Global :: Chapter 6 Review

An organization that bonds countries together to allow a free flow of products is called

• An economic community
• a monopoly
• an industry
• a balance of trade agreement

The first step in the exporting process is

• Meet the needs of customers
• find potential customers
• agree on sales terms
• deliver the products/services

A U.S. company exported kitchen appliances to Italy without changing the appliances.  Italians did not buy the appliances because they would not work with the way Italian electrical current is supplied to households.  The step in the exporting process the exporter did not properly complete is

• agree on sales terms
• provide products or services
• meet the needs of customers
• complete the transaction

Two reasons why importing is important are because

• customers want the product and it is cheaper from another country
• your country has competitive advantage and home-country products are more expensive
• availability of parts for manufacturing and customs duties
• none of these

A common characteristic of monopolistic competition is

• one seller controlling a market
• many sellers with slightly different products
• identical products for each company in the market
• none of these

Which is not an exporting process?

• indirect exporting
• direct barter
• direct exporting
• none of these

The major factors that affect the degree of competition are

• # of companies, amount of advertising, and # of factories
• # of companies, size of companies, and type of product
• # of companies, business costs, and product differences
• none of these

A country with exports of $6 million and imports of $10 has a

• trade surplus
• trade deficit
• favorable balance of payments
• unfavorable balance of payments

Of the following business transactions, the only one that describes an importing activity is

• a wholesaler in Brazil packs goods for shipment to Liberia.
• a retailer in Sweden receives goods from Mexico to sell in a chain of stores.
• a restaurant food supplier in Japan ships sushi ingredients to a restaurant in Turkey.
• none of these

The exchange of products or services between companies in different countries with the possibility of some currency exchange is called

• direct barter
• balance of payments
• direct trade
• countertrade