(Concept Checks) Chapter 3: Global Business

Which U.S. government export assistance program facilitates advocacy to assist U.S. firms competing for major projects and procurements worldwide? a. Advocacy Center b. STAT-USA/Internet c. Small Business Administration d. Federal Trade Commission e. International Trade Administration

a. Advocacy Center

Which of the following is a reason for trade restrictions? a. Cutbacks in jobs b. Restriction of consumers' choices c. Protection for new or weak industries d. Higher prices for consumers

c. Protection for new or weak industries

A firm that operates on a worldwide scale without ties to any specific nation or region is known as a: a. totally owned facilities. b. strategic alliance. c. multinational enterprise. d. joint venture. e. trading company.

c. multinational enterprise.

A contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation is known as: a. strategic alliance. b. licensing. c. countertrade. d. joint venture. e. export-import agent.

b. licensing.

Who supports multilateral development banks (MDB)? a. Industrialized nations b. Developing nations c. The governments of the countries being assisted d. Only the United States e. Industrialized nations other than the United States

a. Industrialized nations

What is the famous principle of the General Agreement on Tariffs and Trade (GATT), which means that each member nation is to be treated equally by all contracting nations? a. Most-favored-nation status (MFN) b. Negotiation rounds c. Brexit d. The Trans-Pacific Partnership (TPP) e. Economic community

a. Most-favored-nation status (MFN)

Which of the following agreements, when ratified, created a free trade area among the United States, Mexico, and Canada? a. The North American Free Trade Agreement (NAFTA) b. The Commonwealth of Independent States c. The North American Free Three d. General Agreement on Tariffs and Trade (GATT) e. The Central American Free Trade Agreement (CAFTA)

a. The North American Free Trade Agreement (NAFTA)

The United States is efficient at producing software and engineering services, but cannot produce clothes and electronics as efficiently as other nations. As such, the United States sells software and engineering services to other countries and buys clothes and electronics. This is an example of: a. comparative advantage. b. absolute advantage. c. economic profit. d. monopolistic advantage. e. supply and demand.

a. comparative advantage.

Currency devaluation ___________ the cost of foreign goods and _______ the cost of domestic goods to foreign firms. a. increases; decreases b. does not change; increases c. does not change; decreases d. decreases; does not change e. decreases; increases

a. increases; decreases

A bill of lading is defined as: a. providing a link between buyers and sellers in different countries that allows both to avoid financial restrictions. b. a document issued by a transport carrier to an exporter to prove that merchandise has been shipped. c. a document that is issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary. d. a document that is issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank. e. providing complete control over operations when exporting through an export-import agent.

b. a document issued by a transport carrier to an exporter to prove that merchandise has been shipped.

Brazil has excellent resources and expertise to farm and produce coffee beans, whereas the United States is ill-suited for the production of coffee. Brazil should: a. abandon coffee and produce a product Brazil's residents strongly demand. b. continue to produce coffee and trade it for U.S. products Brazil needs and cannot produce. c. slow production of coffee and allocate Brazilian resources elsewhere. d. stop trading coffee with the U.S. and only trade coffee with its neighboring countries. e. increase coffee advertising to create a greater demand for coffee in Brazil.

b. continue to produce coffee and trade it for U.S. products Brazil needs and cannot produce.

The selling of products in a foreign country at lower prices than those charged in the producing country is called: a. foreign-exchange control. b. dumping. c. an embargo. d. an import quota. e. an import duty

b. dumping.

Sub-Saharan Africa is home to __________ of the top-ten fastest-growing economies in the world. a. ten b. seven c. three d. five e. two

b. seven

Which organization or U.S. government export program publishes guides that offer assistance and exporting information to small and medium-sized companies? a. STAT-USA/Internet b. International Trade Administration c. Small Business Administration d. Advocacy Center e. Federal Trade Commission

c. Small Business Administration

According to the International Monetary Fund (IMF), what are the world economic growth projections? a. The IMF predicts little to no global growth in either advanced or developing countries. b. The IMF predicts a rapid global growth in developing countries, but no global growth in advanced countries. c. The IMF predicts a gradual global growth in both advanced and developing countries. d. The IMF predicts negative growth in both advanced and developing countries. e. The IMF predicts gradual global growth in advanced countries, but negative growth in developing countries.

c. The IMF predicts a gradual global growth in both advanced and developing countries.

The organization established by the Uruguay Round of the GATT, whose purpose is to mediate trade disputes among nations is called: a. the Commonwealth of Independent States. b. the European Union. c. World Trade Organization (WTO). d. the North American Free Trade Agreement (NAFTA). e. trade protectionism.

c. World Trade Organization (WTO).

A country may attempt to protect its own domestic industries by imposing a(n) _____, a type of tax, on imported products. a. foreign-exchange control b. currency devaluation c. import duty (tariff) d. embargo e. import quota

c. import duty (tariff)

Which countries are the United States' best trading partners for U.S. exports? a. China and the United Kingdom b. Japan and India c. Canada and Brazil d. Canada and Mexico e. Canada and China

d. Canada and Mexico

Which of the following U.S. government export assistance programs offers assistance and information to exporters through its domestic and overseas commercial officers? a. Federal Trade Commission b. Small Business Administration c. STAT-USA/Internet d. International Trade Administration e. Advocacy Center

d. International Trade Administration

What is the main function of the Export-Import Bank of the United States? a. To foster the economic and social development of its African members b. To promote economic and social progress in Asian and Pacific regions c. To make short-term loans to developing countries experiencing balance-of-payment deficits d. To assist in financing the exports of American firms e. To provide loans to developing countries to help them grow

d. To assist in financing the exports of American firms

Which of the following banks specifically makes short-term loans to developing countries experiencing balance-of-payment deficits? a. The African Development Bank (AFDB) b. The Asian Development Bank (ADB) c. The Inter-American Development Bank (IDB) d. The European Bank for Reconstruction and Development e. The International Monetary Fund (IMF)

e. The International Monetary Fund (IMF)

A country with a trade surplus generally has a favorable balance of payments, which means: a. a continual surplus may indicate that the country encourages imports by not imposing trade restrictions. b. other nations will probably lose confidence in the country's economy. c. the country may experience declining production and higher unemployment. d. more money flows out of the country than into it. e. the country is receiving more money from trade with foreign countries than it is paying out.

e. the country is receiving more money from trade with foreign countries than it is paying out.