed to flow as dictated by market forces, not by government intervention.

A.Nations should increase their wealth by increasing their exports and minimizing their imports.

________ is an effective alternative to traditional distribution channels for firms that sell digitized products. A) Dual licensing B) Electronic distribution C) Visual merchandising D) Digital switchover

B) Electronic distribution

Who among the following popularized the idea of central economic planning in the nineteenth century? A) Frederick Taylor B) Karl Marx C) Peter Drucker D) Henry Fayol

B) Karl Marx

Which of the following terms is used to refer to the process of ranking people into social layers or classes? A) social transformation B) social stratification C) social loafing D) social mobility

B) social stratification

Which of the following statements is true about cultural influences? A) Culture and trade are independent of each other. B) Unwanted cultural influence in a nation can cause governments to block imports that it believes are harmful. C) The cultures of countries are independent of the effects of exposure to the people and products of other cultures. D) The culture of the United States is readily adapted into the local culture of countries all over the world.

B) Unwanted cultural influence in a nation can cause governments to block imports that it believes are harmful.

Which of the following is an example of a dual use product? A) a blowdryer B) a GPS navigation device C) a food processor D) a vacuum cleaner

B) a GPS navigation device

The condition that results when the value of a nation's exports is greater than the value of its imports is called ________. A) a trade deficit B) a trade surplus C) mercantilism D) dumping

B) a trade surplus

Gentian Violet is a dye manufacturing company that uses computer networks to sell its products, service customers, and collaborate with partners. Which of the following technologies is the company engaging in this scenario? A) rapid prototyping B) e-business C) simulation D) console automation

B) e-business

Which of the following is prompting farmers in many developed nations to discover new ways to manage risk and increase agricultural efficiency? A) enforcement of trade embargoes and tariffs B) exposure of agribusiness to market forces C) provision of extensive government subsidies D) designation of agricultural products as dual use products

B) exposure of agribusiness to market forces

Which of the following refers to convergence in buyer preferences in markets around the world? A) heterogenization of markets B) globalization of markets C) segmentation of markets D) nationalization of markets

B) globalization of markets

Globalization is characterized by ________ A) the demise of democracy within a nation B) national boundaries becoming less relevant C) the fortification of trade barriers D) rigid foreign relations policies

B) national boundaries becoming less relevant

The rise of a new international entity called the ________ suggests that any company, regardless of age, experience, and resources, can engage in international business. A) transnational corporation B) multinational corporation C) born global firm D) global firm

C) born global firm

Which of the following is TRUE with regard to the factor proportions theory A. Nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports. B. Countries produce and export goods which require resources that are abundant and import goods that require resources in short supply. C. Trade is still beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods. D. A nation has the ability to produce a good more efficiently than any other nation. E. A nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade

B. Countries produce and export goods which require resources that are abundant and import goods that require resources in short supply.

Which of the following represents the core of the national competitive advantage theory? A.Trade is still beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods. B.A nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade. C.A country may dominate in the export of a certain product because it has a home-based firm that has acquired a first-mover advantage. D.International trade is a positive-sum game. E.Countries produce and export goods that require resources that are abundant and import goods that require resources in short supply.

B.A nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.

Country X specializes in the production of corn more efficiently than any other nation and buys rice which it produces less efficiently than corn from Country Z, despite the fact that Country Z produces rice less efficiently than Country X. Which of the following international trade theories agree with Country X's decision to buy rice from Country Z? A.Factor proportions theory B.Comparative advantage C.Absolute advantage D.Mercantilism E.International product life cycle

B.Comparative advantage

A government may impose an import quota to protect its domestic producers by placing a limit on the amount of goods allowed to enter the country. Who are the winners of imposing such quotas?A.Consumers B.Domestic producers C.Companies relying on the importation of so-called intermediate goods D. Domestic producers that rely on the import of product subject to quotas E.Exporters

B.Domestic producers

Which of the following was a prominent mercantilist nation? A) U.S. B) China C) Britain D) Japan

C) Britain

An investor wants to invest in a country that has a high gross national income (GNI). Which of the following countries would most likely qualify as a prospect? A) Nepal B) India C) Japan D) Vietnam

C) Japan

________ is the value of goods and services that can be purchased with one unit of a country's currency. A) Potential output B) Gross national product C) Purchasing power D) Gross domestic product

C) Purchasing power

Which of the following terms is used to refer to the exchange of goods and services for other goods and services instead of money?A) fiat money B) letter of credit C) barter D) guanxi

C) barter

The purpose of ________ is to force companies from other nations to use local resources in their production processes, particularly labor. A) administrative delays B) currency controls C) local content requirements D) voluntary export restraints

C) local content requirements

A business that has direct investments (in the form of marketing or manufacturing subsidiaries) abroad in several countries is called a ________. A) dummy corporation B) shell corporation C) multinational corporation D) domestic corporation

C) multinational corporation

The practice by which managers and other employees find jobs within their own companies for relatives is known as ________. A) ethnocentricism B) enculturation C) nepotism D) stratification

C) nepotism

Which of the following is the main cultural motive behind government intervention in trade? A) promotion of strategic trade policies B) protection of jobs C) protection of national identity D) protection of young industries from competition

C) protection of national identity

Which of the following do products designated as dual use require before exports can take place? A) currency controls B) countervailing duties C) special government approval D) local content requirements

C) special government approval

The Toro-Hessians are a minority group in the Margoza Archipelago, with a set of preferences, attitudes, and taboos, distinct from that of the national culture. Therefore, they are often overlooked when foreign businesses choose to customize their products for the inhabitants of the islands. The Toro-Hessian community is an example of ________. A) cultural universal B) monoculture C) subculture D) stratification

C) subculture

Governments often promote exports by helping companies finance their export activities. Which U.S. financing entity finances the export activities of companies in the United States and offers insurance on foreign accounts receivable? A.Overseas Private Investment Corporation B.International Monetary Fund C.Ex-Im Bank D.World Bank

C.Ex-Im Bank

Which of the following statements BEST explains the benefits of international trade to nations? A.International trade increases tariff charges on imported goods to generate more revenue for the country. B.International trade helps countries to limit its import in order to protect its infant industries. C.International trade is an important engine for job creation. D.International trade protects countries increase the demand of its own domestic products. E.International trade helps countries limit access to products it cannot produce.

C.International trade is an important engine for job creation.

Which of the following does NOT describe the theory of absolute advantage? A.It allows the flow of trade as dictated by market forces. B.It's the ability of a nation to produce a good more efficiently than any other nation. C.It allows for government intervention in international trade. D.International trade should not be banned or restricted by tariffs and quotas. E.A nation with an absolute advantage can produce a greater output of a good or service than other nations using the same amount of, or fewer, resources.

C.It allows for government intervention in international trade.

Governments of most nations have special agencies responsible for promoting exports. Which of the following is NOT a type of export promotion? A.Organizing trade missions B.Opening trade offices in other countries C.Paying import duties D.Arranging meetings with suitable distributors and partners E.Advertising in foreign countries trade magazines

C.Paying import duties

All of the following are political motives behind government intervention in trade EXCEPT ________. A.Gaining influence B.Responding to unfair trade practices C.Pursuing strategic trade policy D.Protecting jobs E.Preserving national security

C.Pursuing strategic trade policy

In 1980, the closing of U.S. carmakers' production facilities in the United States was creating a volatile anti-Japan sentiment among the population and the U.S. Congress. Fearing punitive legislation, the Japanese government and its carmakers decide to limit its automobile exports to the United States. Which of the following is this an example of? A.Compound tariff B.Specific tariff C.Voluntary export restraint (VER) D. Ad valorem tariff E. Tariff-quota

C.Voluntary export restraint (VER)

The difference between the comparative advantage theory and the factor proportions theory is that the factor proportions theory ________. A.believes that nations could increase their wealth by maintaining a trade surplus B.considers labor to be the only resource used in the production process C.states that a country specializes in producing and exporting goods using the factors of production that are most abundant and thus cheapestlong dash—not the goods in which it is most productive D.suggests that trade is a zero-sum game E. says that international trade is a positive-sum game.

C.states that a country specializes in producing and exporting goods using the factors of production that are most abundant and thus cheapest long dash—not the goods in which it is most productive

The main problem with mercantilism is that it views trade as a(n) ________. A.increase deficit B.threat to nation's wealth C.zero sum game D.limit to export E.positive sum game

C.zero sum game

________ refers to socially learned traits associated with, and expected of, men or women. A) Conformity B) Social mobility C) Individualism D) Gender

D) Gender

The GDP per capita of a country is higher than that of Thailand. If the GDP per capita of the country is adjusted for PPP, the country's revised GDP is lower than that of Thailand. Which of the following is most likely true about the country? A) There are fewer goods available for purchase in the country than in Thailand. B) The cost to buy everyday goods in the country is approximately the same as in Thailand. C) It costs less to buy everyday goods in the country than in Thailand. D) It costs more to buy everyday goods in the country than in Thailand.

D) It costs more to buy everyday goods in the country than in Thailand.

Which of the following statements is true of local content requirements? A) It is a strategy mainly used by developed nations. B) This strategy enforces companies to locate their manufacturing facilities in their home countries. C) Local content requirements hurt domestic producers through their effect on prices. D) It forces companies from other countries to employ local resources in their production processes.

D) It forces companies from other countries to employ local resources in their production processes.

A company is conducting a research on new markets by comparing countries in terms of their human development index (HDI) scores. The company wishes to expand into a market where individuals experience a very high level of total well-being. Which of the following countries would the company most likely choose? A) Russia B) Mexico C) China D) Japan

D) Japan

Bob is a journalist who intends to spend the next five months exploring Konesia. In order to be able to fit in with the locals, he studies their culture in detail. He familiarizes himself with their tastes and preferences, takes note of their taboos, and memorizes many of their sayings and phrases. Which of the following terms best describes his actions? A) material culture B) popular culture C) cultural imperialism D) cultural literacy

D) cultural literacy

Nations having the poorest infrastructures and lowest personal incomes are called ________. A) developed countries B) newly industrialized countries C) emerging markets D) developing countries

D) developing countries

Which of the following is an important factor in forming successful business ventures in China? A) following the strategies of western countries for establishing business relationships B) focusing on establishing tight formal contracts C) giving high importance to written contracts D) establishing a trusting relationship before proceeding with business

D) establishing a trusting relationship before proceeding with business

Democracies try to preserve peaceful coexistence among groups of people with diverse cultural, ethnic, and racial backgrounds. These rights are known as ________ rights. A) indirect B) central C) subcapital D) minority

D) minority

The relative ability of two countries' currencies to buy the same basket of goods in those two countries is called ________. A) gross national product B) gross domestic product C) purchasing power D) purchasing power parity

D) purchasing power parity

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs indicates ________. A) egalitarianism B) denationalization C) generalizability D) sustainability

D) sustainability

Small companies selling traditional products benefit from ________. A) the barriers to trade that restrict their products from crossing domestic boundaries B) increased investment by foreign competitors in domestic markets C) government policies that seek to regulate the flow of capital across national borders D) technology that lowers the costs and difficulties of global communication

D) technology that lowers the costs and difficulties of global communication

One of the major pillars upon which the practice of mercantilism rested was ________. A) economies of scale B) pricing mechanism C) excessive imports D) trade surpluses

D) trade surpluses

Which major region of the world's economy represents the highest intraregional exports? A.Caribbean region B.North American region C.West African region D.European region E.Asian region

D.European region

According to Adam Smith, a nation should concentrate on producing the goods in which it ________. A.can produce most efficiently B.can protect through government interventions to ensure foreign market accessibility C.can gain strategic advantage by increasing the pace of privatization D.has an absolute advantage in producing the product E.can produce and export goods that require resources that are abundant

D.has an absolute advantage in producing the product

Tariffs that are called specific tariffs are levied based on ________. A.the amount (measured in units or weight) of a good that can enter a country during a certain period of time B.a percentage of the stated price of an imported product C.the government of a country that a product is passing through D.a percentage of its stated price and a specific fee for each unit. E.a specific fee for each unit (measured by number, weight, etc.) of an imported product

E. a specific fee for each unit (measured by number, weight, etc.) of an imported product

The General Agreement on Trade in Services (GATS) created during the Uruguay Round identifies four different forms that international trade in services can take. Which of the following is NOT one of those forms? A.Consumption abroad B.Presence of natural resources C.Cross-border supply D.Commercial presence: E.Agriculture subsidy

E.Agriculture subsidy

Which of the following describes administrative delays? A.Restrictions on the convertibility of a currency into other currencies B.A complete ban on trade in one or more products with a particular country C.Regulatory controls or bureaucratic rules designed to impair the flow of imports into a country D.Restrictions on the amount (measured in units or weight) of a good that can enter or leave a country E.Compound tariffs levied on an imported product

E.Compound tariffs levied on an imported product

One of the most common instruments that government uses to promote trade with other nations is the establishment of a foreign trade zone. Which of the following is not an advantage of a free trade zone? A.Increase employment. B.Allow companies to conduct manufacturing operations free from taxes. C.Establish a facility inside a free trade zone to reduce costs and time. D.Merchandise is allowed to pass with lower customs duties. E.Increase government revenue by applying additional import tariff.

E.Increase government revenue by applying additional import tariff.

Which of the following has eliminated all tariffs and nontariff trade barriers on goods originating within North America? A.World Trade Organization B.World Bank C.Overseas Private Investment Corporation D.International Monetary Fund E.NAFTA

E.NAFTA

For which of the following political motives do governments intervene in trade in order to ban certain defense-related goods from export to other nations? A.Protect national identity B.Protect jobs C.Respond to unfair trade practice D.Protect its infant defense industries E.Preserve national security

E.Preserve national security

Which of the following statements BEST describes the new trade theory? A.The theory does not assume any role of government intervention. B.The theory states that, as specialization and output increase, companies can increase the unit costs of production. C.Gains made as a result of increasing economies of scale will increase the cost of production and thus the price to buyers, which will force the competition to increase their prices as well. D.The theory emphasizes productivity rather than a nation's resources. E.There are gains to be made from specialization and increasing economies of scale.

E.There are gains to be made from specialization and increasing economies of scale.

Export tariff is levied mostly by the government of a country that is ________. A.exporting to non-WTO member countries B.exporting to wealthy nations C.exporting agriculture products D.exporting highly advanced technological products E.exporting products that consist mostly of low-priced natural resources

E.exporting products that consist mostly of low-priced natural resources

Trade in services accounts for around 20 percent of total world trade. Although the importance of trade in services is growing for many nations, it tends to be relatively more important for the world's ___________ countries. A.newly industrialized B. emerging C.developing D.poorest E.richest

E.richest