BFO ch3

Domestic business refers to business activities needed for creating, shipping, and selling goods across national borders. True False

False

Franchising is selling the right to use a trademark or brand name for a fee or royalty. True False

False

In a free-trade zone, member countries agree to remove duties and trade barriers on products traded among them True False

False

The value of currency in one country compared with the value in another is called the interest rate True False

False

An economy that is largely involved in agriculture is generally unable to provide its citizens with a large number of high-quality products True False

True

If a country exports more than it imports, it has a trade surplus. True False

True

Multinational companies sometimes control a country's political power True False

True

One goal of the WTO (World Trade Organization) is to eliminate import quotas. True False

True

Without foreign trade, many things you buy would cost more or not be available. True False

True

The amount a country owes to other countries is called _____. a. Trade Deficit b. Foreign Debt c. National Debt Incorrect d. Balance of Payments

b. Foreign Debt

Maintains a system of world trade and exchange rates. a. NAFTA (North American Free Trade Agreement) b. IMF (International Monetary Fund c. WTO (World Trade Organization) d. World Bank

b. IMF (International Monetary Fund

This group helps maintain an orderly system of world exchange rates. a. World Bank b. International Monetary Fund (IMF) c. World Trade Organization (WTO) d. European Union

b. International Monetary Fund (IMF)

Key function is to provide economic aid to less-developed countries. a. WTO (World Trade Organization) b. World Bank c. IMF (International Monetary Fund) d. NAFTA (North American Free Trade Agreement)

b. World Bank

Which of the following tends to discourage international trade? a. a free-trade zone b. an embargo c. a common market d. a free-trade agreement

b. an embargo

A country's culture, traditions, and religion can sometimes act as informal trade barriers. True False

True

Danielle's company is expanding into Korea and has asked her to research the language, customs, and value of the Korean people. Which aspect of the international business environment is Danielle investigating? a. Cultural Influences b. Political and Legal Concerns c. Economic Development d. Geography

a. Cultural Influences

Which of the following is an example of a global strategy? a. The formula for Coca-Cola is the same no matter where in the world it is sold. b. Pizza Hut restaurants in Japan sell pizzas with squid toppings because squid is a popular Japanese food

a. The formula for Coca-Cola is the same no matter where in the world it is sold.

Infrastructure refers to a country's _____ a. transportation, communication, and utility systems b. system of local government Incorrect c. educational system

a. transportation, communication, and utility systems

Which of the following products is NOT imported to the United States in any great quantity? a. Silk b. Coffee c. Milk d. Oil

c. Milk

Settles trade disputes and enforces free-trade agreements between member countries. a. World Bank b. IMF (International Monetary Fund) c. WTO (World Trade Organization) d. NAFTA (North American Free Trade Agreement

c. WTO (World Trade Organization)

Created after World War II to provide loans for rebuilding. a. IMF (International Monetary Fund) b. WTO (World Trade Organization) c. World Bank d. NAFTA (North American Free Trade Agreement

c. World Bank

Which of the following situations represents an Absolute Advantage? Select one: a. Canada in rice production b. Saudi Arabia in fresh fish production c. Norway in orange and grapefruit production Incorrect d. Honduras in banana production

d. Honduras in banana production

Which of the following would likely cause the value of the dollar to RISE? a. Saudi Arabia doubles the price of the oil it sells in the United States. b. Higher U.S. interest rates. Incorrect c. An increased U.S. trade deficit. d. Lower U.S. inflation.

d. Lower U.S. inflation

Does away with tariffs on goods traded among the member countries. a. WTO (World Trade Organization b. World Bank c. IMF (International Monetary Fund) d. NAFTA (North American Free Trade Agreement

d. NAFTA (North American Free Trade Agreement

An agreement between two or more companies to share a business project is called _____. a. a proprietorship b. licensing c. franchising d. a joint venture

d. a joint venture