Global Business: Practice exam #1

The condition that results when the value of a country's imports is greater than the value of its exports is called_____.

A Trade Deficit

A country can use cultural influence in that nation and can lead governments to block imports that are considered harmful

Cultural Imperialism

An _______ is a geographic area where imported or exported goods receive preferential tariff treatment

Foreign Trade Zone

Country X protects its domestic manufacturers from foreign competition by using a variety of nontariff barriers. Which of the following is NOT one of those nontariff barriers?

Foreign Trade Zones

Which of the following is true of government interventions in a country's trade practices?

Government interventions help companies take advantage of economies of scale and be the first movers in their industries

The Uruguay Round of Negotiations created the TRIPS agreement to ____________

Help standardize the intellectual property rules around the world

The theory of absolute advantage measures a nation's wealth by determining the _________

Living standard of its people

The purpose of _____ is to force companies from other nations to use local resources in their production processes, particularly labor.

Local Content Requirements

The smallest-portion of the total world trade comprises trade between______.

Low- income and middle-income nations

Most of the world merchandise trade is composed of trade in ________.

Manufactured Goods

Nations following the theory of _____ believed that the world's wealth was limited and that a nation could increase its share of the pie only at the expense of its neighbors.

Mercantilism

According to mercantilism, what should a country's primary goal be?

Promoting exports to enlarge gold and silver holdings

An ______ imposes a low tariff rate on a limited amount of imports of a specific good, but imposes a prohibitively high tariff on the good above that limited amount

Tariff Rate Quota

Which of the following will add to the cost of an imported product by levying an additional tax upon it?

Tariffs

International trade is the purchase, sale, or exchange of goods and services across national borders.

True

The protection of infant industries by a nation's government can cause domestic companies to become complacent toward innovation

True

Trade in services tends to be relatively more important for the world's richest countries.

True