Global Marketing Chapter 2

Which of the following are features of international trade in the twenty-first century? (Select all that apply.)

Countries are more interdependent economically. There are greater opportunities for international trade. (All of these)

True or false: The World Trade Organization (WTO) has strict means of enforcing decisions that are made by the panel of experts.

False

True or false: Protests against global organizations, such as the WTO and IMF, stem from the basic complaint that globalization hinders international trade efforts.

False Reason: This statement is false. The basic complaint of protesters against the WTO, IMF, and others is the amalgam of unintended consequences of globalization.

Which of the following show that the World Trade Organization has gained acceptance by the trading community?

More than 60 countries have joined the WTO. The WTO has actively settled trade disputes. The WTO has conducted successful negotiations to open markets in information technology and telecommunication. (All fo these)

Which of the following are international investments (the minus side) on the U.S. balance-of-payments statement?

cost of goods that are imported cost of foreign military and economic aid money spent by U.S. tourists overseas new overseas investments (All of these)

An objective of the General Agreement on Trade in Services (GATS) is to

eliminate barriers that discriminate against foreign services.

The World Trade Organization has achieved success by

engaging in continuous discussions to resolve issues that hinder trade.

A country's balance-of-payments statement serves which of the following purposes?

evaluating the country's international economic position

International trade contracts are commonly written in terms of special drawing rights because ______ do not usually affect special drawing rights.

exchange-rate fluctuations

Which of the following are crucial for U.S. trade, according to the Omnibus Trade and Competitiveness Act?

expansion of exports import relief access to market (All of these)

Violators are assessed antidumping duties when

goods are sold in a market below cost

Balance-of-payment statements are mainly used by

government agencies.

Which of the following enabled U.S. companies to expand exports and investment worldwide following World War II?

growing consumer and industrial markets a rise in standards of living (All of these)

The Omnibus Trade and Competitiveness Act is designed to

handle what appear to be unjust trading practices deal effectively with trade deficits help businesses increase their international competitiveness (All of these)

The United States spread the ideal of capitalism worldwide after World War II in order to

hinder the spread of communism.

International trade patterns were disrupted in the last half of the twentieth century because of the

ideological split between countries with a socialist Marxist approach and those with a democratic capitalist approach.

Which of the following can be presented before a panel of experts selected by the World Trade Organization?

issues related to foods that are genetically modified disputes related to quotas for raw materials matters regarding country-of-origin labeling (All of these)

Antidumping laws

keep out certain imports.

To impede the entry of unwanted goods into its markets, countries commonly impose which of the following types of barriers?

legal exchange psychological (All of these)

Trade barriers are primarily encouraged by

local industries.

Which of the following are nontariff barriers?

market barriers boycotts monetary barriers quotas (All of these)

A government can accomplish currency blockage by

not allowing importers to exchange their national currency for the sellers' currency.

After World War II, the United States helped build new markets and strengthen the economies of noncommunist countries by

offering financial assistance.

Which of the following are receipts (the plus side) on the U.S. balance-of-payments statement?

payments of interest and dividends on investments abroad foreign government payments to the United States export sales of merchandise (All of these)

A country resorts to protectionism in order to

prevent foreign companies from intruding on domestic markets.

Which of the following issues and laws were addressed in the export expansion section of the Omnibus Trade and Competitiveness Act?

promotion of exports export controls the Foreign Corrupt Practices Act (All of these)

Which of the following arguments in favor of protectionism do economists support?

protecting infant industries strengthening national defense industrializing underdeveloped nations (All of these)

With increasing competition in world markets, there is growing tendency to adopt ______.

protectionism

Which of the following services are performed by institutions under the World Bank Group?

providing investors with investment guarantees against noncommercial risk helping to settle disputes between governments and foreign investors lending money to strengthen the private sector of developing countries (All of these)

The limit that a government places on imports in terms of number of units or dollar amounts is called a(n) __________________.

quota

Trade treaties before the General Agreement on Tariffs and Trade tended to

raise barriers.

A deficit results on a country's balance-of-payments statement when

receipts are less than international payments.

Countries use import licenses to

regulate the flow and amount of imported goods.

The International Monetary Fund was formed so that

unstable currencies would not become barriers to trade.

In which of the following areas was improvement made in the Uruguay Round agreement?

valuation of customs safeguards and standards antidumping rules of origin (All of these)

Voluntary export restraints (VERs) impose restrictions on the

volume of exports.

Money constantly flows into and out of a country in which of the following ways?

when a country makes foreign investments when a country exports and imports products and services when countries exchange monetary gifts when a country receives cash receipts or makes cash payments (All of these)

Which of the following are typical reasons for exchange-control restrictions enacted by a government?

Balance-of-payments positions are preserved. Particular industries are encouraged. (All of these)

Match the various kinds of floats (in the left column) with their corresponding descriptions (in the right column).

Clean float: Countries are not permitted to manipulate currencies Dirty float: Countries are permitted to manipulate currencies

Match the types of accounts in a balance-of-payments statement (in the left column) with the items they contain (in the right column).

Current Account: unilateral transfers of funds; merchandise imports, exports; services Capital Account: short-term capital movements; portfolio investment; direct investment Reserves Account: increases or decreases in foreign exchange; increases or decreases in liabilities to foreign central banks

Which of the following are elements of the General Agreement on Tariffs and Trade?

Customs tariffs can be used to protect domestic industries. Problems in global trade will be solved through consultation. Trade will be nondiscriminatory. (All of these)

Which of the following are results of the trade barriers that governments set up?

Development of domestic industry is encouraged. Existing industry is protected. (All of these)

Which of the following led to the creation of new global marketing opportunities?

Economic cooperation and assistance developed at a large scale. Countries that were previously underdeveloped and economies that were war-torn grew rapidly. (All of these)

Which of the following are consequences of imposing tariffs?

International relations are weakened. The sources of supply for manufacturers become restricted. Government control in economic matters becomes greater. (All of these)

In the context of controlling imports, which of the following is a true statement about an import license?

It can be used to restrict imports on a case-by-case basis.

Which of the following statements is true about the General Agreement on Tariffs and Trade?

It created a forum in which member countries could seek lower tariffs for their products.

Which of the following statements about the original General Agreement on Tariffs and Trade is true?

It created an agency to oversee international business transactions.

Which of the following statements about the World Trade Organization are accurate?

It issues binding decisions on members. It is an institution. It encompasses the structure of GATT. (All of these)

Which of the following are accurate statements about a quota?

It places an absolute limit on imported items. It tends to raise prices.

Which of the following are accurate statements about a nation's balance-of-payments statement?

It records all financial transactions between residents and the rest of the world. It maintains records through a double-entry bookkeeping system. (All of these)

Which of the following are accurate statements about the General Agreement on Trade in Services?

It sought to make additional changes in opening up the telecommunications and financial services sectors. It set up procedures concerning business and investment. (All of these)

The U.S. program to help Europe rebuild after World War II was the

Marshall Plan.

Which of the following are correct statements about tariffs?

Tariffs tend to discourage the importation of goods. Tariffs are based on quantity or value of goods. Tariffs help generate government revenue. (All of these)

Which of the following are problems associated with a government requirement that exchange amounts be on deposit for a period of time prior to the date goods are imported?

The Importer does not have use of the funds for other business purposes. The practice tends to raise the price of the imported goods. The value of the funds can be reduced by inflation. (All of these)

In the context of a nation's balance-of-payments statement, which of the following reasons explain why the current account is of particular interest to international business?

The account shows all payments and receipts from investments and overseas employment. The account records the value of all imported and exported merchandise and services. (All of these)

A country signs the the General Agreement on Tariffs and Trade and becomes a member. In doing so, the country agrees to which of the following?

The country will use consultation in resolving global trade issues.

Which of the following statements about tariffs is true?

They are arbitrary.

True or false: A voluntary export restraint is called "voluntary" because limits on the volume of exported goods are set by the exporting country.

True

True or false: Sometimes trade can be restricted by using standards.

True

The General Agreement on Tariffs and Trade became a part of the World Trade Organization with the ratification of the

Uruguay Round agreements.

The World Trade Organization was created following the signing of the

Uruguay Round trade agreement.

Laws related to antidumping policies are permitted under the rules of the

World Trade Organization.

The General Agreement on Tariffs and Trade was signed by the United States and 22 other countries in the years immediately following

World War II.

The issue of how open foreign markets are for the entry of U.S. goods is addressed by way of market _____________.

access

Which features of the Omnibus Trade and Competitiveness Act have helped to improve export trade?

access to trade data through the National Trade Data Bank filing and tracking of export license requests using computer-based procedures (All of these)

Which of the following refers to the situation in which a country does not allow goods or services to be exported to a specified country?

an embargo

The country of Cileria refuses to sell goods to its neighboring country Isotola after a series of armed border clashes with Isotola troops. In this scenario, Cileria's decision is an example of

an embargo.

If imports economically harm a U.S. company even though the imports are fairly priced, the company can

ask the government for temporary relief.

An ever-expanding variety of goods and services are in demand by consumers all around the world. Given the importance of world trade, countries are inclined to

attempt to control the trade for their own benefit.

The international financial transactions of a nation are recorded by a system of accounts. This system of accounts is known as the ______________ ___________ _________________.

balance of payments

Negotiations of trade treaties were historically made on a ______ basis.

bilateral

Which of the following are types of exchange-control restrictions?

blocking currency government approval for foreign exchange (All of these)

A political dispute arises between the governments of two trading countries, Ataya and Hembark. Consequently, the government of Ataya decides to restrict the import of goods from Hembark and sever all trading relations with it. In this scenario, Atava's decision is an example of a government

boycott.

The complete restriction that a government places on buying or bringing in specific goods from another country is called a ________

boycott.

A country wants to maintain a record of its direct investment. The entry should be made in the ______ account.

capital

Which of the following barriers impede market access?

restrictive technical standards customs barriers restrictive licensing requirements tariffs and quotas (All of these)

The government of a nation imposes a tax on goods that enter its borders. This tax is known as a(n)

tariff.

Which of the following are means by which governments create barriers to currency exchange?

the amount of exchange the rate of exchange rules regarding how quickly exchanged currency can be used (All of these)

A deficit on a country's balance-of-payments statement can be reduced or eliminated when

the country's international receipts increase. the country's expenditures decrease in other countries. (All of these)

In the context of a nation's balance-of-payments statement, which account is primarily of interest to international business?

the current account

Which of the following are unintended consequences of globalization?

the loss of cultures exploitation of workers increased oil prices diminished national sovereignty (All of these)

The monetary barrier of blocked currency is used for which of the following purposes?

to help protect a balance-of-payments position

Which of the following are reasons that protectionists want government to impose restrictions on trade?

to maintain the standard of living to keep up employment and reduce unemployment to protect natural resources (All of these)

What were the purposes of making improvements in rules and procedures in certain areas in the Uruguay Round agreement?

to make them predictable to make them open to make them equitable (All of these)

Which of the following are objectives of the World Bank Group?

to promote sustainable growth to reduce poverty to improve standards of living (All of these)

Which of the following are reasons the import relief section of the Omnibus Trade and Competitiveness Act was created?

to reduce competitive pressure to combat severe financial harm to compensate loss of market share (All of these)

Which of the following are reasons for imposing certain nontariff barriers to trade?

to safeguard product quality to ensure safety to protect health (All of these)

Which of the following are objectives of the International Monetary Fund?

to stabilize foreign exchange rates to help expand international trade to establish freely convertible currencies (All of these)

When there is ______ among countries, financial transactions take place between businesses or consumers of the countries.

trade

Since World War II, the institutions under the World Bank Group have been instrumental in the expansion of international

trade.

The Omnibus Trade and Competitiveness Act directs that

trading partners must be dealt with on the basis of how they actually act.