Chapter 3

Which countries are the United States' best trading partners for U.S. exports?

Canada and Mexico

The US has the largest economy. Which nation has the second largest economy and represents the largest annual bilateral trade relationship with the US?

China

The ___________, also known as the Common Market, is now an economic force to be recognized by even the most advanced economies such as of the United States and Japan

European Union (EU)

According to the International Monetary Fund (IMF), ________________ exports are growing annually. This region is home to 11 Free Trade Area countries

Latin American

The US is a party to many trade agreements and international trade organizations. Which of the following trade organizations does not have the US as a member?

MFN

According to the International Monetary Fund (IMF), what are the world economic growth projections?

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

While international trade is as logical as interstate trade, some nations restrict imports of certain goods for a variety of reasons. The United States recently restricted the import of fresh tomatoes from Mexico. Why did the United States restrict the imports of tomatoes?

The Mexican fresh tomatoes were undercutting price levels of domestic fresh tomatoes

Which of the following agreements, when ratified, created a free trade area among the United States, Mexico, and Canada?

The North American Free Trade Agreement (NAFTA)

Which government agency could possibly provide a loan of up to $5 million to a small US business that needed a short-term loan to start an export business?

US small business administration

The organization established by the Uruguay Round of the GATT, whose purpose is to mediate trade disputes among nations is called:

World Trade Organization (WTO)

Temporary trade restrictions may be used to give a new business __________

a chance to grow and become self-sufficient

A bill of lading is defined as:

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

Which U.S. government export assistance program facilitates advocacy to assist U.S. firms competing for major projects and procurements worldwide?

advocacy center

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:

comparative advantage

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:

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

There are several methods for entering international trade. Which of the following is not a method for entering international trade?

creation of a business that is organized outside of any nation and operates on a multinational level "at home" in most countries of the world

There are many reasons for imposing trade restrictions, however ______________ is not one of them

decreasing job availability within a nation

Nations may impose barriers to trade. Which of the following is not a barrier to trade?

dumping

The selling of products in a foreign country at lower prices than those charged in the producing country is called:

dumping

Licensing is perhaps the easiest method of entering into international trade. Another method of entering international trade, which can be relatively low risk, is ________ which opens several levels of involvement to company

exporting

Taobao, an Alibaba company, is a Chinese online shopping website similar to Amazon or eBay. When Alibaba does public, Taobao shop owners will be able to sell their goods to customers in the US and other countries. Taobao shop owners will be _______ their goods to other countries

exporting

A country may attempt to protect its own domestic industries by imposing a(n) _______, a type of tax, on imported products

import duty (tariff)

Since World War II international trade has _________________

increased almost steadily

Currency devaluation ______ the cost of foreign goods and ______ the cost of domestic goods to foreign firms

increases; decreases

Who supports multilateral development banks (MDB)?

industrialized nations

The _____________ a federal agency, helps U.S. firms develop export promotion programs and gives assistance in competing in foreign markets by coordinating trade missions in foreign countries

international trade administration

What is the name of one of the US federal agencies created to assist US firms in developing export-promotion programs?

international trade administration

Which of the following U.S. government export assistance programs offers assistance and information to exporters through its domestic and overseas commercial officers?

international trade administration

As trade has expanded internationally, many _________ have also become international in scope and have established branches in major cities around the world. This gives them the ability to provide their financial services where and when they are needed

large banks

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:

licensing

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?

most-favored-nation status (MFN)

A firm that operates on a worldwide scale without ties to any specific nation or region is known as a:

multinational enterprise

Which of the following is a reason for trade restriction?

protection for new or weak industries

Sub-Saharan Africa is home to __________ of the top-ten fastest-growing economies in the world

seven

Which organization or U.S. government export program publishes guides that offer assistance and exporting information to small and medium-sized companies?

small business administration

Products sold on Alibaba's website to foreign countries may be subject to taxes, or _______

tariffs

Which of the following banks specifically makes short-term loans to developing countries experiencing balance-of-payment deficits?

the International Monetary Fund (IMF)

The economics of _________ and _______ are the most dynamic, efficient, and most integrated in the world

the United States; Canada

A country with a trade surplus generally has a favorable balance of payments, which means:

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

The exporting trade in the US has had a significant impact on the US economy. In 2016, exports accounted for 11 million jobs-an increase of 3.3 million jobs since the 2009 recession. Which of the following is true about the impact of US exports on the global economy?

the increase in trade volume over the past 65 years has been one of the most important factors in the rise of the living standards around the world

What is the main function of the Export-Import Bank of the United States?

to assist in financing the exports of American firms

The primary function of international economic organization such as the World Trade Organization (WTO) is ________________

to remove barriers to trade on a worldwide basis