Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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A tax that a government places on certain imported products is called
a(n)
a. | embargo. | b. | divestiture. | c. | tariff. | d. | quota. |
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2.
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The difference between a country’s total exports and total imports is
called the
a. | foreign debt. | b. | trade deficit. | c. | balance of
trade. | d. | trade surplus. |
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3.
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Goods and services sold to other countries are called
a. | imports. | b. | exports. | c. | contraband. | d. | tariffs. |
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4.
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The key effects on a country’s level of economic development are
a. | government system, political stability, and trade barriers. | b. | location, climate,
and natural resources. | c. | literacy level, technology, and agricultural
dependency. | d. | religion, traditions, and customs. |
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5.
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The value of one currency in one country compared with the value of currency in
another country is called:
a. | balance of trade. | b. | balance of payments. | c. | interest
rate. | d. | exchange rate. |
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6.
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Which of the following is NOT a cultural/social factor that affects
international business?
a. | religion | b. | climate | c. | language | d. | values |
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7.
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Common market members
a. | impose high tariffs on one another’s products. | b. | prohibit one
another’s workers from moving freely across borders. | c. | produce and sell
exactly the same products. | d. | have a common external duty on products being
imported from nonmember countries. |
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8.
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What is a free-trade zone?
a. | A specific point in the growth of a country’s economy where trade with other
nations becomes economically advantageous. | b. | A specific point in a product’s life
cycle at which the government allows the manufacturer to freely sell the product in the global
marketplace. | c. | A selected area where products can be imported duty-free and then stored, assembled,
or used in manufacturing. | d. | A selected area where importers and exporters
can trade or exchange products without money changing hands. |
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9.
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The making, buying, and selling of goods and services within a country is
called
a. | world trade. | b. | domestic business. | c. | importing. | d. | international
business. |
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10.
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A limit that a government places on the quantity of a product that may be
exported or imported during a given period is called a:
a. | trade surplus. | b. | quota. | c. | tariff. | d. | luxury tax. |
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11.
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The North American Free Trade Agreement is composed of the following three
countries:
a. | United States, Canada, and Jamaica. | b. | Mexico, United States, and
Japan. | c. | Canada, Europe, and Mexico. | d. | Canada, Mexico, and the United States.
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12.
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An agreement between two or more companies to work together on a business
project is called a (n):
a. | joint venture. | b. | common venture. | c. | amicable
agreement. | d. | common market. |
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13.
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The difference between the amount of money that comes into a country and the
amount that goes out of it is called the
a. | balance of trade. | b. | foreign debt. | c. | balance of
payments. | d. | all of the above are correct. |
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14.
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Which of the following scenarios is likely to cause the value of a
country’s currency to rise?
a. | increased demand for the nation’s products and currency | b. | higher interest
rates | c. | sudden change in government | d. | prolonged
inflation |
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Matching
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a. | trade surplus | e. | comparative advantage | b. | interest
| f. | foreign
debt | c. | absolute advantage | g. | trade deficit | d. | trade barrier | h. | imports |
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15.
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This occurs when a country exports more than it imports.
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16.
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The amount that a country owes to other countries.
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17.
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This occurs when a country imports more than it exports.
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18.
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The cost of using someone else’s money.
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19.
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Items bought from other countries.
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20.
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The situation when a country can produce a particular good or service at a
lower cost than other countries.
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21.
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A restriction on free trade.
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22.
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The situation in which a country specializes in the production of a good or
service at which it is relatively more efficient.
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True/False
Indicate whether the
sentence or statement is true or false.
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23.
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A country’s infrastructure refers to its climate and natural
resources.
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24.
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A country can have an absolute advantage in only one area.
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25.
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When a country has a favorable balance of payments, the value of its currency is
usually constant or rising.
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26.
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An informal trade barrier is created by government actions.
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27.
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Countries that devote most of their economies to agriculture usually provide
more and better goods and services for their citizens.
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28.
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Tariffs on certain goods are used to restrict free trade.
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29.
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Without foreign trade, all of the items you buy would cost less, because they
would not need to be shipped here from other lands.
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30.
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A country that wishes to enhance international trade activities would most
likely use common market.
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