Chapter 3: Pre Test

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

• True

• False

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

• True

• False

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

• True

• False

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

• True

• False

An economy that is largely involved in agriculture is generally unable to provide its citizens with a large number of high-quality products.

• True

• False

Which of the following situations represents an absolute advantage?

• Saudi Arabia in fresh fish production

• Honduras in banana production

• Canada in rice production

• Norway in orange and grapefruit production

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

• milk

• oil

• coffee

• silk

The amount a country owes to other countries is called

• national debt

• foreign debt

• trade deficit

• balance of payments.

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

• an increased U.S. trade deficit

• higher U.S. interest rates

• lower U.S. inflation

• Saudi Arabia doubles the price of the oil it sells the United States.

Danielle’s company is expanding into Korea and has asked her to research the language, customs, and values of the Korean people. Which aspect of the international business environment is Danielle investigating?

• geography

• economic development

• political and legal concerns

• cultural influences