BUS100 Chapter 4
What organization was founded in Pacific Asia in 1967 for economic, political, social, and cultural cooperation? A) SEATO B) ASEAN C) CENTO D) OAS E) WTO
B) ASEAN
True or False An import is a product made or grown abroad but sold domestically.
True
True or False Critics of protectionism charge that it drives up prices by reducing competition.
True
True or False Even free market economies often establish some system of quotas and/or tariffs.
True
True or False The World Trade Organization (WTO) was created to encourage international trade.
True
Which of the following countries is the world's third largest economy, behind that of the United States and European Union? A) China B) India C) Brazil D) Japan E) Russia
A) China
The U.S. government forbids the importation of cigars from Cuba. What is this practice called? A) embargo B) tariff C) subsidy D) business practice law E) local content law
A) embargo
Which of the following buys products in foreign markets and then sells them for resale in its home country? A) importer B) exporter C) multinational firm D) international firm E) direct foreign investor
A) importer
Which of the following goals is a primary purpose of tariffs on imports? A) maintain domestic competitiveness B) decrease exports C) increase imports D) subsidize domestic industry E) promote free trade
A) maintain domestic competitiveness
Which organization created the classification of countries based on per capita income? A) the World Bank B) the World Trade Organization C) the International Monetary Fund D) the European Union E) the North American Free Trade Agreement
A) the World Bank
True or False NAFTA regulates trade between the United States, Europe, and Japan.
False
True or False A subsidy is a tax designed to help companies who import products.
False
True or False Globalization refers to the process by which countries around the world are becoming more self-sufficient.
False
True or False If the United States exports more to the Netherlands than it imports from the Netherlands, the United States has a trade deficit with the Netherlands.
False
True or False The primary purpose of the World Trade Organization is to impose tariffs on imported products.
False
True or False Transportation costs have relatively little impact on a domestic firm's decision to go international, compared to other possible factors.
False
Which of the following BEST describes a positive trade balance? A) the economic condition in which a country's exports exceed its imports B) the economic condition in which a country's imports exceed its exports C) the economic condition in which a country's inflow of money exceeds its outflow D) the economic condition in which a country's outflow of money exceeds its inflow E) the economic condition in which a country's natural resources exceed its human resources
A) the economic condition in which a country's exports exceed its imports
In some South American countries, it is sometimes legal to bribe other businesses and government officials, while this practice is illegal in the United States. Which of the following refers to this type of policy? A) protectionism B) business practice laws C) free trade agreements D) fair trade agreements E) local content laws
B) business practice laws
Which of the following refers to associations of producers that control supply and prices? A) independent agencies B) cartels C) trade alliances D) multinational firms E) trade monopolies
B) cartels
Which of the following denotes a government order forbidding exportation and/or importation of a particular product from a particular country? A) tariff B) embargo C) subsidy D) local content law E) business practice law
B) embargo
Which of the following organizations is a firm that makes products in one country and then distributes and sells them in others? A) importer B) exporter C) multinational firm D) international firm E) direct foreign investor
B) exporter
What are products that are created domestically and transported for sale abroad? A) dumped goods B) exports C) imports D) buy backs E) domestic goods
B) exports
Which of the following statements BEST describes the effects of subsidies? A) A subsidy essentially lowers the prices of foreign goods rather than raising the prices of domestic goods. B) A subsidy essentially raises the prices of domestic goods rather than lowering the prices of foreign goods. C) A subsidy essentially lowers the prices of domestic goods rather than raising the prices of foreign goods. D) A subsidy essentially raises the prices of foreign goods while also raising the prices of domestic goods. E) A subsidy essentially lowers the prices of foreign goods while also lowering the prices of domestic goods.
C) A subsidy essentially lowers the prices of domestic goods rather than raising the prices of foreign goods.
Which of the following treaties sought to eliminate trade barriers such as tariffs and quotas? A) United Nations Development Assistant Plan B) Fair Labor Standards Act C) General Agreement on Tariffs and Trade D) General Agreement on Trade in Services E) European Union Stability and Growth Pact
C) General Agreement on Tariffs and Trade
Which of the following is the name for the economic value of all of the products that a country exports minus the economic value of its imports? A) balance of foreign competition B) balance of domestic competition C) balance of trade D) balance of payments E) balance of supply and demand
C) balance of trade
Which of the following refers to the practice of selling a product abroad for less than the cost of production? A) exporting B) importing C) dumping D) safeguarding E) offshoring
C) dumping
What are products that are created abroad and then transported and sold domestically? A) dumped goods B) exports C) imports D) buy backs E) domestic goods
C) imports
Under which of the following treaties are Canada, the United States, and Mexico gradually eliminating tariffs and all other trade barriers? A) the EURO Agreement B) the Pan-American Agreement C) the North American Free Trade Agreement D) the General Agreement on Tariffs and Trade E) the G-3 Free Trade Agreement
C) the North American Free Trade Agreement
Which of the following refers to the situation when a country's imports exceed its exports? A) balance of payments B) balance of trade C) trade deficit D) trade surplus E) trade advantage
C) trade deficit
Which of the following denotes the practice of protecting domestic business at the expense of free market competition? A) fair trade B) balanced trade C) free trade D) market liberalism E) protectionism
E) protectionism
U.S. imports of Canadian softwood timber are limited to 14.7 billion board feet per year. What is this practice called? A) tariff B) embargo C) subsidy D) dumping E) quota
E) quota
Which of the following is a government payment to help a domestic business compete with foreign firms? A) revenue tariff B) protectionist tariff C) import buy-back D) export rebate E) subsidy
E) subsidy
True or False International firms conduct a good deal of their business abroad and may even maintain overseas manufacturing facilities.
True
True or False The United States has large trade deficits with Japan, China, and Mexico; this means that the United States has imported more from them than what they have purchased from us.
True