Intro to Business Chapter 3

What is a free-trade zone?

A selected area where products can be imported duty-free and then stored, assembled, or used in manufacturing.

Which of the following tends to discourage international trade?

An embargo

The difference between a country's total payments to other countries and its total receipts from other countries

Balance of payments

The difference between the amount of money that comes into a country and the amount that goes out is called..?

Balance of payments

The difference between a country's total exports and total imports is called the..?

Balance of trade

The difference between a country's total exports and total imports of goods

Balance of trade

Danielle's company is expanding into Korea and has asked her to research the language, customs, and values of the Korean people. Which aspect of the international business environment is Danielle investigating?

Cultural influences

T/F A joint venture is an agreement among two or more countries to remove duties and trade barriers on products traded among them

False

T/F Countries that devote most of their economies to agriculture usually provide more and better goods and services for their citizens

False

T/F Domestic business refers to business activities needed for creating, shipping, and selling goods across national borders.

False

T/F Franchising is selling the right to use a trademark or brand name for a fee or royalty

False

The amount a country owes to other countries is called..?

Foreign debt

A country in which a multinational company conducts business activities is called the..?

Home country

Goods and services bought from another country

Imports

A nation's transportation, communication, and utility systems

Infrastructure

________ rates are the cost of using someone else's money

Interest

This group helps maintain an orderly system of world exchange rates

International Monetary Fund (IMF)

An agreement between two or more companies from different countries to share a business project

Joint venture

Selling the right to use some intangible property for a fee or royalty is called..?

Licensing

An organization that conducts business in several countries

Multinational company (MNC)

A limit on the quantity of a product that may be imported or exported within a given period

Quota

A limit that a government places on the quantity of a product that may be exported or imported during a given period is called a..?

Quota

Which of the following is NOT a goal of the World Trade Organization?

Strengthening import quotas

A tax that a government places on certain imported products

Tariff

A tax that a government places on certain imported products is called..?

Tariff

Licensing..?

Usually involves selling a product or service

A trade _____ is a restriction to free trade

barrier

The situation in which a country specializes in the production of a good or service at which it is relative more efficient is called ______ advantage

comparative

The accepted behaviors, customs, and values of a society are referred to as _____

culture

Foreign ____________________ is the amount a country owes to other countries

debt

If a nation imports more than it exports, it has a trade ______

deficit

When a government completely stops the import or export of a product, it is called a(n) ______

embargo

The _____ rate is the value of a currency in one country compared with the value in another

exchange

International business is frequently referred to as world or _____ trade

foreign

A(n) _______ is the right to use a company name or business process in a specific way

franchise

Items bought from other countries are called _____

imports

A nation's transportation, communication, and utility systems is referred to as its _______

infrastructure

A(n) _________ company is an organization that does business in several countries

multinational

Goods and services sold to another country

Exports

Stopping the importing or exporting of a certain product or service

Embargo

The value of money of one country expressed in terms of the money of another country

Exchange rate

Government restrictions to reduce free trade

Trade barrier

T/F A nation with a trade surplus is said to have a favorable trade position

True

T/F If a country exports more than it imports, it has a trade surplus

True

T/F Some countries limit the amount of money their citizens can take out of the country when they travel

True

T/F When a country has a favorable balance of payments, the value of its currency is usually constant or rising

True

A negative or _______ balance of payments occurs when a country sends out more money than it brings in

unfavorable