Chapter 3: Business in the Global Economy

Question 1

Domestic business refers to business activities needed for creating, shipping, and selling goods across national borders

Accepted Answer

False

Question 2

An agreement between two or more companies to share a business project is called

Accepted Answer

a joint-venture

Question 3

A limit that a government places on certain imported products.

Accepted Answer

quota

Question 4

An economy that is mostly agriculture is generally unable to provide its citizens w/ a large # of high-quality products

Accepted Answer

True

Question 5

Multinational companies sometimes control a country’s political power.

Accepted Answer

True

Question 6

If a country exports more than it imports, it has a trade surplus

Accepted Answer

True

Question 7

Without foreign trade, many things you buy would cost more or not be available.

Accepted Answer

True

Question 8

Exists when a country can produce a good or service at a lower cost than other countries.

Accepted Answer

absolute advantage

Question 9

The value of currency in one country compared with the value in another is called the interest rate.

Accepted Answer

False

Question 10

Occurs when a country sells more than it buys.

Accepted Answer

trade surplus

Question 11

Franchising is selling the right to use a trademark or brand name for a fee or royalty

Accepted Answer

False

Question 12

One goal of the World Trade Organization is to eliminate import quotas.

Accepted Answer

True

Question 13

Exists when a country specializes in the production of a good or service at which it is relatively more efficient.

Accepted Answer

comparative advantage

Question 14

Occurs when a country buys more than it sells

Accepted Answer

trade defecit

Question 15

This group helps maintain an orderly system of world exchange rates.

Accepted Answer

International Monetary Fund

Question 16

Difference between the amount of money that comes into a country and the amount that goes out of it is called balance of

Accepted Answer

payments

Question 17

Which of the following situations represents an absolute advantage?

Accepted Answer

Honduras in banana production

Question 18

In a free-trade zone, member countries agree to remove duties and trade barriers on products traded among them.

Accepted Answer

False

Question 19

The difference between a country’s total exports and total imports is called balance of

Accepted Answer

trade

Question 20

Infrastructure refers to a country’s

Accepted Answer

transportation, communication, and utility systems

Question 21

A(n) ___ company is an organization that does business in several countries.

Accepted Answer

multinational

Question 22

Which of the following is an example of a global strategy?

Accepted Answer

Coca-Cola is the same no matter where in the world it is sold

Question 23

The amount a country owes to other countries is called

Accepted Answer

foreign debt

Question 24

Items bought from other countries.

Accepted Answer

imports

Question 25

The 3 main factors that affect exchange rates among countries are the balance of payments, economic conditions, and

Accepted Answer

political stability

Question 26

The 3 effects on a country’s level of economic development are literacy level, technology, and agricultural dependency.

Accepted Answer

True

Question 27

Which of the following would likely cause the value of the dollar to RISE?

Accepted Answer

lower U.S. inflation

Question 28

The cost of using someone else’s money.

Accepted Answer

interest rate

Question 29

A tax that a government places on certain imported products.

Accepted Answer

tariff

Question 30

A country’s culture, traditions, and religion can sometimes act as informal trade barriers.

Accepted Answer

True

Question 31

Which of the following tends to discourage international trade?

Accepted Answer

an embargo

Question 32

Completely prohibiting the import or export of a product.

Accepted Answer

embargo

Question 33

Completely prohibiting the import or export of a product.

Accepted Answer

embargo

Question 34

Which of the following products is NOT imported to the United States in any great quantity?

Accepted Answer

milk

Question 35

Dan’s company is expanding into Korea and has asked her to research the customs and values. What is she investigating?

Accepted Answer

cultural influences

Chapter 3: Business in the Global Economy

Questions 35

Chapter 3: Business in the Global Economy

Questions 35