Global Markets

________ is the selling of products to another country

• A) In-trading

• B) Exporting

• C) Importing

• D) Dumping

The largest importer in the global market today is

• Japan.

• Russia

• Germany

• the United States

181) A nation has a ________ in the production of a good or service if it can produce that good or service more effectively or efficiently than it can produce other goods.

• A) supreme advantage

• B) primary efficiency

• C) qualified advantage

• D) comparative advantage

182) ________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries.

• A) Comparative advantage

• B) Absolute advantage

• C) Complete advantage

• D) Dumping advantage

The theory of comparative advantage exists because

• A) there are too many products and services to choose from today.

• B) customers are always comparing the quality of service from companies in the same industry.

• C) no nation can produce all the products its people want and need.

• D) free-trade agreements became the trend during the past 15 years.

One advantage of free trade is

• A) jobs are shifted to low-wage global markets.

• B) service jobs are moved overseas.

• C) advanced production operations are built in low-wage countries.

• D) innovation for new products occurs which keeps firms competitively challenged.

The concept of free trade means

• A) buyers and sellers contract with each other and offer some goods at no cost.

• B) goods and services can be traded freely across borders without political and/or economic barriers.

• C) there is no exchange of currency for these products.

• D) there is no exchange of currency, but the trading partners determine the value of the product and perform a bartering process

Why does it make sense to trade with other nations?

• A) After producing all the product and service its people want and need, a nation can sell the excess products to the world.

• B) Some nations have lots of natural resources and technological know-how. They have an ethical obligation to offer the rest to other nations.

• C) Other nations need foreign currency.

• D) A nation will produce what it can produce most efficiently and effectively and buy from other nations what they can produce most efficiently and effectively.

Free trade between nations generally results in

• A) industrialized nations gaining at the expense of developing nations.

• B) an increase of jobs in developed nations.

• C) mutually beneficial exchange relationships.

• D) higher prices for imported goods.

________ is buying products from another country.

• A) Importing

• B) Outsourcing

• C) Retailing

• D) Exporting