Chapter 3 Quiz - Intro to Business

True or False: In international licensing, the licensor is the domestic firm that allows the licensee to use its trademark or brand.

True

True or False: The International Monetary Fund (IMF) was created to promote trade through financial cooperation by working to eliminate trade barriers.

True

True or False: 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

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

Exports

True of False: The exchange rate is the interest rate that foreign banks receive when borrowing money from the United States.

False

True or False: 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

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

The _____ is the total amount of money that flows in and out of a country.

balance of payments

The United States buys copper from Chile's Escondido copper mine. The copper is used to make wiring for the U.S. telecommunications industry and for many other purposes. For the U.S., the copper is an example of a(n):

import

Canadian logging companies sell timber in the United States. To the U.S., the timber is a(n)_____, and for Canadians, the timber is a(n) _____.

import; export

Imagine you are trying to gather the information needed to calculate the balance of payments for an Eastern European country. To do your calculations, you would need to have information on all of the following EXCEPT:

its corporate tax rates

A company that has a global vision...

recognizes and reacts to international business opportunities

In 2018, Country A exported $84.9 billion and imported products valued at $74.69 billion. The difference between the dollar value of its exports and imports represents a:

trade surplus

The _____ is defined as the difference in value of a country's exports and imports over a period of time.

Balance of Trade

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