MG401 Ch5-8

________ refers to the unwanted cultural influence in a nation that can cause great distress and lead governments to block imports it believes to be harmful. A) Cultural imperialism B) Cultural protectionism C) Dumping D) Capitalism

A) Cultural imperialism

The main purpose of the ________ is to debate and amend legislation proposed by the European Commission of the EU. A) European Parliament B) Council of the European Union C) Court of Auditors D) Court of Justice

A) European Parliament

The primary purpose of the Gulf Cooperation Council at its formation was to ________. A) cooperate with the increasingly powerful trading blocs in Europe at the time B) create the largest free trade area on the planet C) increase members' tariff rates from an average of 7.5 percent to 15 percent D) introduce barriers to trade and investment

A) cooperate with the increasingly powerful trading blocs in Europe at the time

Which type of investment involves the acquisition of foreign assets for the purpose of controlling them? A) foreign direct investment B) foreign portfolio investment C) capital investment D) controlling ownership

A) foreign direct investment

Scenario: Blickinstock at the Crossroads Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin America. To that end, Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary. Keith Moon, Blickinstock's vice president of global business development, will be making a presentation to the board outlining the company's options. If Blickinstock's home government tries to stop the company from investing in Latin America, the government is most likely trying to ________. A) protect its balance of payments B) prevent a monopoly situation from occurring C) discourage the entry of a "sunset" company D) protect the "sunset" companies in Latin America

A) protect its balance of payments

Which of the following will add to the cost of an imported product by levying an additional tax upon it? A) tariffs B) quotas C) local content requirements D) embargoes

A) tariffs

Factor proportions theory differs from the theory of comparative advantage in that the focus of factor proportions theory is on the ________. A) usage of the most abundant factors of production, while the focus of the comparative advantage theory is on the productivity of the production process B) accumulation of financial wealth in the form of gold by encouraging imports and discouraging exports, while the comparative advantage theory focuses on usage of the most abundant factors of production C) productivity of the production process, while the comparative advantage theory focuses on maximization of production and consumption D) minimization of trade surpluses, whereas the comparative advantage theory focuses on the mercantilist idea that international trade is a zero-sum game

A) usage of the most abundant factors of production, while the focus of the comparative advantage theory is on the productivity of the production process

Coca-Cola has collaborative arrangements whereby it produces concentrate that it sells to other companies to bottle its drinks. Which of the following terms best describes this type of arrangement? A) vertical integration B) horizontal integration C) link alliance D) scale alliance

A) vertical integration

Which of the following is an argument offered by the new trade theory? A) It is in line with the factor proportions theory. B) There are gains to be made from specialization and increasing economies of scale. C) The companies first to market forgo the opportunities to create barriers to entry. D) Market forces alone play a role in assisting the home companies in a country.

B) There are gains to be made from specialization and increasing economies of scale.

The ________ records transactions involving the purchase and sale of assets. A) current account B) capital account C) debt account D) official reserves account

B) capital account

Which of the following is prompting farmers in many developed nations to discover new ways to manage risk and increase agricultural efficiency? A) enforcement of trade embargoes and tariffs B) exposure of agribusiness to market forces C) provision of extensive government subsidies D) designation of agricultural products as dual use products

B) exposure of agribusiness to market forces

Which element of national competitive advantage theory divides resources into two groups: basic and advanced? A) demand conditions B) factor conditions C) related and supporting industries D) firm, strategy, structure, and rivalry

B) factor conditions

According to the international product life cycle theory, in which stage of a product's life cycle does a company directly invest in production facilities in countries where demand is great enough to warrant production facilities? A) new product stage B) maturing product stage C) standardized product stage D) declining product stage

B) maturing product stage

Which of the following is an important goal of regional economic integration? A) to increase the selling prices of products B) to raise the living standards of people C) to limit the choice of products available to customers D) to establish a socialist government

B) to raise the living standards of people

Which of the following financial companies in the United States is involved in activities of selling of goods abroad, and offers insurance on foreign accounts receivable? A) National Cooperative Bank B) Overseas Private Investment Corporation C) Export-Import Bank D) Inter-American Development Bank

C) Export-Import Bank

Which of the following statements is true of NAFTA? A) It introduced a common currency for trade between the U.S., Mexico and Canada. B) It overrode the local content requirements and rules of origin for products manufactured in the member nations. C) It eliminated all tariffs and nontariff trade barriers on goods originating from within North America. D) It called for stringent rules regarding government procurement practices and the imposition of countervailing duties.

C) It eliminated all tariffs and nontariff trade barriers on goods originating from within North America.

________ says that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports. A) Absolute advantage theory B) Factor proportions theory C) Mercantilism D) Communism

C) Mercantilism

Which theory suggests that a country should export those goods and services for which it is more productive than other countries and import those goods and services for which other countries are more productive? A) mercantilism B) comparative advantage C) absolute advantage D) specialization of countries

C) absolute advantage

The international product life cycle theory was put forth for ________. A) service goods B) abundant resources C) manufactured goods D) natural resources

C) manufactured goods

The importance of trade for a nation can be measured by ________. A) examining the amount of wealth acquired by the national government through restrictive trade policies B) the living standards of people involved in only trade activities C) the number of acquired territories the nation has that serves as sources of inexpensive raw materials D) examining the volume of its trade relative to its total output

D) examining the volume of its trade relative to its total output