BC2 - Chapter 3- Test Review

1. International business involves the buying, selling, and trading of goods and services across national boundaries.

• True
• False

2. Nations trade with other nations to obtain resources that would otherwise be unavailable to them.

• True
• False

4. When a nation imports more than it exports, it has a positive balance of trade.

• True
• False

7. A common reason for establishing quotas or tariffs is to encourage dumping.

• True
• False

8. Political unrest in countries often creates a hostile environment for foreign businesses and can act as a barrier to international trade.

• True
• False

15. Only large businesses get involved in exporting.

• True
• False

16. Licensing allows a company to enter the international marketplace without spending large amounts of money abroad.

• True
• False

17. A strategic alliance is a partnership formed to create competitive advantage on a worldwide basis.

• True
• False

21. A global strategy involves standardizing products for the whole world.

• True
• False

23. A(n) _____ exists when a country is the most efficient producer of an item.

• comparative advantage
• comparative disadvantage
• absolute advantage
• absolute disadvantage
• domestic advantage