IBUS 311 CH 6-10
B. Monetary union
European Union nations signed the Treaty of Maastricht in 1992 to accomplish political union and which of the following? A. Trade union B. Monetary union This is the correct answer. C. Resource union D. Economic union E. Religious union
A. Cross-border remittance of funds
Exchange rates can influence all of the following for a business EXCEPT ________. A. Cross-border remittance of funds This is the correct answer. B. Market decisions C. Financial resources D. Translated overseas profits E. Production decisions
E. bilateral
The U.S. and South Korea sign a trade agreement meant to lower tariffs and increase free trade between the two countries. This illustrates _________ integration. A. environmental B. global C. regional D. dynamic E. bilateral This is the correct answer
C. Debt, demographic decline, and lower growth
The EU is most likely to face which of the following challenges within the next few years? A. Debt, demographic upgrade, and lower growth B. Debt, demographic decline, and higher growth C. Debt, demographic decline, and lower growth Your answer is correct. D. Debt, demographic upgrade, and higher growth
E. substitution
A Chinese laborer who works on a Russian farm is an example of ________. A. foreign investment B. complementarity C. factor endowments D. an ethnic network E. substitution This is the correct answer
B trade deficit
A country that imports more than it exports is said to have a(n) _________. A. favorable balance of trade B. trade deficit This is the correct answer. C. natural advantage D. trade surplus E. absolute advantage
B. a floating exchange rate system
A system in which market forces determine the value of a currency is called _______. A. a market forces system B. a floating exchange rate system Your answer is correct. C. the Bretton Woods system D. an international monetary system
E. NAFTA
All of the following EXCEPT ________ are considered major exchanges that deal in foreign currency. A. NASDAQ OMX B. CME Group C. NYSE Liffe D. OTC Market E. NAFTA This is the Correct answer
C. credit swaps
All of the following are considered global over-the-counter market (OTC) foreign-exchange instruments EXCEPT ________. A. currency swaps B. spot transactions C. credit swaps This is the correct answer. D. outright forward transactions E. FX swaps
E. Russian ruble
All of the following are considered "hard currencies" EXCEPT ________. A. U.S. dollar B. British pound C. Euro D. Japanese yen E. Russian ruble Your answer is correct.
D. Use of fundamental predictions of outside forecasters
All of the following can be considered a bias that can skew forecasts EXCEPT ________. A. Insufficient adjustment for subjective matter B. The inability to learn from past mistakes C. Overconfidence in ability to forecast currencies accurately D. Use of fundamental predictions of outside forecasters Your answer is correct. E. Overreaction to unexpected news events
D Australia
Based on the factor proportion theory, which of the following countries is most likely to grow wheat? A. The Netherlands B. Hong Kong C. Belgium D. Australia This is the correct answer. E. The Bahamas
B. real estate
Foreign exchange instruments include all of the following EXCEPT ________. A. bank deposits B. real estate Your answer is correct. C. cash D. credit cards E. traveler's checks
C. The Euro decreased in value relative to the Dollar
Last year 1 Euro could be exchanged for $1.25. This year the exchange rate is 1 Euro = $1.20. Which of the following explains what happened? A. The Dollar decreased in value relative to the Euro. B. The Dollar is value relative to all currencies. C. The Euro decreased in value relative to the Dollar. Your answer is correct. D. The Euro increased in value relative to the Dollar.
E. Demand
Marketing managers watch exchange rates because they can affect which of the following for a company's products? A. Depreciation B. Decision C. Development D. Design E. Demand This is the correct answer.
D. Foreign exchange
Money denominated in the currency of another nation or group of nations is known as which of the following? A. Spot rates B. Outright forward transactions C. Over-the-counter market exchange D. Foreign exchange This is the correct answer. E. Domestic exchange
A. extend their spheres of influence
Providing aid and credits to, and encouraging imports from, countries based on a political alliance illustrates how governments use trade to ____________. A. extend their spheres of influence This is the correct answer .B. preserve their national culture C. prevent dumping D. maintain essential industries E. enforce non-tariff barriers
D. commodities
Raw materials that are traded, such as copper, iron, tobacco, and coffee, are examples of ____________. A. quotas B. trading blocs C. dynamic effects D. commodities This is the correct answer. E. common markets
E Specialization and acquired advantages
Spending on research and development and the perceived advantage of a product provides a country with which of the following? A. Economic agreements B. Political relationships C. Cultural similarity D. Distance limitations E. Specialization and acquired advantages This is the correct answer
A. Constituent health
The World Trade Organization took on the GATT's fundamental principles. It then expanded to include trade in all EXCEPT which of the following areas? A. Constituent health This is the correct answer. B. Intellectual property C. Plant health D. Services E. Investment
D. Spread
The difference between the bid and offer rates in the spot market is known as the ________ and represents the dealer's profit. A. Offer B. Option C. FX swap rate D. Spread This is the correct answer. E. Option
D. banks and financial companies
The global financial system is comprised of ______. A. currency and financial assets B. entrepreneurs and CEOs C. affiliations and funds D. banks and financial companies This is answer is correct
D. Direct quote
The number of dollars per unit of foreign currency is known as which of the following? A. Offer B. Indirect quote C. Spread D. Direct quote This is the correct answer. E. Option
A. infant industry
The protectionism theory that says a government should protect emerging industry from foreign competition is known as the _____________ argument. A. infant industry This is the correct answer. B. industrialization C. diversification D. terms of trade E. underlying assumptions
C. free trade agreement
The type of agreement whose goal is to abolish all tariffs between members is known as a ____________. A. free economic agreement B. customs union C. free trade agreement This is the correct answer. D. common market E. most-favored-nation clause
B. European Union
The _________ is the largest and most comprehensive regional economic group in the world. A. Southern Common Market B. European Union This is the correct answer. C. North American Free Trade Agreement D. Caribbean Community E. Central American Free Trade Agreement
D. focus on growing market share in North America
To continue to experience significant global growth, RIM will most likely need to do all of the following except ____________. A. continue to provide secure networks despite any government concerns B. focus on growing market share in Asia and the Middle East C. focus on growing market share in Europe D. focus on growing market share in North America This is the correct answer
C. Promotion of acceptable practices abroad
Trade issues between RIM and countries in the Middle East related to data-encryption technologies are an example of which of the following types of governmental trade interventions? A. Price controls B. Balance-of-trade adjustments C. Promotion of acceptable practices abroad Your answer is correct. D. Development of an industrial base
D. Stakeholders
____________ are often both the most vocal about and the most affected by trade regulations. A. Infant industries B. Non-governmental organizations (NGOs) C. Immigrants D. Stakeholders Your answer is correct. E. Not-for-profit services
A. 3 percent
What percentage of the world's population has migrated to another country since the late 19th century? A. 3 percent This is the correct answer. B. 27 percent C. 73 percent D. 40 percent E. 1 percent
D. Diversifying the product line
When companies face possible losses because of import competition, which of the following is LEAST likely to help? A. Adopting internal innovations B. Moving operations to another country C. Trying to get government protection D. Diversifying the product line Your answer is correct. E. Concentrating on market niches
A. The U.S. dollar
Which currency is used in four of the top seven most frequently traded currency pairs? A. The U.S. dollar Your answer is correct. B. The peso C. The pound sterling D. The euro E. The yen
A. United Nations
Which group was established following World War II to promote international peace and security and now also deals with economic development, antiterrorism, and humanitarian movements? A. United Nations This is the correct answer. B. European Union C. NAFTA D. Trans-Pacific Partnership E. Mercosur
B. An alliance of two or more countries that agree to eliminate tariffs
Which of the following best defines the term "regional economic bloc"? A. An alliance of two or more countries that agree to slowly increase tariffs B. An alliance of two or more countries that agree to eliminate tariffs Your answer is correct. C. An alliance of two or more countries that agree to keep tariffs at a fixed rate D. An alliance of two or more countries that agree to slowly decrease tariffs
B. The continent of North America establishes a free trade agreement with Mexico.
Which of the following best demonstrates an example of a regional trade agreement? A. The governments of multiple countries in Europe and Africa agree on trading practices. B. The continent of North America establishes a free trade agreement with Mexico. This is the correct answer. C. Germany establishes a trade agreement with Brazil. D. China establishes a trade agreement with the United States and all of Europe. E. The United States establishes a trade agreement with China.
B. Nontariff barrier
Which of the following can affect either the price or the quantity of an import? A. Import tariff B. Nontariff barrier This is the correct answer. C. Tariff barrier D. Export tariff E. Transit tariff
D. Black market
Which of the following closely approximates a price based on supply and demand for a currency, instead of a government-controlled price? A. Multiple exchange-rate system B. Purchasing power parity C. License D. Black market Your answer is correct. E. Advanced import deposit
A. Spain
Which of the following countries was not a member of the initial version of the European Union, known as the European Economic Community? A. Spain Your answer is correct. B. France C. Germany D. Belgium
A Neomercantilism
Which of the following describes the approach of countries that run favorable balances of trade to achieve a social or political objective? A. Neomercantilism This is the correct answer .B. Absolute advantage C. Diamond of national competitive advantage D. Unrestricted trade E. Mercantilism
C. Bretton Woods Agreement
Which of the following established a par value for each currency initially quoted in terms of gold and the United States dollar? A. United Nations B. Quota System Agreement C. Bretton Woods Agreement This is the correct answer. D. Bermuda Agreement E. Jamaica Agreement
B. NASDAQ
Which of the following foreign exchanges trades options in seven currencies? A. Euromoney B. NASDAQ Your answer is correct. C. Liffe Connect D. CME Globex E. NYSE Liffe
D. A decrease in trade barriers
Which of the following identifies a major reason for companies like RIM to prosper? A. The establishment of quotas B. The establishment of voluntary export restraints C. The placement of embargoes D. A decrease in trade barriers This is the correct answer
B. Sales conditions
Which of the following is NOT an important feature for competitive superiority under the diamond of national competitive advantage theory? A. Strategy, structure, and rivalry B. Sales conditions This is the correct answer. C. Demand conditions D. Factor conditions E. Related and supporting industries
A. To promote exports
Which of the following is a reason why a nation would want to keep its currency weaker than other currencies? A. To promote exports This is the correct answer. B. To receive financial assistance C. To be able to pay workers more D. To lower import taxes
E. Protectionism
Which of the following is broadly defined as governmental actions taken to influence international trade? A. Dumping B. Import substitution C. Export-led development D. Balance-of-trade adjustments E. Protectionism This is the correct answer
D. The company no longer gets the majority of its business from North America.
Which of the following is not true of RIM's growth? A. Growth in some countries has been hindered by political difficulties. B. The organization is pursuing internationalization as a growth strategy. C. Europe, the Middle East, and Asia are all target markets for the company. D. The company no longer gets the majority of its business from North America. This the correct answer
C. Brain drain
Which of the following is one of the major effects of outward migration on countries? A. Lower costs of social services B. Less competition C. Brain drain This is the correct answer. D. Substitution E. Lower startup costs
B. Preserving national culture
Which of the following is one of the major noneconomic rationales for government intervention in trade? A. Increasing trade controls B. Preserving national culture This is the correct answer. C. Fighting unemployment D. Monitoring foreign investments E. Making balance of trade adjustments
B. Cultural heritage
Which of the following issues is the G20 least likely to discuss? A. International trade B. Cultural heritage This is the correct answer. C. Terrorist attacks D. Green energy
A. Differences in views on privacy that have threatened business investments
Which of the following political barriers has RIM faced in the Middle East? A. Differences in views on privacy that have threatened business investments Your answer is correct. B. Differences in religion that have led to a reluctant sales force C. Differences in views on women's rights that have limited the potential market D. Differences in social policy that have led to protests
D. Industrialization argument
Which of the following presumes that the unregulated importation of lower priced products prevents the development of a domestic industry? A. Balance of trade adjustment argument B. Infant industry argument C. Comparable access argument D. Industrialization argument Your answer is correct .E. Diversification argument
B. Products that are in the maturity phase of the life cycle
Which of the following product types would most likely be produced in developing countries? A. Products that require rapid innovations B. Products that are in the maturity phase of the life cycle Your answer is correct.C. Luxury products where cost is of little concern D. Products that require specialized technical skills E. Products that use a differentiation strategy instead of competing on price
D. Economic integration
Which of the following refers to the political and monetary agreements between nations and world regions wherein preference is given to member countries? A. Customs unions B. Trade groups. C. Most-favored-nations clauses D. Economic integration This is the correct answer. E. Common markets
D. Sight draft
Which of the following requires payment to be made when it is presented? A. Arbitrage draft B. Bill of exchange C. Letter of credit D. Sight draft This is the correct answer. E. Time draft
C. The EU includes the same countries as the continent of Western Europe.
Which of the following statements regarding the EU is not true? A. The EU represents about a half billion people. B. The EU has a GDP of about $16 trillion. C. The EU includes the same countries as the continent of Western Europe. Your answer is correct. D. The EU is the world's most advanced regional economic bloc.
A. Fundamental forecasting
Which of the following uses trends in economic variables to predict future rates? A. Fundamental forecasting This is the correct answer. B. Illusory correlation C. Technical forecasting D. Fundamental analysis E. Chartists forecasting
C. International Monetary Fund
Which of the following was created at a meeting between the major allied governments toward the close of World War II in an effort to bring economic stability and growth to the postwar world? A. Smithsonian Agreement B. Quota System Agreement C. International Monetary Fund Your answer is correct. D. Bretton Woods Agreement E. Jamaica Agreement
B. European Monetary System
Which of the following was set up as a means of creating exchange-rate stability within the European Community? A. European Central Bank B. European Monetary System This is the correct answer. C. The Treaty of Maastricht D. European Monetary Union E. European Financial Crisis
D. Each member nation must open its markets equally to every other member nation.
Which of the following was the fundamental principle of the General Agreement on Tariffs and Trade (GATT)? A. Each member nation must trade with other nations in the same geographic proximity. B. Each member nation must close its markets to every other member nation. C. Each member nation must develop monetary agreements with member nations. D. Each member nation must open its markets equally to every other member nation. Your answer is correct. E. Each member nation must not open its markets equally to any other nation.
B. Think of the EU as a single, enormous trading center.
Which piece of advice might the people who work at Allianz, the insurance firm featured in the video, most likely recommend to other companies starting up their businesses in the EU? A. Recognize that although the EU is a bloc, each country has different cultural practices. B. Think of the EU as a single, enormous trading center. Your answer is correct. C. Separate the EU into two large chunks: east and west. D. Use Germany as a guideline, because it's the EU's economic center.
C. Convincing decision makers
Which tactic for dealing with importers includes using economic and noneconomic arguments to support particular policies? A. Invoking reciprocal requirements B. Using countertrade C. Convincing decision makers Your answer is correct. D. Using administrative delays E. Changing the competitive environment
D. To facilitate regular business transactions
Why do companies enter the foreign-exchange market? A. To encourage international business transactions B. Because use of the foreign exchange market is dictated by trade agreements C. Because they must use foreign currency to buy products from international firms D. To facilitate regular business transactions This is the correct answer. E. To avoid tariffs on business transactions
B. Factor movement
__________ is an alternative to trade that might or might not be a more efficient use of resources. A. Mercantilism B. Factor movement This is the correct answer. C. Competition D. Neomercantilism E. Firm strategy
A. quotas
OPEC, a group of 13 oil-producing countries, relies on _______ to influence and control prices A. quotas This is the correct answer. B. commodity agreements C. NAFTA D. customs unions E. common markets
B. Subsidies
____________ represent(s) a form of direct assistance to local companies to boost competitiveness. A. Aids and loans B. Subsidies Your answer is correct. C. Customs valuation D. Tied aid E. Quotas