Intro to Business Ch3

1. What is true of the BRIC countries?

• India has had a huge boom of cell phone users.

• China’s low wage jobs are growing.

• China is the only BRIC country with a larger economy than the US.

• Brazil is the only BRIC country with a high employment rate.

If a guitar manufacturer wants to import high-quality wood from a country in Africa, what would influence their decision to import?

• Establishment of new industries

• Reduced Risk

• Access to factors of production

• Inflow of innovation

Which of the following statements is true of international trade?

• It offers companies an invaluable source of new ideas.

• It increases the economic risk for multinational companies.

• It increases a firm’s dependence on its domestic economy.

• It reduces a firm’s opportunity to tap into growing new markets.

What is an example of an opportunity cost?

• A Europe country that produces more cotton than a North American country

• A country producing electronic goods on a large scale without slowing down other productions

• A country that increase production of sugar by decreasing production of cocoa

• A country that expands its trade relations to neighboring countries.

1. When the industries in a country tend to produce products that have the lowest opportunity cost, the country most likely has a _________.

• Positive Balance

• Trade Surplus

• Comparative Advantage

• Balance of Payments Surplus

When the total value of a nation’s exports are higher than the total value of imports, that country has a(n)___________.

• Trade deficit

• Absolute Advantage

• Comparative Advantage

• Trade Surplus

A country that exports cheese and imports potatoes, the value of potatoes is lower than the value of cheese, the country most likely has a __________.

• Trade Deficit

• Balance of payments surplus

• Balance of payments deficit

• Trade Surplus

In global trade, a balance of payments deficit means that:

• More money flows in than out

• Foreign payments and receipts are excluded from calculating the balance of payments

• Foreign borrowing and lending are excluded from calculating the balance of payments

• More money flows out than in

What is considered to be the most basic form of global trade?

• Direct Investing

• Importing

• Exporting

• International Franchising

If it is easier for Europeans to travel to America and for America to export products to Europe, which of the following is true?

• The American dollar is weak

• The Euro is strong

• The Euro is weak

• American Dollar is weak and Euro is strong