WorksheetsLecture 3: Global Marketplace
Total questions: 20
Worksheet time: 15mins
A country notices it is importing more than it exports over the last year. Based on the measures of trade, what condition does this indicate, and why is it considered unfavorable?
Trade surplus, because exports are lower than imports
Trade deficit, because imports exceed exports
Balance of payments surplus, because payments received are higher
Balanced trade, because imports and exports offset each other
Which of the following is NOT listed as a reason why nations trade?
Pursuing economies of scale
Keeping up with customers
Eliminating all competition domestically
Acquiring materials, goods, and services
Which statement best defines an exchange rate in international trade?
The price level of goods within a country
The rate at which the money of one country is traded for the money of another
The interest rate set by a nation’s central bank
The tax charged on imported services
Tariffs are defined as:
Quotas that limit export quantities
Taxes levied on imports
Subsidies to domestic producers
Fees charged for currency exchange
Which government action is most consistent with protectionism?
Reducing all barriers to international trade
Imposing import quotas to shield domestic industries
Allowing foreign firms to sell at any price they choose
Eliminating export subsidies
NAFTA was primarily designed to do which of the following among its members?
Create a political union
Eliminate or reduce tariffs and other trade barriers
Standardize tax rates
Set a common external currency
Asia-Pacific Economic Cooperation (APEC) is best described as which type of arrangement?
A transatlantic military alliance
A forum of Asia-Pacific economies promoting trade and economic cooperation
A European monetary union
A South American customs union
Which of the following countries is a member economy commonly associated with APEC?
Japan
Germany
Italy
South Africa
Which statement best contrasts NAFTA and APEC?
NAFTA is a legally binding free trade agreement among three North American nations, whereas APEC is a cooperative forum across the Asia-Pacific with broader membership and looser commitments.
NAFTA is a cultural exchange program, whereas APEC is a military alliance.
NAFTA covers only services, whereas APEC covers only goods.
NAFTA uses a common currency, whereas APEC requires currency pegs.
Which country is a member of NAFTA but not of the EU or APEC?
Canada
France
Japan
Spain
Which action would qualify as FDI in the United States?
A U.S. retailer buys shoes from Vietnam.
A Canadian company purchases a U.S. factory.
A U.S. company licenses its logo to a firm in Spain.
A Mexican distributor resells American phones locally.
A firm grants a foreign manufacturer the right to produce and market its product in exchange for a fee. What is this an example of?
Exporting
Licensing
FDI
Importing
Which of the following is NOT required for a licensing arrangement as defined here?
Agreement to produce and market another company’s product
Payment of a royalty or fee
Ownership of the foreign producer by the licensor
Permission to use another company’s product
A firm wants access to a foreign market using its technology but prefers not to own foreign operations. Which form aligns with this preference?
Licensing
FDI
Importing
Exporting
In a global strategy, where are major decisions primarily made?
At regional offices
By each country's local managers
At headquarters in the home country
By external consultants
Which strategy is MOST associated with uniformity across world markets?
Multidomestic
Global
Transnational
Local niche
Which strategic approach is described as a hybrid?
Export-led growth
Global strategy
Transnational strategy
Multidomestic strategy
A firm using a global strategy is MOST likely to do which of the following?
Customize every product for each country
Allow each subsidiary to set its own corporate strategy
Apply a single approach as uniformly as possible worldwide
Operate only through export agents
If a firm wants quick adaptation to local tastes but accepts coordination challenges, which strategy should it adopt?
Global
Multidomestic
Transnational
None; remain domestic
Which checklist item would help decide if a product line should change ingredients for Country A in the diagram?
Political patterns
Social customs: clothing and food preferences
Economic institutions
Legal differences unrelated to products
