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