________ is a decentralized exchange encompassing a global computer network of
foreign exchange traders and other market participants.
A) Securities exchanges
B) Eurocurrency market
C) Interbank market
D) Over-the-counter market
Answer:
Which of the following countries is a member of the North American Free Trade
Agreement (NAFTA)?
A) Costa Rica
B) Honduras
C) Venezuela
D) Canada
Answer:
A third country, Funland, also produces food and drinks. In Funland, one resource unit
produces 8 tons of food and 6 tons of drinks. Which of the following is true about
Funland, Foodland, and Drinkland?
A) Funland has a comparative advantage in producing drinks.
B) Funland has a comparative advantage in producing food.
C) Funland has an absolute advantage in producing food.
D) Funland has an absolute advantage in producing drinks.
Answer:
Small and medium-sized companies often find trade missions very appealing because
________.
A) it gives companies an opportunity to visit new places
B) such trips are usually cheap even for the smallest of businesses
C) it provides access to important business officials and executives
D) it helps companies analyze the strategies of all major competitors
Answer:
Mika finds that he has very little control over several aspects of his life. Whether his
education or occupation, the few options available to him are determined by his birth.
Which of the following is a characteristic of Mika’s society?
A) There is no distinction between the people of high and low birth in Mika’s culture.
B) Mika belongs to a society in which there is little scope for mobility.
C) Mika belongs to a society in which economic wealth determines social status.
D) Mika belongs to a society in which caste system and social status is a myth.
Answer:
Which of the following methods is used by a host country to restrict incoming foreign
direct investment?
A) differential tax rates for earnings abroad
B) insurance to cover the risk of overseas investments
C) low-interest loans to investors
D) performance demands
Answer:
A promotional strategy designed to create buyer demand that will encourage channel
members to stock a company’s product is called a ________.
A) pull strategy
B) push strategy
C) retrenchment strategy
D) stability strategy
Answer:
The approach recommended by Valerie is called ________.
A) polycentric staffing
B) ethnocentric staffing
C) vertical integration
D) horizontal integration
Answer:
The exchange rate between the euro (€) and the dollar is €0.8461/$. Which of the
following is the correct direct quote on the dollar?
A) $2.20/€
B) $1.1819/€
C) $5.50/€
D) $0.8461/€
Answer:
Had the government taken over (with compensation) the assets of Global Trading but
not those of any other company, the government’s actions would be an example of
________.
A) expropriation
B) nationalization
C) confiscation
D) communism
Answer:
Susan decides not to set up production facilities in Konesia because its business laws
are vague and are often interpreted according to the convenience of the government.
Bribery is a common feature in conducting business deals there and a refusal to pay up
is not an option. What kind of government does Konesia have?
A) democratic
B) theocratic
C) totalitarian
D) pluralist
Answer:
Happyland’s international trade situation illustrates that the country is experiencing a
________.
A) current account deficit
B) capital account deficit
C) current account surplus
D) capital account surplus
Answer:
The ________ was established in 2006 between the United States and Costa Rica, El
Salvador, Guatemala, Honduras, Nicaragua, and later the Dominican Republic.
A) NAFTA
B) LAFTA
C) CAFTA-DR
D) CAN
Answer:
Which of the following is true regarding the protection of infant industries from
international competition?
A) It is difficult for governments to identify the industries worth protecting.
B) Protection of infant industries helps domestic companies become innovative.
C) Protection from competition leads to improved quality and lower prices.
D) Protection leads to more economic good than harm.
Answer:
A ________ is a political system in which a country’s religious leaders serve as its
political leaders.
A) democracy
B) theocracy
C) plutocracy
D) septocracy
Answer:
If these twenty-six nations continue to eliminate all barriers to trade among themselves
and set a common trade policy against nonmembers, they would create a ________.
A) free trade area
B) preferential trading area
C) customs union
D) political union
Answer:
Which of the following is an important goal of regional economic integration?
A) to increase the selling prices of products
B) to raise the living standards of people
C) to limit the choice of products available to customers
D) to establish a socialist government
Answer:
Planning for decruitment normally occurs when a company ________.
A) discontinues manufacturing or selling in a market
B) finds that current HR levels are lesser than anticipated needs
C) plans to establish multiple foreign subsidiaries
D) hires new executive leadership to implement a growth strategy
Answer:
Which of the following is true of counterfeit goods?
A) Developed nations normally have the most active counterfeiting markets.
B) Counterfeiting is more common among less visible local brands than global brands.
C) Most counterfeit products are imitations of products that normally enjoy legal
protection.
D) Engineered industrial components and medicines are among the few categories of
products that cannot be counterfeited.
Answer:
Supporters affirm that globalization ________.
A) brings an end to practices like outsourcing
B) causes worker dislocation that gradually lowers wages
C) increases wealth and efficiency in all countries
D) curbs market flexibility in developed nations
Answer:
Which of the following methods is being used when a host country provides lower tax
rates and low-interest loans to firms from abroad for encouraging inflows of foreign
direct investment?
A) financial incentives
B) sanctions
C) local content requirements
D) embargoes
Answer:
Sam has been studying the price of wheat across markets. If a kilogram of wheat costs
€1.5 in France and $1 in the United States, the law of one price would tell us ________.
A) the expected exchange rate between the euro and the dollar is €1.5/$
B) wheat is over priced in France
C) wheat is under priced in France
D) an arbitrage opportunity exists in the international wheat market
Answer:
A country imposes a tariff on goods that it sells abroad at the request of another nation.
This is an example of a(n) ________.
A) embargo
B) ad valorem tariff
C) compound tariff
D) voluntary export restraint
Answer:
Product liability laws are those which ________.
A) provide consumers with a wide variety of products at fair prices
B) add value to a product throughout its production and distribution
C) protect people from defective products
D) define the taxation on locally manufactured products
Answer:
Which of the following systems of production is used by GMI?
A) job
B) craft
C) rationalized
D) customized
Answer:
Which of the following refers to the exchange of goods or services directly for other
goods or services without the use of money?
A) offset
B) barter
C) counterpurchase
D) switch trading
Answer:
Which of the following arguments against globalization, if true, could be made using
Jeans Unlimited as an example?
A) Globalization results in the government making nearly all economy-related
decisions.
B) Globalization permits the use of unethical practices as long as it brings the company
profits.
C) Globalization causes companies to produce goods in nations with the most lenient
labor regulations.
D) Globalization places least emphasis on corporate social responsibility.
Answer:
If Gem Jewels wants its employees to get “into the minds” of the local people, it should
provide ________.
A) language training
B) sensitivity training
C) cultural orientations
D) environmental briefings
Answer:
Which of the following terms is used to refer to the ideas, beliefs, and customs to which
people are emotionally attached?
A) attitudes
B) memetics
C) aesthetics
D) values
Answer:
Computer companies buying hardware components from component-makers,
assembling them in their own facilities, and selling completed systems to consumers
and businesses is an example of ________.
A) telecommuting
B) franchising
C) outsourcing
D) licensing
Answer: