Chapter Test 3
This Group helps maintain an orderly system of world exchange rates a) International Monetary Fund b) World Trade Organization c) World Bank d) European Union
a) International Monetary Fund
Which of the following tends to discourage international trade? a) an embargo b) a free-trade zone c) a free-trade agreement d) a common market
a) an embargo
Which of the following products is NOT imported to the United States in any great quantity? a) milk b) oil c) coffee d) silk
a) milk
Exists when a country can produce a good or service at a lower cost than other countries
absolute advantage
Which of the following situations represents an absolute advantage? a) Saudi Arabia in fresh fish production b) Honduras in banana production c) Canada in rice production d) Norway in orange and grapefruit production
b) Honduras in banana production
Which of the following is an example of a global strategy? a) Pizza Hut restaurants in Japan sell pizzas with squid toppings because squid is popular Japanese food. b) The formula for Coca-Cola is the same no matter where in the world it is sold. c) Advertising for women's underwear does not feature live models in many Muslim countries to avoid offending religious sensibilities. d) All of the above are global strategies.
b) The formula for Coca-Cola is the same no matter where in the world it is sold.
The amount a country owes to other countries is called a) national debt b) foreign debt c) trade deficit d) balance of payments
b) foreign debt
Which of the following would likely cause the value of the dollar to RISE? a) an increased U.S. trade deficit b) higher U.S. interest rates c) lower U.S. inflation d) Saudi Arabia doubles the price of the oil it sells the United States
c) lower U.S. inflation
Infrastructure refers to a country's a) educational system b) system of local government c) transportation, communication, and utility systems d) legal system
c) transportation, communication, and utility systems
Exits when a country specializes in the production of a good or service at which it is relatively more efficient
comparative advantage
An agreement between two or more companies to share a business project is called a) licensing b) franchising c) a proprietorship d) a joint venture
d) a joint venture
Danielle's company is expanding into Korea and has asked her to research the language, customs, and values of the Korean people. Which aspect of the international business environment is Danielle investigating? a) geography b) economic development c) political and legal concerns d) cultural influences
d) cultural influences
Completely prohibiting the import or export of a product
embargo
Items sold to other countries
exports
Items bought from other countries
imports
The cost of using someone else's money
interest rate
The three key effects on a country's level of economic development are _______ __________, technology, and agricultural dependency.
literacy level
A ___________ company is an organization that does business in several countries.
multinational
The difference between the amount of money that comes into a country and the amount that goes out of it is called the balance of___________
payment
The three main factors that affect currency exchange rate among countries are the country's balance of payments, economic conditions, and _________ __________
political stability
A limit on the quantity of a product that may be imported or exported
quota
A tax that a government places on certain imported products
tariff
The difference between a country's total exports and total imports is called balance of _________
trade
Occurs when a country buys more than it sells
trade deficit
Occurs when a country sells more than it buys
trade surplus