Question 1

The nation of Mainland recently reported that its imports for the previous year were $7 billion greater than its exports. During the same period, the country reported a favorable balance of payments. This information suggests

Accepted Answer

A)   Mainland has misstated information in its report. The nation must have had a balance of payments deficit since more money flowed out of Redland for imports than flowed into the country for its exports.
B)   Mainland's gold and other precious metal reserves increased in value.
C)   money inflows from tourism, foreign aid, foreign investment, and other sources more than offset Mainland's trade deficit.
D)   Mainland devalued their currency to obtain a more favorable exchange rate.E) C) and D)
F) B) and C)

Question 2

Rhett heard predictions that the value of the U.S. dollar is likely to increase substantially over the next six months. This should

Accepted Answer

A)   hurt his overseas efforts since his prices will be very high.
B)   stop overseas efforts because dollars will not be negotiable.
C)   help his overseas efforts since his prices will be lower.
D)   force him into accepting no other currency except the dollar.E) None of the above
F) A) and C)

Question 3

Differences in electrical systems throughout the world could weaken a U.S. firm's ability to sell its products to other countries.

Accepted Answer

A) True 
 B)False

Question 4

An important principle for firms desiring to export is

Accepted Answer

A)   sell to countries with high standards of living.
B)   keep in mind that American methods are probably always best.
C)   find a need in the global market and fill it.
D)   if your product sells well in the U.S. it will sell well globally.E) B) and C)
F) C) and D)

Question 5

________ tariffs are designed to raise money for the government.

Accepted Answer

A)   Regulatory
B)   Revenue
C)   Price
D)   ProfitE) A) and D)
F) B) and C)

Question 6

Free trade is the movement of goods and services between nations without political or economic barriers.

Accepted Answer

A) True 
 B)False

Question 7

Products made in Canada are sold in the U.S. because these two nations agree to eliminate economic and political barriers between nations. They participate in free trade.

Accepted Answer

A) True 
 B)False

Question 8

Bartering is the exchange of goods or services for other goods or services without the exchange of money.

Accepted Answer

A) True 
 B)False

Question 9

Today, over 90% of the companies doing business globally believe it is important for their employees to have experience working in other countries.

Accepted Answer

A) True 
 B)False

Question 10

With respect to free trade, many American citizens prefer "fair trade, not free trade."

Accepted Answer

A) True 
 B)False

Question 11

CAFTA permits the United States, Canada, and Mexico to reduce trade barriers with one another while maintaining independent trade agreements with other countries.

Accepted Answer

A) True 
 B)False

Question 12

Belgium, Hungary, Sweden, and Germany are all members of the EU. Which of the following statements is an accurate description of trade between these nations?

Accepted Answer

A)   Belgium and Germany are permitted to engage in free trade due to their proximity to each other, however, Sweden only has free trade with Finland, and Hungary only has free trade with Switzerland, Austria, and Croatia.
B)   The EU has abolished customs duties at internal borders for these and other member nations and put in place a uniform system for taxing imports. Internal border controls subsequently disappeared.
C)   Customs officers that collect tariffs are now found at the internal borders of all EU member nations.
D)   Belgium, Hungary, Sweden, and Germany are four nations strongly considering abandoning the EU common market. The global trading bloc has proved inefficient in these nations' attracting global business.E) B) and D)
F) B) and C)

Question 13

Maria's aunt, Juanita, is cruising in South America. Juanita told Maria she would be glad to buy her some jewelry while in one of the ports. She said she will shop in Santiago, Chile, because the exchange rate would be to her benefit. This means

Accepted Answer

A)   the currency in the U.S. is weak against the Chilean currency.
B)   the currency in the U.S. will be almost equal to the Chilean currency; otherwise it would not be a good exchange.
C)   the currency in the U.S. is devalued.
D)   the currency in the U.S. has strength against the Chilean currency.E) None of the above
F) A) and D)

Question 14

________ is the exchange of merchandise or services for other merchandise or services without the exchange of money.

Accepted Answer

A)   Exporting
B)   Bartering
C)   Importing
D)   FactoringE) A) and B)
F) C) and D)

Question 15

The United States' highest trade deficit is with China.

Accepted Answer

A) True 
 B)False

Question 16

A trade deficit is the same as an unfavorable balance of trade.

Accepted Answer

A) True 
 B)False

Question 17

Foreign direct investment refers to the buying of goods produced in another country.

Accepted Answer

A) True 
 B)False

Question 18

One objective of NAFTA is to

Accepted Answer

A)   increase trade barriers between the countries involved.
B)   decrease investment opportunities in the countries involved.
C)   promote conditions of fair competition for the three trading partners.
D)   improve working conditions in Central America.E) A) and C)
F) None of the above

Question 19

The ban on the sale of Cuban cigars in the United States is an example of an import quota.

Accepted Answer

A) True 
 B)False

Question 20

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n)

Accepted Answer

A)   export trading company.
B)   international brokerage house.
C)   keiretsu.
D)   global trade bank.E) A) and B)
F) None of the above

Exam 3: Doing Business in Global Markets

Maria's aunt, Juanita, is cruising in South America. Juanita told Maria she would be glad to buy her some jewelry while in one of the ports. She said she will shop in Santiago, Chile, because the exchange rate would be to her benefit. This means

Correct AnswerverifiedShow Answer

Differences in electrical systems throughout the world could weaken a U.S. firm's ability to sell its products to other countries.

Correct AnswerverifiedShow Answer

With respect to free trade, many American citizens prefer "fair trade, not free trade."

Correct AnswerverifiedShow Answer

Bartering is the exchange of goods or services for other goods or services without the exchange of money.

Correct AnswerverifiedShow Answer

________ is the exchange of merchandise or services for other merchandise or services without the exchange of money.

Correct AnswerverifiedShow Answer

A trade deficit is the same as an unfavorable balance of trade.

Correct AnswerverifiedShow Answer

The United States' highest trade deficit is with China.

Correct AnswerverifiedShow Answer

An important principle for firms desiring to export is

Correct AnswerverifiedShow Answer

Free trade is the movement of goods and services between nations without political or economic barriers.

Correct AnswerverifiedShow Answer

Today, over 90% of the companies doing business globally believe it is important for their employees to have experience working in other countries.

Correct AnswerverifiedShow Answer

CAFTA permits the United States, Canada, and Mexico to reduce trade barriers with one another while maintaining independent trade agreements with other countries.

Correct AnswerverifiedShow Answer

Products made in Canada are sold in the U.S. because these two nations agree to eliminate economic and political barriers between nations. They participate in free trade.

Correct AnswerverifiedShow Answer

One objective of NAFTA is to

Correct AnswerverifiedShow Answer

The ban on the sale of Cuban cigars in the United States is an example of an import quota.

Correct AnswerverifiedShow Answer

The nation of Mainland recently reported that its imports for the previous year were $7 billion greater than its exports. During the same period, the country reported a favorable balance of payments. This information suggests

Correct AnswerverifiedShow Answer

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n)

Correct AnswerverifiedShow Answer

________ tariffs are designed to raise money for the government.

Correct AnswerverifiedShow Answer

Foreign direct investment refers to the buying of goods produced in another country.

Correct AnswerverifiedShow Answer

Rhett heard predictions that the value of the U.S. dollar is likely to increase substantially over the next six months. This should

Correct AnswerverifiedShow Answer

Belgium, Hungary, Sweden, and Germany are all members of the EU. Which of the following statements is an accurate description of trade between these nations?

Correct AnswerverifiedShow Answer

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