Chapter 3 Review (True or False)
A countertrade in international terms pertains to the sale of retail goods that are usually sold "over the counter." T OR F?
False
A well-designed product transcends cultural barriers. It does not need to be changed to suit different countries or cultures. T OR F?
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. T OR F?
False
Armenia had a favorable balance of trade in 2018 when it exported $800 million in goods and services and imported $1.5 billion. T OR F?
False
Expropriation is a political risk in which a country seizes the assets of a foreign firm and does not compensate the firm. T OR F?
False
Having a global vision simply means having a willingness to sell outside one's national borders if, and when, the opportunity arises. T OR F?
False
If Syria gives Lebanon a tariff advantage over other countries, Lebanon has been given a biased tariff. T OR F?
False
Telecommunications equipment manufacturers in the United States sell their products to people who live in Canada. To Canadians, the telecommunications equipment is an export. T OR F?
False
The Uruguay Round of trade negotiation is an agreement that only affects trade among Latin American countries. T OR F?
False
The exchange rate is the interest rate that foreign banks receive when borrowing money from the United States. T OR F?
False
When a domestic company allows a foreign firm to use its brand in exchange for royalty fees, it is called a joint venue. T OR F?
False
In international licensing, the licensor is the domestic firm that allows the licensee to use its trademark or brand. T OR F?
True
International trade-dependent jobs have grown at a rate three times the growth of U.S.-dependent jobs. T OR F?
True
Limitations on the quantity of certain types of goods that can be imported over a period of time are called import quotas. T OR F?
True
Mines in Colombia produce emeralds and sell them to jewelers in the United States. To Colombia miners, emeralds are an export. T OR F?
True
One of the advantages multinational corporations have over other companies is their ability to sidestep regulatory difficulties. T OR F?
True
Some multinational corporations are so large that they resemble small countries. T OR F?
True
The International Monetary Fund (IMF) was created to promote trade through financial cooperation by working to eliminate trade barriers. T OR F?
True
The difference in value between a country's imports and exports is called its balance of trade. T OR F?
True
The need for businesses to expand their markets is one of the most fundamental reasons for the growth in world trade.
True
The opposite of free trade is protectionism. T OR F?
True
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. T OR F?
True
The tax that the United States imposes on imported carbon steel products is called a tariff. T OR F?
True
When Coca-Cola sends cases of Coke to France and receives sparkling water as payment, a countertrade has taken place. T OR F?
True
When a country sells its products in a foreign country at a cheaper price than usual, and sometimes even at a loss, it is dumping products. T OR F?
True
