Business Chapter 3 terms

Which countries are the United States' best trading partners for U.S. exports? a. Canada and Mexico b. Japan and India c. China and the United Kingdom d. Canada and China e. Canada and Brazil

a. Canada and Mexico

Sub-Saharan Africa is home to __________ of the top-ten fastest-growing economies in the world. a. three b. two c. ten d. five e. seven

e. seven

Which of the following banks specifically makes short-term loans to developing countries experiencing balance-of-payment deficits? a. The African Development Bank (AFDB) b. The European Bank for Reconstruction and Development c. The Inter-American Development Bank (IDB) d. The International Monetary Fund (IMF) e. The Asian Development Bank (ADB)

d. The International Monetary Fund (IMF)

The organization established by the Uruguay Round of the GATT, whose purpose is to mediate trade disputes among nations is called: a. the North American Free Trade Agreement (NAFTA). b. trade protectionism. c. the Commonwealth of Independent States. d. World Trade Organization (WTO). e. the European Union.

d. World Trade Organization (WTO).

Which of the following is a reason for trade restrictions? a. Protection for new or weak industries b. Higher prices for consumers c. Cutbacks in jobs d. Restriction of consumers' choices

a. Protection for new or weak industries

According to the International Monetary Fund (IMF), what are the world economic growth projections? a. The IMF predicts a gradual global growth in both advanced and developing countries. b. The IMF predicts negative growth in both advanced and developing countries. c. The IMF predicts little to no global growth in either advanced or developing countries. d. The IMF predicts gradual global growth in advanced countries, but negative growth in developing countries. e. The IMF predicts a rapid global growth in developing countries, but no global growth in advanced countries.

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

Which of the following agreements, when ratified, created a free trade area among the United States, Mexico, and Canada? a. The North American Free Trade Agreement (NAFTA) b. General Agreement on Tariffs and Trade (GATT) c. The North American Free Three d. The Central American Free Trade Agreement (CAFTA) e. The Commonwealth of Independent States

a. The North American Free Trade Agreement (NAFTA)

A bill of lading is defined as: a. a document issued by a transport carrier to an exporter to prove that merchandise has been shipped. b. a document that is issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary. c. a document that is issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank. d. providing complete control over operations when exporting through an export-import agent. e. providing a link between buyers and sellers in different countries that allows both to avoid financial restrictions.

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

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: a. continue to produce coffee and trade it for U.S. products Brazil needs and cannot produce. b. abandon coffee and produce a product Brazil's residents strongly demand. c. increase coffee advertising to create a greater demand for coffee in Brazil. d. stop trading coffee with the U.S. and only trade coffee with its neighboring countries. e. slow production of coffee and allocate Brazilian resources elsewhere.

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

The selling of products in a foreign country at lower prices than those charged in the producing country is called: a. dumping. b. an import duty. c. an embargo. d. foreign-exchange control. e. an import quota.

a. dumping.

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? a. Economic community b. Most-favored-nation status (MFN) c. Brexit d. The Trans-Pacific Partnership (TPP) e. Negotiation rounds

b. Most-favored-nation status (MFN)

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: a. absolute advantage. b. comparative advantage. c. monopolistic advantage. d. supply and demand. e. economic profit.

b. comparative advantage

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: a. countertrade. b. licensing. c. joint venture. d. strategic alliance. e. export-import agent.

b. licensing.

Who supports multilateral development banks (MDB)? a. Industrialized nations other than the United States b. Developing nations c. Industrialized nations d. The governments of the countries being assisted e. Only the United States Hide Feedback

c. Industrialized nations

A country with a trade surplus generally has a favorable balance of payments, which means: a. other nations will probably lose confidence in the country's economy. b. more money flows out of the country than into it. c. the country is receiving more money from trade with foreign countries than it is paying out. d. a continual surplus may indicate that the country encourages imports by not imposing trade restrictions. e. the country may experience declining production and higher unemployment.

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

Which U.S. government export assistance program facilitates advocacy to assist U.S. firms competing for major projects and procurements worldwide? a. Federal Trade Commission b. Small Business Administration c. International Trade Administration d. Advocacy Center e. STAT-USA/Internet

d. Advocacy Center

Which of the following U.S. government export assistance programs offers assistance and information to exporters through its domestic and overseas commercial officers? a. Federal Trade Commission b. Small Business Administration c. Advocacy Center d. International Trade Administration e. STAT-USA/Internet

d. International trade administration

A firm that operates on a worldwide scale without ties to any specific nation or region is known as a: a. totally owned facilities. b. joint venture. c. strategic alliance. d. multinational enterprise. e. trading company.

d. multinational enterprise.

Which organization or U.S. government export program publishes guides that offer assistance and exporting information to small and medium-sized companies? a. STAT-USA/Internet b. Advocacy Center c. International Trade Administration d. Federal Trade Commission e. Small Business Administration

e. Small Business Administration

What is the main function of the Export-Import Bank of the United States? a. To make short-term loans to developing countries experiencing balance-of-payment deficits b. To provide loans to developing countries to help them grow c. To foster the economic and social development of its African members d. To promote economic and social progress in Asian and Pacific regions e. To assist in financing the exports of American firms

e. To assist in financing the exports of American firms

A country may attempt to protect its own domestic industries by imposing a(n) _____, a type of tax, on imported products. a. embargo b. currency devaluation c. import quota d. foreign-exchange control e. import duty (tariff)

e. import duty (tariff)

Currency devaluation ___________ the cost of foreign goods and _______ the cost of domestic goods to foreign firms. a. decreases; increases b. does not change; increases c. decreases; does not change d. does not change; decreases e. increases; decreases

e. increases; decreases