BUSN Ch.3

Despite the growth rates in many high-population countries being weak, most of these nations remain ahead of the United States in terms of development and prosperity. True or False

False

In the context of the strategies for reaching global markets, franchising is a strategy to seek foreign suppliers. True or False

False

_____ is an agreement between two or more firms to jointly pursue a specific opportunity without actually merging their businesses. a. A strategic alliance b. A common market c. Countertrade d. Direct investment

a. A strategic alliance

Which of the following strategies for reaching global markets allows firms to expand into foreign markets with little or no investment? a. Foreign licensing b. Importing c. Insourcing d. Foreign outsourcing

a. Foreign licensing

The _____ is an organization of 188 member nations that promotes global economic cooperation and stable growth. a. Bank for International Settlements b. International Monetary Fund c. World Trade Organization d. World Bank

b. International Monetary Fund

In the context of international trade, which of the following statements is true of comparative advantage? a. It is the tendency of a country to choose goods that have a higher opportunity cost compared to other countries. b. As technology changes, nations may gain or lose comparative advantage in various industries. c. Despite evolving workforces, developing countries maintain a static comparative advantage. d. It is subjected to the industries in developing countries facing major trade barriers.

b. As technology changes, nations may gain or lose comparative advantage in various industries.

Who among the following is most likely to benefit in a case where there is a weak dollar against a euro? a. Joinieker Inc. is an American firm with European operations. b. John is an American who exports goods to Europe. c. Nierin Corp. is an American firm that imports goods from Europe. d. Elise is an American who is touring Europe.

b. John is an American who exports goods to Europe.

When a country produces more of one good, it must produce less of another good (assuming that resources are finite). The value of the second-best choice—the value of the production that a country gives up in order to produce the first product—represents the _____ of producing the first product. a. differential cost b. opportunity cost c. money cost d. sunk cost

b. opportunity cost

In the context of key economic considerations when entering a foreign market, the transportation infrastructure in a country most likely includes _____. a. the Internet b. power plants c. banking d. roads

d. roads

In the context of the barriers to international trade, per capita income is a key factor that determines the economic differences between two countries. True or False

True

Uniesia, an Asian company, wants to set up a production facility in Maurinia, an African country, because of the low labor costs in the country. However, Uniesia is unable to do so because of the situation of constant civil unrest in Maurinia. In the given scenario, Uniesia is most likely facing the barrier of _____. a. political differences b. sociocultural differences c. ethical differences d. economic differences

a. political differences

Revia and Bramin are European nations that signed a trade agreement with each other. The agreement stated that Revia would supply sugarcane to Bramin and Bramin would supply cloves to Revia. The agreement would benefit both nations and would even out some of the resource imbalances in the two nations. In this scenario, which of the following is most likely to have influenced the trade agreement between Revia and Bramin? a. Access to factors of production b. Reduced risk c. Ease of storage of goods d. Inflow of innovation

a. Access to factors of production

In the context of global trade, which of the following statements is true of balance of payments? a. It excludes overseas investments. b. It includes foreign borrowing and lending. c. Its deficit indicates more money flowing in than out. d. Its surplus indicates more money flowing out than in.

b. It includes foreign borrowing and lending.