chapter 1,2 3 Test Business

Which of the following companies is involved in foreign licensing?

A European company that grants a company in Asia the rights to produce and sell its products

Which of the following countries has a trade deficit?

A European country that has a higher total value of imports than exports

In the context of international trade, which of the following companies is facing the barrier of legal differences?

An Asian company that can only import a limited amount of crude oil from an Arab country because of international trade restrictions

Chechinko, an African country, and Herito, an Asian country, use the same amount of resources to produce alcohol. Despite this, Chechinko is able to manufacture a higher quantity of alcohol than Herito. In this context, which of the following statements is definitely true of Chechinko?

Chechinko enjoys an absolute advantage in terms of alcohol production, relative to Herito.

In the context of emerging economies, which of the following statements is true of the BRIC countries?

India's subscriber base for cell phones has grown explosively over the past five years.

Prost was the first automobile company in the world to introduce child safety locks in its vehicles. This feature soon became a major selling point for consumers all over the world. As a result, other automobile companies began providing a similar feature in their vehicles. In this scenario, which of the following is most likely to have influenced other companies to install child safety locks?

Inflow of innovation

Sloimekia can manufacture more of a certain kind of cloth than its neighboring countries, although they all have the same amount of resources for the cloth's production. In this scenario, which of the following statements is true of Sloimekia?

It enjoys an absolute advantage in terms of the particular cloth it produces.

In the context of the strategies for reaching global markets, which of the following statements is true of exporting?

It is the most basic level of international market development.

Nescat Autos, an automobile manufacturing company, developed a secondary market for its products in a foreign country. This allowed the company to minimize its losses when its primary market failed to generate enough revenue to benefit the company. In this scenario, which of the following is most likely to have influenced Nescat Autos's decision to set up a market in another country?

Reduced risk

Who among the following is most likely to benefit when the dollar is strong and the euro is weak?

Ron is an American who is touring Europe.

In the context of the strategies for reaching global markets, which of the following is a disadvantage of foreign outsourcing?

The adherence to ethical standards by foreign producers is at risk.

Ithilium, a European country, is able to produce more electronics than Kilim, a North American country, even though both countries use the same amount of resources. Given this information, it can be deduced that Ithilium has a(n):

absolute advantage over Kilim.

Nakato, a South Asian country, exported goods worth $500 million and imported goods worth $400 million in the last fiscal year. The country also made foreign investments worth $300 million and provided foreign aid worth $100 million in disaster relief. Besides this, the country took a loan of $5 billion from the World Bank. This flow of money into and out of Nakato is measured by _____.

balance of payments

Quezi, an East Asian country, borrows $300 million from Muranico, a North American country, to fund its infrastructure projects. Quezi exports petroleum worth $700 million to Muranico and other countries. Besides this, Quezi provides foreign aid worth $40 million. In this scenario, this flow of money into and out of Quezi can be measured by _____.

balance of payments

In the fiscal year 2015-2016, Nescarto, an African country, imported goods worth $18 million and exported goods worth $20 million. It also borrowed $40 million from other countries. In this scenario, Nescarto had a _____ during 2015-2016.

balance of payments surplus

In__________, firms either acquire foreign firms or develop new facilities from the ground up in foreign countries.

direct investment

Neminski, an Arab country, is renowned for its rich oil reserves. It earns approximately $1.3 billion annually by selling crude oil to other countries. Given this information, Neminski is most likely involved in _____.

exporting

Tanya Williams, the chief executive officer of Willister Computers, believes that the firm is currently best equipped to enter the market of Troyesna, a fast-developing country. The firm offers a small-scale producer in Tryoesna the right to produce and market its goods based on a set of specific operating functions and requirements. This scenario of Willister Computers illustrates _____.

foreign franchising

Quistor Inc., a company based in the country of Waltefa, contracts with a small-scale supplier in the country of Carlesna to manufacture its computers and tablets across the world. This strategy by Quistor Inc. illustrates _____.

foreign outsourcing

Vieorien, a company based in the country of Dannistel, has permitted a foreign company the rights to produce its products and to use the Vieorien trademark. However, Vieorien does not have the authority or the rights to dictate the business operations of the foreign company. In this scenario, the foreign company that Vieorien deals with is the _____.

licensee

Mewpeth, an Asian nation, is the world's largest producer of cotton. The country was able to achieve this status by increasing the production of cotton and compromising on the production of wheat. The given scenario exemplifies the concept of _____.

opportunity cost

Trade restrictions were created to:

protect national security interests.

Inicell Inc., an American camera manufacturing company, wanted to import a few camera parts from Ruelia, an Asian company. However, the American government passed a taxation law that stated that a tax of 4% would be levied on all electronic imports. In this scenario, the American government imposed a(n) _____.

tariff

Wichasha, an African country, exports barley and cotton worth $100 million to Illema, a European country, and it imports sugarcane worth $25 million from Illema. As such, the total value of Wichasha's exports is higher than the total value of its imports. This difference between the value of Wichasha's exports and imports is known as _____.

the balance of trade

Which of the following strategies for reaching global markets is a specialized type of licensing?

Foreign franchising