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Chapter Quiz
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1
Two reasons why countries trade are because a country may not be able to produce a good it wants, and because countries may have embargoes and quotas established with other countries.
A)True
B)False
2
The United States is the largest exporter and importer in the world.
A)True
B)False
3
In recent years, the United States has run a trade surplus, while Japan has run a trade deficit.
A)True
B)False
4
Improvements in technology and the rise in democracy have led to a decline of the global economy.
A)True
B)False
5
The largest free trade area in the world is NAFTA.
A)True
B)False
6
The exchange of goods and services by different countries is called:
A)licensing.
B)international trade.
C)foreign exchange.
D)globalization.
E)importing.
7
A(n) __________ is the ability to produce more of a good than another producer with the same quantity of inputs.
A)home-country advantage
B)developed country advantage
C)absolute advantage
D)comparative advantage
E)competitive advantage
8
The Law of __________ states that producers should produce the goods they are most efficient at producing and purchase from others the goods they are less efficient at producing.
A)Efficiency
B)International Profitability
C)Competitive Advantage
D)Comparative Advantage
E)Absolute Advantage
9
Goods and services that are sold abroad are called __________, whereas goods and services that are purchased abroad are called __________.
A)imports; exports
B)exports; imports
C)tariffs; embargoes
D)quotas; imports
E)embargoes; quotas
10
Engaging in a variety of operations in order to offset sluggish sales in one market by stronger sales elsewhere refers to:
A)diversification.
B)branching out.
C)exporting.
D)franchising.
E)going global.
11
If a U.S. manufacturer of appliances buys steel from Japan to produce stoves, the manufacturer is:
A)importing consumer goods.
B)part of a licensing agreement.
C)part of a multinational corporation.
D)exporting consumer goods.
E)importing materials.
12
The difference between the value of the goods a country exports and the value of the goods it imports is called what?
A)Balance surplus
B)Trade deficit
C)Import-export balance
D)Balance of exchange
E)Balance of trade
13
A tax on imports is called a(n):
A)import ban.
B)embargo.
C)quota.
D)tariff.
E)merchandise duty.
14
__________ are restrictions on the quantity of a good that can enter a country.
A)Protections
B)Tariffs
C)Quotas
D)Embargoes
E)Licensing Agreements
15
A total ban on the import of a good from a particular country is called a(n):
A)tariff.
B)quota.
C)export ban.
D)licensing agreement.
E)embargo
16
A(n) __________ is a wholesaler or agent who markets products for companies that want to do business abroad.
A)foreign intermediary
B)licenser
C)strategic alliance member
D)protector
E)multinational agent
17
A business that maintains a presence in two or more countries, has a considerable portion of its assets invested in international activities, and considers world-wide opportunities is called a(n):
A)strategic alliance.
B)multinational corporation.
C)foreign intermediary.
D)franchise.
E)intercontinental business.
18
Which of the following is NOT a challenge of working in an international environment?
A)Managers must learn to deal with suppliers and producers from different countries.
B)Managers must become familiar with local laws.
C)Managers must understand the different wants and desires of customers and employees in foreign countries.
D)Managers must learn to deal with unskilled workers.
E)Managers must become familiar with local customs.
19
Which of the following is a coalition?
A)OPEC
B)NAFTA
C)Pacific Rim trading bloc
D)exporting from Japan to the U.S.
E)importing from Japan to the U.S.
20
U.S. managers must remember that __________ has/have not yet been globalized.
A)cultural understanding
B)capitalism
C)business ethics
D)international trade
E)free trade





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