ITB Ch4

Which of the following would result from devaluation of the U.S. dollar? Foreign goods would be less expensive for American consumers. The cost of foreign vacations for U.S. citizens would be reduced. U.S. goods would sell for less abroad. Foreign firms would have to pay more to purchase U.S. assets.

U.S. goods would sell for less abroad.

A less-developed country wants to build new port facilities, which will allow it to increase agricultural exports. Financing for this project could come from the ________. World Bank United Nations International Monetary Fund World Trade Organization

World Bank

Decisions made by the ___________ regarding trade disputes are binding on the parties involved. International Monetary Fund (IMF) World Trade Organization (WTO) General Agreement on Tariffs and Trade (GATT) World Bank

World Trade Organization (WTO)

A major concern of labor unions regarding trade agreements is: a decrease in U.S. imports a decrease in U.S. exports loss of U.S. jobs higher prices on imported goods

a decrease in U.S. exports

An absolute advantage occurs when a country can maintain ________. a monopoly by levying high taxes on imports a monopoly by being the lowest-cost producer of a good or service its advantage by producing a good or service more efficiently a monopoly by outlawing foreign imports

a monopoly by being the lowest-cost producer of a good or service

A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese. This is an example of ________. a protective tariff an exchange control dumping an import quota

a protective tariff

Film distributors sometimes change movie titles when marketing overseas due to language or slang barriers. Studios usually allow modification of its product as part of a ________ strategy. uniform multinational global multidomestic business

multidomestic business

A Japanese insurance company purchases U.S. government securities. From the perspective of the United States, the balance of trade with Japan will ________ and the balance of payments with Japan will ________. not change; improve improve; get worse not change; get worse improve; improve

not change; improve

All of the following constitute a country's infrastructure EXCEPT ________. political climate communication transportation energy facilities

political climate

Even though the United States manufactures textiles, China is able to produce them more efficiently. Thus, China has a ________________ in manufacturing textiles. trade restriction comparative advantage tariff Quota

comparative advantage

A U.S. agricultural producer sells wheat to a small country in Africa. The country pays the U.S. firm in seafood. This is an example of ________. foreign licensing international production countertrade direct exporting

countertrade

An understanding of religious holidays is essential in order to overcome ________ international trade barriers. physical legal cultural political

cultural

Goto, Inc. is trying to establish a supplier relationship with a parts manufacturer in a small Asian country. Filipe, the purchasing manager, is attempting to get to know the general manager and staff of the company to help finalize the agreement. Filipe is attempting to overcome what type of barrier? cultural barrier physical barrier exchange controls tariff restriction

cultural barrier

According to the U.S. Census Bureau, compared to 35 years ago, the global birth rate is holding steady. increasing significantly. increasing slightly. decreasing significantly.

decreasing significantly.

A country has a good chance of selling more of its goods abroad if it ________. increases the value of its currency more tourists decide to travel abroad sets high tariffs on imported goods devalues its currency

devalues its currency

Berry Corp. sells microprocessors to an electronic equipment manufacturer in this country who then sells equipment containing the microprocessors to Japan. Berry Corp. is engaging in ________. countertrade international production indirect exporting foreign licensing

indirect exporting

Assume a nation has a comparative advantage in the production of clothing. If the value of this country's currency rises, ________. its comparative advantage will stay the same its comparative advantage will increase an absolute advantage will be created its comparative advantage will decrease

its comparative advantage will decrease

Patents, trademarks, and intellectual property are important concerns in the ___________ environment. political cultural legal economic

legal

All of the following are part of the European community's plan to eliminate all barriers to free trade among its members with the exception of ________. legal systems being standardized custom checks being eliminated trade duties and value-added taxes being standardized business regulation and requirements being standardized

legal systems being standardized

A country with a balance of payments surplus means ________. monetary outflow exceeds monetary inflow imports exceed exports monetary inflow exceeds monetary outflow exports exceed imports

monetary inflow exceeds monetary outflow

During the past decade, which of the following countries has experienced the greatest annual rate of GDP growth? United States Japan China Canada

China

In recent years, the value of the dollar relative to the euro has declined. What does this mean for European businesses exporting to the United States? European countries are more likely to avoid trade with the United States. European countries are more likely to import U.S. goods or services. The U.S. trade deficit will most likely become greater. The United States is more likely to increase imports from European countries.

European countries are more likely to import U.S. goods or services.

Which form of international involvement typically has the least amount of risk? Subcontracting Direct investment Franchising Exporting or importing

Exporting or importing

_____ allows another firm to produce and sell a company's product abroad. International franchise Subcontracting Foreign license agreement Joint venture

Foreign license agreement

Which of the following is important for business people to know about Japanese culture? Upon receiving a business card, clients should quickly put it away without examining it. Casual wear is acceptable in the work place. In the Japanese culture, little eye contact and periods of silence is acceptable. It is acceptable to offer unwrapped gifts as a sign of friendship.

In the Japanese culture, little eye contact and periods of silence is acceptable.

The ________ promotes trade by providing financial assistance and waiving debt payments. European Union International Monetary Fund United Nations World Bank

International Monetary Fund

The ________ was created to promote trade through financial cooperation and eliminate barriers by making short-term loans to member nations. Global Assistance Fund International Bank International Monetary Fund World Bank

International Monetary Fund

Trade restrictions create what kind of barrier to international trade? Social Economic Cultural Legal and political

Legal and political

Which is the most commonly spoken language in the world? Mandarin Chinese English Hindustani Spanish

Mandarin Chinese

_________ are a common trade restriction imposed by the government on agricultural products. Embargos Foreign trade zone Exchange controls devaluation Quotas

Quotas

Why does Spain have an approximate absolute advantage in growing saffron? Spain has some of the lowest labor rates in the world so the time-consuming harvesting process is less expensive. Saffron thrives in Spain's climate and soil but does not do as well elsewhere. Treaties limit which country can produce saffron. The spice is relatively inexpensive so other countries are not interested in growing it.

Saffron thrives in Spain's climate and soil but does not do as well elsewhere.

All of the following are included in the top five nations the United States trades with EXCEPT ________. China Mexico Canada Spain

Spain

Last year, the United States imported less from Switzerland than it exported to Switzerland. Which of the following statements is true? The United States has a trade deficit with Switzerland. The United States has a trade surplus with Switzerland. The United States has a negative balance of trade with Switzerland. The United States has a balance of payments deficit with Switzerland.

The United States has a trade surplus with Switzerland.

Which organization was formed to monitor GATT agreements? The International Monetary Fund The World Trade Organization The World Bank The United Nations

The World Trade Organization

Which statement is true about less developed countries? The size of their populations is enough to create a market for goods and services. They have little access to imports. Their share of the world population will increase in the coming years. They do not participate in the global marketplace.

Their share of the world population will increase in the coming years.

By allowing a company to purchase another existing firm in the host country, a(n) ________ permits a largely domestic business to gain an international presence very quickly. joint venture foreign licensing agreement countertrade acquisition

acquisition

Specialization of production among nations: allows each nation to focus on producing what it does best. means consumers have access to the most efficient producers of goods and services they want to buy. is the basis of international trade. all of these answers are correct. is a major means of raising the standard of living for people throughout the world.

all of these answers are correct.

Dumping _________ domestic consumers and _________ domestic producers. benefits, harms benefits, benefits harms, harms harms, benefits

benefits, harms

Amit, CEO of Charter Chemical, has recognized the financial opportunities in China. Amit has hired a foreign freight forwarder to coordinate selling Charter Chemical's products outside the United States. Charter Chemical is now involved in ________. international production direct exporting overseas marketing foreign licensing

direct exporting

Many developing nations have lower per capita incomes than highly developed countries. This fact ________. does not mean there is little opportunity for sales. Their sheer numbers may still represent significant and growing markets means that they are only likely to purchase low-tech merchandise indicates that they represent an insignificant market for most products means that the developing nations are unlikely to experience much economic growth

does not mean there is little opportunity for sales. Their sheer numbers may still represent significant and growing markets

If a foreign company offers steel in the United States below the company's cost of production, the company might be accused of ________. protective tariffs a managed trade agreement dumping an import quota

dumping

An American company that makes plastic garden furniture wants to market its products in a foreign country that has a high tariff barrier against imported plastic goods. One way the company can get around this problem is to ________. violate the Foreign Corrupt Practices Act submit a complaint to the U.S. Department of Commerce enter into a licensing agreement with companies within the foreign country to produce the furniture there hire an export management team

enter into a licensing agreement with companies within the foreign country to produce the furniture there

A Canadian software company that specializes in developing computer games enters into an agreement with a Japanese software company. Under this agreement, the Japanese firm has the right to manufacture and sell the Canadian firm's games in country-Japan. This agreement is an example of ________. foreign licensing international production direct exporting countertrade

foreign licensing

Ford Motor Company is merging its individual operation into one so that it can use a standardized product and marketing strategy worldwide. This strategy can best be described as a(n) ________. multidomestic strategy orderly marketing strategy international marketing strategy global strategy

global strategy

A foreign-made household appliance is popular and is highly competitive with the same product manufactured domestically. To give the domestic industry a better chance to operate profitably, the government restricts the number of these appliances that can be imported by applying a(n) ________. import quota protective tariff revenue tariff embargo

import quota

Tyra spent a two-week vacation in Italy and purchased more than $1,000 worth of Venetian glass. Upon returning to the United States, she was required to pay a ________ on the items. customs tax exchange rate tax protective tariff revenue tariff

revenue tariff

The United States has a trade surplus with which of the following items? technology products services oil textiles

services

The purpose of __________ is to make imports more expensive for domestic buyers. exchange controls embargos tariffs dumping

tariffs

A balance of payments deficit occurs when ________. the net outflow of money from a country exceeds the net inflow of money from abroad the net inflow of money from abroad exceeds the net outflows of money to other countries exports exceed imports imports exceed exports

the net outflow of money from a country exceeds the net inflow of money from abroad

The country Artesia exported products totaling $86 billion last year. During the year, Artesia imported products valued at $43 billion. Artesia has a(n) ________. trade deficit of $43 billion exchange rate of 2 to 1 unfavorable balance of payments trade surplus of $43 billion

trade surplus of $43 billion