MGMT 1120 CH 3 Test

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

Airports

Which of the following countries most likely has a comparative advantage?

An Asian country that produces quality automobiles with little opportunity cost compared to other countries

Which of the following countries has a trade surplus?

An Asian country whose total value of exports exceeds its total value of imports.

Prost was the first automobile company in the world to introduce child safety locks in its vehicles. This feature soon became a major selling point for consumers all over the world. As a result, other automobile companies began providing a similar feature in their vehicles. In this scenario, which of the following is most likely to have influenced other companies to install child safety locks?

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

Which of the following statements is true of foreign outsourcing?

It drives down the cost of production.

Which of the following is a function of the International Monetary Fund (IMF)?

Promoting global trade

A _____ refers to the overage that occurs when more money flows into a nation than out of that nation.

balance of payments surplus

A(n) _____ refers to a group of countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among the member nations.

common market

Unless they face major trade barriers, the industries in any country tend to produce products for which they have a _____, which means that they tend to turn out those goods that have the lowest opportunity cost compared to other countries.

comparative advantage

Companies typically engage in _____ to meet the needs of customers that don't have access to hard currency or credit.

countertrade

In _____, firms either acquire foreign firms or develop new facilities from the ground up in foreign countries.

direct investment

In the context of the strategies for reaching global markets, a(n) _____ is a firm that is offered the right to produce and market another firm's products if it agrees to specific operating requirements.

franchisee

Compared to the United States, China and India have:

higher gross domestic product growth rates.

In the context of the barriers to international trade, the term _____ refers to a country's physical facilities that support economic activity.

infrastructure

A _____ is formed when two or more companies share resources, risks, and profits without actually merging, to pursue specific opportunities.

joint venture

To achieve its basic mission of promoting international economic cooperation and stable growth, the International Monetary Fund (IMF):

lends money to member nations.

When a country produces more of one good, it must produce less of another good (assuming that resources are finite). The value of the second-best choice—the value of the production that a country gives up in order to produce the first product—represents the _____ of producing the first product.

opportunity cost

Trade restrictions were created to:

protect domestic industry.

The term _____ refers to the shortfall that occurs when the total value of a nation's imports is higher than the total value of its exports.

trade deficit