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WorksheetsGlobal Businesses Quiz
Total questions: 47
Worksheet time: 24mins
What are global businesses?
Businesses that operate only locally
Businesses that operate internationally
Businesses that do not trade goods and services
Businesses that only sell products online
What do global businesses do?
Conduct trade only within their country
Import and export goods and services
Avoid international trade
Focus only on local markets
Which of the following is a characteristic of global businesses?
They operate only in one city
They conduct trade across the world
They avoid importing goods
They focus only on domestic services
What is specialization in business?
When a business creates a variety of products for local use.
When a business creates the efficient production of a specific product, typically shipped abroad to countries which do not produce the product.
When a business focuses on importing products from other countries.
When a business avoids producing products and focuses on services only.
Why do businesses ship specialized products abroad?
To avoid competition in the local market.
To reach countries that do not produce the product.
To increase the cost of production.
To reduce the quality of the product.
What are some benefits of specialization?
Increased worker productivity, reduced loss of time, and improved workers' skills.
Increased worker stress, reduced efficiency, and decreased skills.
Increased costs, reduced teamwork, and decreased productivity.
Increased workload, reduced focus, and decreased morale.
What is the definition of comparative advantage?
When a company sells goods and services at a higher price than its competitors and gains larger profits.
When a company sells goods and services at a lower price than its competitors and still gains larger profits.
When a company produces fewer goods but charges higher prices to gain profits.
When a company focuses on producing only one type of product to reduce costs.
Which of the following is an example of comparative advantage?
A company producing fewer goods to reduce costs.
A Chinese shoe company selling shoes at a lower price than American shoe companies and gaining larger profits.
An American shoe company selling shoes at a higher price than Chinese shoe companies.
A company focusing on producing only luxury goods to increase profits.
What is a key characteristic of portfolio investment?
It gives the investor full control of the company.
It involves buying all the shares of a company.
It allows the investor to own a stake without direct control.
It requires the investor to manage the company’s operations.
What is direct investment?
The purchase of the majority of a company or foreign business other than purchasing a company's shares.
Buying shares of a company to gain ownership.
Investing in a company's stock market.
Selling a company's assets to foreign businesses.
What is direct investment?
When an investor buys a product from a company.
When an investor acquires a company through investment and takes on an active part in the company.
When an investor lends money to a company without any involvement.
When an investor donates money to a company.
In the example provided, how much of the shares does the American partner own in the Mexican business?
25%
48%
50%
75%
What is foreign exchange?
The exchange of goods between countries
The exchange of one currency for another or the conversion of one currency into another
The process of trading stocks internationally
The act of traveling to foreign countries
If $10 USD is equal to ¥62.08, which currency is being referred to?
Chinese Yuan
Mexican Pesos
European Euros
Indian Rupees
How much is $10 USD equal to in Mexican Pesos?
¥62.08
€9.42
$151.69
$200.00
Which website can you visit to convert currencies or see up-to-date exchange rates?
www.currencyexchange.com
www.money.cnn.com/data/currencies/
www.foreignmoney.com
www.globalrates.com
If $10 USD is equal to €9.42, which currency is being referred to?
Chinese Yuan
Mexican Pesos
European Euros
Japanese Yen
Which of the following is NOT a factor influencing exchange rates?
Inflation
Interest rate
Terms of trade
Weather conditions
How does political stability affect exchange rates?
It has no effect on exchange rates.
Political stability increases the worth of currency.
Political instability decreases the worth of currency.
Both B and C are correct.
What is one of the economic factors that can change the worth of a currency?
Public debt
Active war
Weather patterns
Population growth
Which term refers to the balance between imports and exports that influences exchange rates?
Inflation
Terms of trade
Deficits
Interest rate
What happens to the exchange rate during active war?
It remains stable.
It increases significantly.
It decreases due to political instability.
It is unaffected by war.
What is inflation?
The rate at which the level of prices for goods and services are rising and purchasing is falling
The rate at which the level of prices for goods and services are falling and purchasing is rising
The rate at which the economy grows without any change in prices
The rate at which the currency value remains constant
When is inflation considered low?
When the economy shows rising currency value
When the economy shows decreasing currency value
When the economy shows no change in currency value
When the economy shows fluctuating currency value
When is inflation considered high?
When the economy shows decreasing currency value
When the economy shows rising currency value
When the economy shows no change in currency value
When the economy shows fluctuating currency value
What is the interest rate?
The amount charged by a lender to a borrower for the use of their money.
The amount of money a borrower gives to a lender as a gift.
The amount of money a bank pays to customers for opening an account.
The amount charged by a borrower to a lender for borrowing money.
What happens to the exchange rate when the interest rate is increased?
The exchange rate rises.
The exchange rate declines.
The exchange rate remains the same.
The exchange rate disappears.
What causes the exchange rate to decline?
Higher inflation in a country compared to others.
Lower inflation in a country compared to others.
Increased interest rates.
Decreased interest rates.
What does a deficit indicate about a country's foreign trade?
The country is earning more than it is spending on foreign trade.
The country is spending more than it is earning on foreign trade.
The country has balanced foreign trade.
The country is not involved in foreign trade.
How can deficits become larger?
By reducing foreign trade.
By borrowing more from other foreign sources to substitute the lost money.
By increasing exports.
By earning more than spending.
What is public debt?
Debt owed by individuals
Debt owed by a government
Debt owed by private companies
Debt owed by foreign businesses
How does public debt affect foreign businesses?
It creates a more appealing market for investment
It creates a less appealing market for investment
It has no impact on foreign businesses
It encourages foreign businesses to invest more
What do "Terms of Trade" refer to?
The balance between export prices and import prices
The rules for international trade agreements
The number of goods exported by a country
The taxes imposed on imported goods
What happens when export prices are high and import prices are low?
It shows a great demand for importing goods and decreases the value of the country's currency
It shows a great demand for exporting goods and increases the value of the country's currency
It shows a decrease in demand for exporting goods and increases the value of the country's currency
It shows a decrease in demand for importing goods and decreases the value of the country's currency
What is the impact when export prices are low and import prices are high?
It shows a greater demand for exporting goods and increases the value of the country's currency
It shows a greater demand for importing goods and decreases the value of the country's currency
It shows a decrease in demand for importing goods and increases the value of the country's currency
It shows a decrease in demand for exporting goods and decreases the value of the country's currency
What does political stability encourage investors to do?
Support countries with strong economic performance.
Avoid countries with strong economic performance.
Invest in countries experiencing turmoil.
Ignore economic performance when investing.
Why are investors less likely to invest in countries experiencing turmoil?
Turmoil increases the value of their currency.
Turmoil depletes the value of their currency.
Turmoil has no effect on their currency.
Turmoil makes their currency more attractive to investors.
What is a key characteristic of a country that attracts investors?
Strong economic performance.
Frequent political turmoil.
Weak economic performance.
Unstable government policies.
What is economic integration?
When countries agree to increase trade barriers and restrict monetary policies.
When countries agree to reduce or eliminate trade barriers and coordinate monetary and fiscal policies.
When countries stop trading with each other completely.
When countries focus only on domestic trade and ignore international trade.
What is one benefit of economic integration?
It increases costs for both consumers and producers.
It reduces trade between agreeing countries.
It reduces costs for both consumers and producers while increasing trade between agreeing countries.
It eliminates trade completely between countries.
Which of the following is NOT a level of economic integration?
Free trade
Custom union
Common market
Industrial union
What is the highest level of economic integration mentioned in the image?
Free trade
Political union
Economic union
Custom union
Which country is NOT part of the ASEAN Economic Community as shown in the image?
Thailand
Myanmar
India
Indonesia
What does "common market" refer to in the context of economic integration?
A market where only local goods are sold
A market where goods, services, and labor move freely across member countries
A market restricted to trade within one country
A market focused on political agreements only
What is free trade?
Trade between countries with high tariffs.
Trade between member countries with eliminated or reduced tariffs.
Trade that only involves agricultural products.
Trade that requires no agreements between countries.
What was one result of the 2014 agreement between Australia and Japan?
Australia stopped exporting beef to Japan.
Japan increased tariffs on Australian beef.
Australia exported beef to Japan with lower tariffs and imported electronics at lower prices.
Japan stopped importing electronics from Australia.
What is an example of free trade mentioned in the text?
Australia exporting beef to Japan with higher tariffs.
Japan importing electronics from Australia at higher prices.
Australia exporting beef to Japan with lower tariffs and importing electronics at lower prices.
Japan exporting electronics to Australia with higher tariffs.
