Factor proportions theory differs from the theory of comparative advantage in that the
focus of factor proportions theory is on the ________.
A) usage of the most abundant factors of production, while the focus of the comparative
advantage theory is on the productivity of the production process
B) accumulation of financial wealth in the form of gold by encouraging imports and
discouraging exports, while the comparative advantage theory focuses on usage of the
most abundant factors of production
C) productivity of the production process, while the comparative advantage theory
focuses on maximization of production and consumption
D) minimization of trade surpluses, whereas the comparative advantage theory focuses
on the mercantilist idea that international trade is a zero-sum game
Which of the following promotional strategies is being used by a company that hires a
fleet of trucks to drive through village squares and hand out free trial packages to
potential end users?
A) push strategy
B) pull strategy
C) retrenchment strategy
D) differentiation strategy
Global Trading just learned that the government of one country in which it does
business has taken over the entire electric utility industry. The government’s actions are
an example of ________.
A) confiscation
B) globalization
C) expropriation
D) nationalization
Purchasing power parity is better at predicting ________ exchange rates.
A) cross
B) spot
C) short-term
D) long-term
When a country’s currency is weak, the price of its ________.
A) exports and imports on world markets declines
B) exports and imports on world markets increases
C) exports on world markets declines and the price of its imports increases
D) exports on world markets increases and the price of its imports declines
Which of the following statements is true of national production?
A) Marketers use GDP or GNP figures to determine whether a country’s population is
wealthy enough to purchase its products.
B) Per capita numbers provide a detailed picture of development of the entire country.
C) Gross product figures accurately indicate whether a nation’s economy is growing or
shrinking.
D) Volunteer work and unpaid household work are considered in GDP and GNP.
________ is increasing the pace of both cultural diffusion and cultural change.
A) Collectivism
B) Enculturation
C) Fundamentalism
D) Globalization
Scenario: Topsy Turvey Toys and Ureshi Toys
Topsy Turvey Toys is a U.S.-based toy retailer that buys all its merchandise from Ureshi
Toys, a Japan-based toy manufacturer with production facilities in twelve nations.
Ureshi Toys markets its toys globally without modification.
Ureshi Toys selling its products to Topsy Turvey Toys is an example of ________.
A) outsourcing
B) insourcing
C) exporting
D) importing
Economic integration whereby countries remove all barriers to trade and the movement
of labor and capital between themselves and set a common trade policy against
nonmembers is called a ________.
A) free trade area
B) customs union
C) common market
D) preferential trade area
When the law of one price is violated, a(n) ________ opportunity arises.
A) dumping
B) countertrade
C) arbitrage
D) devaluation
During which stage of the product life cycle are companies looking for low-cost
production bases in developing nations to supply a growing worldwide market?
A) product decline stage
B) new product stage
C) maturing product stage
D) standardized product stage
Which of the following government regulations or actions would indicate that a
government is quite receptive to international trade and investment?
A) creating investment barriers to ensure domestic control of an industry
B) requiring companies to divulge proprietary secrets
C) allowing companies to remove profits earned in the domestic market
D) barring companies entirely from certain sectors of the domestic economy
A document ordering the importer to pay the exporter a specified sum of money at a
specified time is called a ________.
A) bill of lading
B) letter of credit
C) bill of exchange
D) management contract
If a kilogram of coal costs €1.5 in Germany and $1 in the United States, the law of
one price calculates the expected exchange rate between the euro and the dollar to be
________.
A) €0.67/$
B) €1.5/$
C) $1.67/€
D) $0.12/€
Which of the following approaches to cultural training gets a trainee “under the skin” of
the local people?
A) language training
B) cultural narcissism
C) sensitivity training
D) cultural orientation
Guanxi, in the Chinese business context, means ________.
A) bribing government officials
B) manufacturing inexpensive products
C) personal relationships
D) preference for communism