International Business Chapter 5 Quiz, chapter 6 international business, MGT 301

Trade in services accounts for around 22 percent of total world trade. Although the importance of trade in service is growing for many nations, it tends to be relatively more important for the world's _____ countries
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Trade in services accounts for around 22 percent of total world trade. Although the importance of trade in service is growing for many nations, it tends to be relatively more important for the world's _____ countries
Richest
Which agencies/departments/organizations in most countries record the destination of exports, the source of imports, and the physical quantities and values of goods crossing their borders?
Customes
Which one of the following statements BEST explains the benefits of international trade to nations?
a. International trade protects countries increase the demand of its own domestic products
b. International trade helps countries to limit its import in order to protect its infant industries
c. International trade is an important engine for job creation
d. International trade increases tariff charges on imported goods to generate more revenue for the country
e. International trade helps countries limit access to products it cannot produce
e. International trade helps countries limit access to products it cannot produce
There has been a persistent pattern of merchandise trade among nations. Trade between which economies of the world represents the highest level of total world merchandise?
a. Trade between the​ world's middle-income economies
b. Trade between​ high-income economies nations and​ low-income economies nations
c. Trade between the​ world's low-income economies
d. Trade between the​ world's high-income economies
e. Trade between​ low-and middle-income nations
d. Trade between the​ world's high-income economies
As the world becomes even more like a global village, countries become dependent on trade with each other to sustain their own economies. However, the dangers of trade dependency become apparent when____
a nation experiences economic recession or political turmoil
__________ advocates that nations should accumulate financial​ wealth, usually in the form of​ gold, by encouraging exports and discouraging imports.
Mercantilism
The main problem with mercantilism is that it views trade as a
Zero-sum game
Which one of the following statements BEST expresses a pillar of ​ mercantilism?
a. International trade is a​ positive-sum game.
b. Governments acquire wealth through unrestrictive trade policies.
c. Nations should trade with other nations to obtain the goods they​ need, but​ don't produce.
d. Trade should be allowed to flow as dictated by market​ forces, not by government intervention.
e. Nations should increase their wealth by increasing their exports and minimizing their imports
e. Nations should increase their wealth by increasing their exports and minimizing their imports
The practice of mercantilism rested on three essential pillars. Which of the following sets identify these three​ pillars?
a. Colonialism, maximize​ production, and product standardization
b. Trade​ surpluses, government​ intervention, and colonialism
c. Free​ trade, subsidizing​ export, and banning imports
d. Free​ trade, government​ intervention, and colonialism
e. Free​ trade, colonialism, and strict government intervention
b. Trade surpluses, government intervention, and colonialism
Mercantilism advocates that governments should actively intervene in international trade to maintain a trade surplus. Which of the following tools have mercantilist nations used to support this​ policy?
a. Adopt the factor proportion theory.
b. Subsidize​ export, ban​ import, and impose tariff charges and quotas.
c. Liberalize import policies to ensure access to products that mercantilist nations do not produce.
d. Allow trade to flow as dictated by market forces to ensure trade surplus.
e. Concentrate on producing the goods in which it holds an​ advantage, then trade with other nations.
b. subsidize export, ban import, and impose tariff charges and quotas
According to Adam Smith, a nation should concentrate on producing the goods in which ithas an absolute advantage in producing the productWhich one of the following trade conditions occurs when a country is unable to produce a good more efficiently than other nations, but produces the good more efficiently than it does any other good?Comparative advantageWhich one of the following describes the theory of absolute advantage? a. International trade should be banned or restricted by tariffs and quotas. b. A nation with an absolute advantage is less efficient than other nations in the production of a particular product. c. It allows for government intervention in international trade. d. It allows the flow of trade as dictated by the central planning committee. e. It's the ability of a nation to produce a good more efficiently than any other nation.e. its the ability of a nation to produce a good more efficiently than any other nationCountry X specializes in the production of corn more efficiently than any other nation and buys rice which it produces less efficiently than corn from Country​ Z, despite the fact that Country Z produces rice less efficiently than Country X. Which of the following international trade theories agree with Country​ X's decision to buy rice from Country​ Z? a. International Product Life Cycle b. Comparative advantage c. Factor Proportions theory d. Mercantilism e. Absolute advantageb. Comparative advantageWhich one of the following is TRUE with regard to the factor proportions theory? a. Trade is still beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods. b. A nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade. c. A nation has the ability to produce a good more efficiently than any other nation. d. Nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports. e. Countries produce and export goods which require resources that are abundant and import goods that require resources in short supply.e. Countries produce and export goods which require resources that are abundant and import goods that require resources in short supply.The difference between the comparative advantage theory and the factor proportions theory is that the factor proportions theorystates that a country specializes in producing and exporting goods using the factors of production that are most abundant and thus cheapest - not the goods in which it is most productive.International product life cycle theory says that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle. Which of the following BEST defines the maturing product stage? a. Competition pressures companies to lower prices in order to maintain sales levels. b. Exports begin to account for an increasingly greater share of total product sales. c. Keep production where initial research and development occurred. d. The exact level of demand in the domestic market is highly uncertain. e. Most production now takes place outside the innovating country.b. Exports begin to account for an increasingly greater share of total product sales._______ Says that a company will begin by exporting its product and later undertake foreign direct investment. The theory also says that, for a number of reasons, a country's export eventually becomes its import.The product life cycle theoryThe international product life cycle theory follows the path of a good through its life cycle in order to determine where it will be produced. Which one of the following BEST defines the standardized product stage? a. competition pressures companies to lower prices in order to maintain sales levels. b. Exports begin to account for an increasingly greater share of total product sales. c. Both domestic and international markets become fully aware of the product and its benefits. d. The product begins generating sales in developing nations. e. The exact level of demand in the domestic market is highly uncertain.a. Competition pressures companies to lower prices in order to maintain sales levels.The ability of the theory of the product life cycle to accurately depict the trade flow of nations is being challenged. This is due to the fact that _____more companies are operating in international markets from their inceptionWhich one of the following statements BEST describes the new trade theory? a. The theory emphasizes productivity rather than a​ nation's resources. b. The theory does not assume any role of government intervention. c. The theory states​ that, as specialization and output​ increase, companies can increase the unit costs of production. d. There are gains to be made from specialization and increasing economies of scale. E. Gains made as a result of increasing economies of scale will increase the cost of production and thus the price to​ buyers, which will force the competition to increase their prices as well.d. There are gains to be made from specialization and increasing economies of scaleWhich one of the following trade theories indicates that government may play a role in assisting its home companies and that government involvement has always been widely accepted in undertakings such as space exploration for national security​ reasons? a. Comparative advantage b. New trade c. Leontief paradox d. Absolute advantage e. Product life cycleb. New tradeWhich one of the following is a component of Porter's diamond? a. International product life cycle b. First-mover advantages c. comparative advantages d. Firm strategy, structure, and rivalry e. Geographyd. Firm strategy, structure, and rivalryWhich one of the following represents the core of the national competitive advantage​ theory? a. Trade is still beneficial even if one country is less efficient in the production of two​ goods, as long as it is less inefficient in the production of one of the goods. b. International trade is a​ positive-sum game. c. Countries produce and export goods that require resources that are abundant and import goods that require resources in short supply. d. A​ nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade. e. A country may dominate in the export of a certain product because it has a​ home-based firm that has acquired a​ first-mover advantage.d. A nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.Which one of the following of​ Porter's diamond components supports the concept that companies that belong to a​ nation's internationally competitive industries do not exist in​ isolation, rather, supporting industries spring up to provide the inputs required by the​ industry? a. Demand conditions b. Factor conditions (basic factor c. Factors conditions (advanced factors) d. Related and supporting industries e. Firm strategy, structure, and rivalryd. Related and supporting industriesWhich of the following is the pattern of imports and exports that occurs in the absence of trade​ barriers?Free TradeFor which of the following political motives do governments intervene in trade in order to ban certain​ defense-related goods from export to other​ nations?Preserve national securityAccording to the infant industry​ argument, a​ country's emerging industries need protection from international competition during their development phase until they become sufficiently competitive internationally. Which of the following represents a major consequence to this​ argument?.Complacency toward innovationConsumers often end up paying more for products because of a lack of competition. Which of the following is a type of government intervention that leads to this​ problem?Protection of infant industriesAll of the following are political motives behind government intervention in trade EXCEPT​ ________.Pursuing strategic trade policyYou are a manager of a U.S. firm that plans on exporting a product that is designated as a dual use product and you need to have a U.S. government approval before export can take place. What is the political motive behind this​ intervention?To preserve national securityThe United States has banned all trade and investment with Cuba since 1962. This is an example of which type of government political​ intervention?Gaining influenceWhich of the following is considered government​ subsidy?Providing tax breaks and product price supportGovernments often promote exports by helping companies finance their export activities. Which U.S. financing entity finances the export activities of companies in the United States and offers insurance on foreign accounts​ receivable?Ex-Im BankWhich of the following is a restriction on the amount​ (measured in units or​ weight) of a good that can enter or leave a country during a certain period of​ time?QuotaOne of the most common instruments that government uses to promote trade with other nations is the establishment of a foreign trade zone. Which of the following is not an advantage of a free trade​ zone?Increase government revenue by applying additional import tariff.Governments of most nations have special agencies responsible for promoting exports. Which of the following is NOT a type of export​ promotion?Paying import dutiesExport tariff is levied mostly by the government of a country that is​ ________.exporting products that consist mostly of​ low-priced natural resources​A(n) ________ is levied as a percentage of the stated price of an imported product.ad valorem tariffA government may impose an import quota to protect its domestic producers by placing a limit on the amount of goods allowed to enter the country. Who are the winners of imposing such​ quotas?Domestic producersIn​ 1980, the closing of U.S.​ carmakers' production facilities in the United States was creating a volatile​ anti-Japan sentiment among the population and the U.S. Congress. Fearing punitive​ legislation, the Japanese government and its carmakers decide to limit its automobile exports to the United States. Which of the following is this an example​ of?Voluntary export restraint​ (VER)What method of trade restriction is the U.S. using with​ Cuba?EmbargoWhen a certain portion of the end product must consist of domestically produced goods or that a certain portion of the final cost of a product must come from domestic​ sources, this is the result of​ _________.local content requirementsWhich of the following describes administrative​ delays?Regulatory controls or bureaucratic rules designed to impair the flow of imports into a countryWhich of the following has eliminated all tariffs and nontariff trade barriers on goods originating within North​ America?NAFTATariffs that are called specific tariffs are levied based on​ ________.a specific fee for each unit​ (measured by​ number, weight,​ etc.) of an imported productWestern European plastic producers considered retaliating against Asian competitors whose prices were substantially lower in European markets than at home. Which of the following is this an example​ of?DumpingThe General Agreement on Trade in Services​ (GATS) created during the Uruguay Round identifies four different forms that international trade in services can take. Which of the following is NOT one of those​ forms?Agriculture subsidyThe creation of the​ ________ was perhaps the greatest achievement of the 1986 Uruguay Round.World Trade OrganizationWhich of the following is an additional tariff placed on an imported product that a nation believes is receiving an unfair​ subsidy?Countervailing dutyThe importance of trade for a nation can be measured by...examining the volume of its trade relative to its total output.The danger of trade dependency is that...political turmoil in a country might affect all dependent countriesThe purpose of ___ is to force companies from other nations to use local resources in their production...administrative delaysFree tradeimplies that the national government exerts minimal influence on trade proposes that national governments should directly help domestic firmsManagers should understand the effect of trade protectionism because it...may make it difficult for a company to buy what it needs from foreign supply_____ can occur when a firm sells its goods in a foreign market below what it charges in its home market....DumpingTariffs are taxes placed on goods imported into a country create a barrier to trade by increasing the cost of importTrueA foreign trade zone in primarily used by governments to....spur economic developmentExports and imports of tangible goods are included in the ________ account of a country's balance of payments.merchandiseThe balance of payments is useful to international business people for which of the following reasons?warning of new policies that could affect a country's business climateForeign direct investment is acquisition of foreign assets for the purpose of controlling them.TrueWhich stage of the international product life cycle does the innovating firm's country become a net importer of the product?standardized product stageThe requirement a sufficient portion of a product's content originate within a certain market to escape tariff chargesmarket imperfectionAccording to the market theory, competition is a common market imperfection.FalseRegional economic integration is also referred to asregionalismIndustries considered essential to national security often receive government-sponsored protection.TrueHigher levels of trade between nations result ingreater purchasing powerALADI refers to theLatin American Integration AssociationThe main purposed of the ______ is to debate and amend legislation proposed by the European Commission of the EU.European ParliamentIn this members eliminate internal barriers, adopt an external policy toward nonmembers, and eliminate barriers.common marketEconomic integration whereby countries remove all barriers to trade among themselves and restrictions for nonmembersfree trade area... encourages free trade among Canada, Mexico, and the US.NAFTAMercantilist countries used to amass wealth by acquiring less-developed territories around the world.TrueThe theory of absolute advantage measures a nation's wealth by the standard of living of its people.TrueThe theories of comparative advantage and absolute advantage assume that countries are driven only by the max productionTrue