intl busi 5-8
Which of the following has eliminated all tariffs and nontariff trade barriers on goods originating within North America?
. NAFTA
Today, the EU has ________ members.
28
Which of the following is NOT criteria for member nations to use the euro as outlined in the Maastricht Treaty?
A lack of price transparency
Which of the following statements about ASEAN is FALSE?
ASEAN consists of five countries.
Poland is a source of skilled and inexpensive labor; it is an appealing location for automobile manufacturers. But the country had little in the way of advanced automobile-production facilities when General Motors considered investing there. What type of investment options did GM decide to take to exploit this market opportunity?
Acquisition
Which of the following is NOT a provision of NAFTA?
Adding new countries to the European Union
Candidates for EU membership become members after they meet certain demands. Which of the following is NOT one of those demands?
Adopting an EU culture
The General Agreement on Trade in Services (GATS) created during the Uruguay Round identifies four different forms that international trade in services can take. Which of the following is NOT one of those forms?
Agriculture subsidy
Which of the following that is NOT home country foreign direct investment (FDI) promotion?
Apply differential tax rates.
Which of the following represents the core of the national competitive advantage theory?
A nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.
According to the U.S. ________, foreign direct investment (FDI) occurs when purchase of physical assets or a significant amount of the ownership (stock) of a company at least 10 percent of stock ownership in a company abroad.
Department of Commerce
A government may impose an import quota to protect its domestic producers by placing a limit on the amount of goods allowed to enter the country. Who are the winners of imposing such quotas?
Domestic producers
Western European plastic producers considered retaliating against Asian competitors whose prices were substantially lower in European markets than at home. Which of the following is this an example of?
Dumping
Which of the following is NOT a trade bloc in the Americas?
EU
What method of trade restriction is the U.S. using with Cuba?
Embargo
The structure of the EU includes all of the following EXCEPT the ______
European Free Trade Association (EFTA)
Which major region of the world's economy represents the highest intraregional exports?
European region
Governments often promote exports by helping companies finance their export activities. Which U.S. financing entity finances the export activities of companies in the United States and offers insurance on foreign accounts receivable?
Ex-Im Bank
Which one of the following factors should managers consider when deciding to build or purchase operations?
Exchange of stock ownership
Which of the following is NOT a component of Porter's diamond?
First-mover advantages
When Mercedes opened its first international car plant in Tuscaloosa County, Alabama, automobile-parts suppliers also moved to the area from Germany- bringing with them additional investment in the millions of dollars. What is this an example of?
Following clients
Acer, headquartered in Singapore but founded in Taiwan, manufactures personal computers and computer components. Just 20 years after it opened for business, Acer had spawned 10 subsidiaries worldwide and had become the dominant industry player in many emerging markets. What is this an example of?
Foreign direct investment
When a company's specialized knowledge is embodied in its employees, which of the following options would you recommend the company to take to exploit a market opportunity?
Foreign direct investment
Which of the following is the purchase of physical assets or a significant amount of the ownership (stock) of a company in another country in order to gain a measure of management control?
Foreign direct investment
Which of the following is the pattern of imports and exports that occurs in the absence of trade barriers?
Free trade
Which of the following statements about the Gulf Cooperation Council (GCC) is FALSE?
GCC was formed in 2014
The United States has banned all trade and investment with Cuba since 1962. This is an example of which type of government political intervention?
Gaining influence
Which of the following is NOT a problem facing Economic Community of West African States (ECOWAS)?
Good economic policies
Which of the following describes the Closer Economic Relations (CER) Agreement?
Goods cannot be sold within the other country's borders
Criteria that determine whether a good meets NAFTA rules of origin do NOT include which of the following?
Goods using materials sourced in China
Which of the following BEST describes building a new subsidiary abroad from the ground up?
Greenfield investment
Which of the following is NOT a reason why host governments intervene in foreign direct investment?
Increase capital outflows.
One of the most common instruments that government uses to promote trade with other nations is the establishment of a foreign trade zone. Which of the following is not an advantage of a free trade zone?
Increase government revenue by applying additional import tariff
Which of the following is limited in its power to explain why companies choose foreign direct investment over other forms of market entry?
International product life cycle theory
Which of the following statements BEST explains the benefits of international trade to nations?
International trade is an important engine for job creation.
Which of the following does NOT describe the theory of absolute advantage?
It allows for government intervention in international trade
The international product life cycle theory follows the path of a good through its life cycle in order to determine where it will be produced. Which of the following BEST defines the standardized product stage?
Competition pressures companies to lower prices in order to maintain sales levels
According to the infant industry argument, a country's emerging industries need protection from international competition during their development phase until they become sufficiently competitive internationally. Which of the following represents a major consequence to this argument?
Complacency toward innovation
Which of the following is an additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy?
Countervailing duty
Which of the following is TRUE with regard to the factor proportions theory?
Countries produce and export goods which require resources that are abundant and import goods that require resources in short supply
A cologne or perfume producer might want to bottle its fragrance in France and give it a French name. This type of image appeal can be strong enough to encourage foreign direct investment. What is this an example of?
Customer knowledge
Which agencies/departments/organizations in most countries record the destination of exports, the source of imports, and the physical quantities and values of goods crossing their borders?
Customs
According to your textbook, which of the following is one of the reasons that a large number of Korean manufacturers invested in production facilities in Tijuana, Mexico, just south of Mexico's border with California?
Local content requirements
An oil company is seeking market opportunity in the Middle East. Which of the following options is a compelling reason for the company to favor foreign direct investment over other options?
Location advantage
Which of the following theories stipulate tight control when the firm's concern is controlling the company's activities?
Market imperfections (internalization)
Which of the following is NOT an area of progress for The Economic Community of West African States (ECOWAS)?
Market integration
What is the main difference between a free trade area and a customs union?
Members of a customs union agree to treat trade with all nonmember nations in a similar manner.
__________ advocates that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports.
Mercantilism
According to the textbook, the number of cross-border investment activities and their rising values over time underlie long-term growth in foreign direct investment. Which form of investments is the majority of these activities?
Mergers and acquisitions
Which of the following is NOT an effect of NAFTA?
NAFTA has created jobs in the United States.
Which of the following statements BEST expresses the core beliefs of mercantilism?
Nations should increase their wealth by increasing their exports and minimizing their imports
Which of the following trade theories indicates that government may play a role in assisting its home companies and that government involvement has always been widely accepted in undertakings such as space exploration for national security reasons?
New trade
Governments of most nations have special agencies responsible for promoting exports. Which of the following is NOT a type of export promotion
Paying import duties
Which of the following is NOT a negative effect of regional trade agreements?
Political cooperation
The decision of whether to build facilities in a market abroad or to purchase existing operations in the local market can be difficult. Which of the following local issues do managers NOT have to worry about?
Preparing the home office travel schedule
For which of the following political motives do governments intervene in trade in order to ban certain defense-related goods from export to other nations?
Preserve national security
Consider the typical stuffed animal made in China, whose components are almost all imported to China. The stuffed animal's eyes are molded in Japan. Its outfit is imported from France. The polyester-fiber stuffing comes from either Germany or the United States. And the pile-fabric fur is produced in Korea. Only final assembly of these components occurs in China. This is an example of which management issue as it relates to foreign direct investment?
Production costs
Which of the following is NOT a driver of cross-border merger and acquisition deals?
The company wishing to ease its entry into the market in phases
Which of the following does NOT describe Asia Pacific Economic Cooperation (APEC)?
The stated aim of APEC is to build a trading bloc.
When a certain portion of the end product must consist of domestically produced goods or that a certain portion of the final cost of a product must come from domestic sources, this is the result of ______
local content requirements
The theory of the product life cycle's ability to accurately depict the trade flow of nations is being challenged. This is due to the fact that ________.
more companies are operating in international markets from their inception
Trade in services accounts for around 20 percent of total world trade. Although the importance of trade in services is growing for many nations, it tends to be relatively more important for the world's ___________ countries.
richest
The difference between the comparative advantage theory and the factor proportions theory is that the factor proportions theory ________
states that a country specializes in producing and exporting goods using the factors of production that are most abundant and thus cheapest- not the goods in which it is most productive
The main problem with mercantilism is that it views trade as a(n)
zero sum game
_______ says that a company will begin by exporting its product and later undertake foreign direct investment. The theory also says that, for a number of reasons, a country's export eventually becomes its import.
The product life cycle theory
Which of the following is a national accounting system that records all receipts coming into the nation and all payments to entities in other countries?
Balance of payments
Which of the following is NOT a fact about ASEAN that warrants consideration?
Common tariffs and standards
Country X specializes in the production of corn more efficiently than any other nation and buys rice which it produces less efficiently than corn from Country Z, despite the fact that Country Z produces rice less efficiently than Country X. Which of the following international trade theories agree with Country X's decision to buy rice from Country Z?
Comparative advantage
Which of the following trade theories states occurs when a country is unable to produce a good more efficiently than other nations, but produces the good more efficiently than it does any other good?
Comparative advantage
International product life cycle theory says that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle. Which of the following BEST defines the maturing product stage?
Competition pressures companies to lower prices in order to maintain sales levels
Consumers often end up paying more for products because of a lack of competition. Which of the following is a type of government intervention that leads to this problem?
Protection of infant industries
Which of the following is considered government subsidy?
Providing tax breaks and product price support
All of the following are political motives behind government intervention in trade EXCEPT ______
Pursuing strategic trade policy
Which of the following is a restriction on the amount (measured in units or weight) of a good that can enter or leave a country during a certain period of time?
Quota
Which of the following is the process whereby countries in a geographic region cooperate to reduce or eliminate barriers to the international flow of products, people, or capital
Regional economic integration (regionalism)
Which of the following describes administrative delays?
Regulatory controls or bureaucratic rules designed to impair the flow of imports into a country
Which of the following of Porter's diamond components supports the concept that companies that belong to a nation's internationally competitive industries do not exist in isolation, rather, supporting industries spring up to provide the inputs required by the industry?
Related and supporting industries
Which of the following is considered host country performance demand?
Require that a portion of the product's content originates locally
Mercantilism advocates that governments should actively intervene in international trade in order to maintain a trade surplus. Which of the following tools have mercantilist nations used to support this policy?
Subsidize export, ban import, and impose tariff charges and quotas
Which of the following statements does not describe the African Union (AU)?
The AU aims to continue the policies of colonialism.
Which organization is NOT integrated in Asia and the Pacific Rim?
The European Union
Which of the following statements BEST describes the new trade theory?
There are gains to be made from specialization and increasing economies of scale.
Which of the following is NOT an advantage of merger and acquisitions?
There is an opportunity to build a new manufacture from the ground up.
Which of the following is a reason that some European countries did not join the EU?
They feared destructive rivalries and loss of national sovereignty
You are a manager of a U.S. firm that plans on exporting a product that is designated as a dual use product and you need to have a U.S. government approval before export can take place. What is the political motive behind this intervention?
To preserve national security
There has been a persistent pattern of merchandise trade among nations. Trade between which economies of the world represents the highest level of total world merchandise trade?
Trade between the world's high-income economies
Which of the following is NOT a positive effect of regional trade agreements?
Trade diversion
The practice of mercantilism rested on three essential pillars. Which of the following are these three pillars?
Trade surpluses, government intervention, and colonialism
Which of the following is NOT a main regional trading bloc?
United Nations
In 1980, the closing of U.S. carmakers' production facilities in the United States was creating a volatile anti-Japan sentiment among the population and the U.S. Congress. Fearing punitive legislation, the Japanese government and its carmakers decide to limit its automobile exports to the United States. Which of the following is this an example of?
Voluntary export restraint (VER)
The creation of the ________ was perhaps the greatest achievement of the 1986 Uruguay Round.
World Trade Organization
Tariffs that are called specific tariffs are levied based on ______
a specific fee for each unit (measured by number, weight, etc.) of an imported product
A(n) ________ is levied as a percentage of the stated price of an imported product.
ad valorem tariff
Import of goods and services, income receipts on assets abroad, and income payments on foreign assets inside the country are tallied under the ______
current account
Historically, firms from ________ nations are accounting for an ever greater share of global merger and acquisition activity.
emerging
The currency of the EU is the ______
euro
Export tariff is levied mostly by the government of a country that is ________.
exporting products that consist mostly of low-priced natural resources
A ________ is the lowest extent of national integration.
free trade area
According to Adam Smith, a nation should concentrate on producing the goods in which it _______
has an absolute advantage in producing the product
When a U.S. company's subsidiary abroad remits profits back to the parent in the United States, it is recorded as ______
income receipts
