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WorksheetsCHAPTER 3 TEST : Business in the Global Economy
Total questions: 48
Worksheet time: 40mins
Today it is difficult to define economies in terms of national borders.
True
False
A country can have an absolute advantage in only one area.
True
False
Without foreign trade, all of the items you buy would cost less, because they would not need to be shipped here from other lands.
True
False
A nation with a trade surplus is said to have a favorable trade position.
True
False
It is possible for the United States to have a trade surplus with one country and a trade deficit with another.
True
False
Some countries limit the amount of money their citizens can take out of the country when they travel.
True
False
Because of international trade, all nations of the world use the same banking system.
True
False
When a country has a favorable balance of payments, the value of its currency is usually constant or rising.
True
False
Countries that devote most of their economies to agriculture usually provide more and better goods and services for their citizens.
True
False
A joint venture is an agreement among two or more countries to remove duties and trade barriers on products traded among them.
True
False
The making, buying, and selling of goods and services within a country is called
domestic business.
world trade.
importing.
international business.
The United States conducts trade with more than ____________________ countries.
10
100
50
180
Which of the following counties has an absolute advantage in coffee production?
Saudi Arabia
Ireland
the United States
Brazil
Goods and services sold to other countries are called
exports.
tariffs.
contraband.
imports.
A society's culture has a strong influence on business activities. Which of these is an example of a cultural influence?
natural resources
inflation
religion
climate
The difference between a country’s total exports and total imports is called the
balance of trade.
trade deficit.
foreign debt.
trade surplus.
The difference between the amount of money that comes into a country and the amount that goes out is called the
balance of payments.
balance of trade.
foreign debt.
all of the above are true.
Suppose you want to make a currency exchange for 50 British pounds. You must exchange $87.50 U.S. dollars to get the 50 pounds. What is the value of 1 pound in relation to the U.S. dollar?
$1.75
$2.00
$1.50
$2.25
Which of the following scenarios is likely to cause the value of a country’s currency to rise?
higher interest rates
prolonged inflation
sudden change in government
increased demand for the nation’s products and currency
Which of the following is NOT a cultural/social factor that affects international business?
language
climate
religion
values
The key factors that affect a country’s level of economic development are
religion, traditions, and customs.
location, climate, and natural resources.
literacy level, technology, and agricultural dependency.
government system, political stability, and trade barriers.
A tax that a government places on certain imported products is called a(n)
tariff.
embargo.
quota.
divestiture.
A limit that a government places on the quantity of a product that may be exported or imported during a given period is called a
tariff.
quota.
luxury tax.
trade surplus.
What is a free-trade zone?
A selected area where importers and exporters can trade or exchange products without money changing hands.
A specific point in the growth of a country’s economy where trade with other nations becomes economically advantageous.
A specific point in a product’s life cycle at which the government allows the manufacturer to freely sell the product in the global marketplace.
A selected area where products can be imported duty-free and then stored, assembled, or used in manufacturing.
Common market members
produce and sell exactly the same products.
have a common external duty on products being imported from nonmember countries.
impose high tariffs on one another’s products.
prohibit one another’s workers from moving freely across borders.
A country in which a multinational company conducts business activities is called the
free-trade zone.
economic community.
host country.
home country.
Selling the right to use some intangible property for a fee or royalty is called
licensing.
a joint venture.
franchising.
a free-trade agreement.
Which of the following is NOT a goal of the World Trade Organization?
helping poor countries with economic growth
strengthening import quotas
enforcing free-trade agreements between members
lowering tariffs
Licensing
is generally a very risky way for a company to expand into other countries.
usually involves selling a product or service.
has a low financial investment, so the potential financial return is often low.
all of the above are true.
This international trade organization was created in 1944 to provide loans for rebuilding after World War II.
North Atlantic Treaty Organization
World Bank
International Monetary Fund
European Union
International business is frequently referred to as world or (a) .
The situation in which a country specializes in the production of a good or service at which it is relatively more efficient is called (a) advantage.
Items bought from other countries are called (a) .
Foreign (a) is the amount a country owes to other countries.
If a nation imports more than it exports, it has a trade (a) .
A negative or (a) balance of payments occurs when a country sends out more money than it brings in.
The (a) rate is the value of a currency in one country compared with the value in another.
(a) rates are the cost of using someone else’s money.
The accepted behaviors, customs, and values of a society are referred to as (a) .
A nation’s transportation, communication, and utility systems is referred to as its (a) .
A trade (a) is a restriction to free trade.
When a government completely stops the import or export of a product, it is called a(n) (a) .
A(n) (a) company is an organization that does business in several countries.
A(n) (a) is the right to use a company name or business process in a specific way.
What is absolute advantage? What are the typical reasons why a country might have an absolute advantage for a certain good or service?
In addition to exporting and importing goods and services, other forms of exchange take place among nations. Provide at least two examples.
What are the three main factors that affect currency exchange rates among countries?
Briefly explain the difference between a global strategy and a multinational strategy.
