QUIZ Grade 11 Business - International Economics

Globalisation is best defined as

• increased international trade as a result of free movement of goods and capital between countries

• a situation where all of the world uses the same common currency

• the growing trend for companies to stop making products within their own country

• the increase in the world tourist industry leading to more global travel

One possible disadvantage to businesses of globalisation is that:

• all products will become more expensive

• there will be more international competition

• there will be less choice and variety for their consumers

• they will tend to produce on a small scale and this will raise costs

One possible opportunity for a business as a consequence of globalisation is:

• able to sell products successfully in all foreign markets without changing the products

• able to increase prices as there will be less competition

• more likely to be able to create a monopoly

• able to buy a wider range of imported materials and products

Free international trade’ means that:

• goods can be transported between countries free of charge for ever

• all countries use the same currency so it does not cost anything to convert currencies

• there are no tariffs or quotas to limit trade between countries

• businesses can produce in any country without any legal controls

The most likely reason why some governments impose tariffs on imported goods is:

• to reduce the rate of inflation

• to increase employment in foreign countries

• to reduce the Balance of Payments

• to increase output in their own countries

The difference between import tariffs and quotas is:

• tariffs are a tax on locally produced goods but quotas limit the quantity of imports

• tariffs are a tax on imports and quotas are a tax on exports

• tariffs are a tax on imports and quotas limit the quantity of imports

• tariffs are a tax on all products but quotas just limit the quantity of imports

A definition of a multinational business is one that:

• has a foreign sounding name

• imports goods from one country and exports them to another one

• exports goods to many different countries

• has factories or operations in more than one country

One advantage to the business of becoming a multinational is that:

• it will be able to produce goods closer to each country’s market

• it will have fewer factories and operating bases

• communication will be easier within the business

• it will tend to produce the same basic product for markets throughout the world

A manufacturing firm based in country C buys in raw materials from country A and sells the finished goods to country B. The firm could gain if country C’s currency:

• depreciated against both other currencies

• depreciated against currency A but appreciated against currency B

• appreciated against currency A but depreciated against currency B

• appreciated against both currencies

When an exchange rate of a currency depreciates, the following will be likely to happen:

• import prices will fall and export prices will rise

• export sales will fall and import purchases will increase

• export prices will fall and import prices will rise

• prices of all products will not change