Chapter 3 Business Essentials Review

Which of the following would be an example of international business?

• A farmer in Kansas using equipment made in Ohio

• A restaurant in Kansas City serving Italian food

• A sales staff in Texas representing a foreign producer

• A retail store in New York selling craft items from local artists

Which of the following would be an example(s) of domestic business?

• A farmer in Kansas using equipment made in Ohio

• A retail store in Kansas City that sells products made in India

• A sales staff in Texas representing a foreign producer

• A retail store in New York selling craft items from local artists

When a country's imports exceed its exports, there is a trade

• surplus

• balance

• deficit

• exchange

When a country's exports exceed its imports, there is a trade

• surplus

• balance

• deficit

• exchange

Select all that apply.

The value of a country's currency is likely to decline as a result of

• higher inflation

• higher interest rates

• a trade surplus

• a favorable balance of payments

Infrastructure is a significant factor that affects the economic development of a country.

• True

• False

Religion is an element of the ____ component of the international business environment.

• geographic

• economic

• cultural

• political

The primary effects of a country's level of economic development are its literacy level, agricultural dependency, and

• political stability

• customs

• religion

• technology

Making, buying, and selling goods and services within a country is referred to as _____?

• international business

• domestic business

• free trade

• common market

When a country can produce a particular good or service at a lower cost than other countries, a(n) __________ exists.

• comparative advantage

• exchange rate

• absolute advantage

• common market