ARBUS 101 - Module 1

A major concern voice by Canadian critics of NAFTA is that it would result in

• Increases illegal immigration from Mexico
• Higher prices for consumer goods
• Loss of jobs in the Canadian economy
• National security problems

Many economists and business experts contend that _____ will likely be the growth market of the future.

• The Middle East
• South America
• Africa
• Asia

One reason why Canada and the United States trade so much is:

• NAFTA requires that member countries trade with each other wherever possible before working with other countries
• Each country understands the culture and needs of the other
• Standard shipping rates between the two countries
• A common currency

The fee paid to a firm in a licensing agreement that gives another firm the right to manufacture their product or use its trademark is called:

• A trading bloc.
• A cartel. 
• A royalty.
• An outsource agreement. 

An unfavourable balance of trade occurs when the value of:

• Exports exceed the value of imports
• Cash inflows are equal to the value of cash outflows
• Imports equals the value of exports
• Imports exceeds the value of exports

A Mexican firm has agreed to trade petroleum to an American importer in return for Canadian made computers. This arrangement is an example of

• A non-tariff trade
• Arbitrage
• A credit arrangement
• Countertrading

Pepsi has entered into a long-term contract with a South African beverage business. The contract calls for the South African firm to produce and market Pepsi in South Africa. Pepsi will receive a royalty on each case of soda sold. This is an example of:

• Licensing
• A foreign subsidiary
• A joint venture
• Foreign direct investment

Japanese automobile producers sold more of their production overseas than they sold in Japan. Their business strategy is:

• Dumping
• Importing
• Licensing
• Exporting

Companies such as McDonald’s, Pizza Hut, and KFC, have entered the global market by offering investors the opportunity to set up:

• Multinational subsidiaries
• Joint ventures
• Franchises
• Producer cartels

U.S. firms that produce sophisticated military hardware are prohibited from exporting that equipment to unfriendly governments, such as Iran. The complete ban on exporting sensitive technology to specific countries is an example of a(n):

• Embargo
• Importa quota
• Tariff
• Boycott