Ch. 3 Concept Checks

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

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

e. increases; decreases

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

e. International Trade Administration

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. STAT-USA/Internet d. Advocacy Center e. International Trade Administration

e. The International Monetary Fund (IMF)

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 Inter-American Development Bank (IDB) c. The Asian Development Bank (ADB) d. The European Bank for Reconstruction and Development e. The International Monetary Fund (IMF)

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

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. providing complete control over operations when exporting through an export-import agent. c. 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. d. providing a link between buyers and sellers in different countries that allows both to avoid financial restrictions. e. 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.

b. licensing.

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

d. import duty (tariff)

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

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

A country with a trade surplus generally has a favorable balance of payments, which means: a. more money flows out of the country than into it. b. other nations will probably lose confidence in the country's economy. 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.

b. multinational enterprise.

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

a. seven

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

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

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

b. comparative advantage.

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. supply and demand. d. monopolistic advantage. e. economic profit.

a. World Trade Organization (WTO).

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

c. dumping.

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

a. Most-favored-nation status (MFN)

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

a. To assist in financing the exports of American firms

What is the main function of the Export-Import Bank of the United States? a. To assist in financing the exports of American firms 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 make short-term loans to developing countries experiencing balance-of-payment deficits

e. Advocacy Center

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

b. Canada and Mexico

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

b. The North American Free Trade Agreement (NAFTA)

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

d. Protection for new or weak industries

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

c. Small Business Administration

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

b. Industrialized nations

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