MID TERM BUSINESS PRINCIPLES Chapter 3

Which of the following countries has a trade deficit?

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

__________is an agreement between two or more firms to jointly pursue a specific opportunity without actually merging their businesses.

A strategic alliance

The government of Lebitz, a European country, learns that low-priced textile imports from Pruneia, an Asian country, are affecting the sales of domestic textile companies. The Lebitzian government decides to levy a 6% tax on all textile goods imported from other countries. In this scenario, which of the following trade restrictions does the Lebitzian government impose?

A tariff

Grettzee, a musical instruments manufacturing company, imports high-quality maple wood from Resumbro, a South Asian country where maple is found in abundance. Which of the following is most likely to have influenced Grettzee's decision to import raw materials from Resumbro?

Access to factors of production

Which of the following countries exemplifies the concept of opportunity cost?

An Asian country that increases its production of sugar by decreasing its production of cocoa

In the context of international trade, which of the following statements is true of comparative advantage?

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

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.

False

In the context of competitive advantage, the value of the first-best choice represents the opportunity cost of producing a second product.

False

Luchen Modo, a software development firm in Asia, launched a new software for smartphones that allowed users to remotely control certain functions and features of their vehicles, such as ignition, windshields, and headlights. The success of this technology prompted other companies across the world to produce similar software. In this scenario, which of the following is most likely to have influenced other companies to produce similar software?

Inflow of innovation

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

Involvement of social responsibility

In the context of global trade, which of the following statements is true of balance of payments?

It includes foreign borrowing and lending.

In the context of foreign direct investment, which of the following statements is true of a partnership?

It is a formal, long-term agreement.

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.

Who among the following is most likely to benefit in a case where there is a weak dollar against a euro?

John is an American who exports goods to Europe.

In the context of economic considerations when entering a foreign market, which of the following is an example of an energy infrastructure in a country?

Power plants

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.

The balance of trade plays a central role in determining the balance of payments.

True

Nessi Bru, an American construction firm, and West Brook Inc., a Canadian construction firm, collaborated on an infrastructure project to build a railway track from Regina in Canada to Minneapolis in the United States. They shared their resources, risks, and profits, but they still functioned as two independent firms. In this scenario, Nessi Bru and West Brook Inc. were most likely involved in _____.

a joint venture

Romernia, an Asian country, imported goods and services worth $700 million in the last fiscal year. It exported goods worth $400 million in the same year. The difference in the value of Romernia's imports and exports is known as _____.

the balance of trade

In the context of global trade, the__________is a measurement of the value of one nation's currency relative to the currency of other nations.

exchange rate

Brixbee Inc., a European electronics company, has given a domestic firm in Lougard, an Asian country, the rights to manufacture and market its product within Lougard. In this scenario, Brixbee Inc. is most likely involved in _____.

foreign licensing

Mora, an American jewelry manufacturing company, wants to import diamonds from Renoria, an Asian country. However, the officials in charge of the trade in Renoria agree to formalize the transaction only if they are paid a certain amount of money for their personal benefit. Since American businesses are prohibited from offering bribes to any foreign nation, Mora has to look to another exporter of diamonds. In the given scenario, Mora is most likely facing the barrier of _____.

legal differences

__________is a widely accepted social movement that supports a buyer's right to be informed, to be safe, to choose, and to be heard.

Consumerism

The total value of the goods exported by Maulini, a South American country, in the last fiscal year was lower in comparison to the total value of the goods imported by it. Given this information, Maulini had a _____ in the last fiscal year.

trade deficit

When the total value of a nation's exports is higher than the total value of its imports, that country has a(n) _____.

trade surplus