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WorksheetsDC_ITB_CH3
Total questions: 43
Worksheet time: 22mins
What is the exchange rate in international trade?
The number of units allowed to be imported
The law limiting currency leaving a country
The ratio at which one currency is exchanged
The tax charged on imported goods
Which statement best describes an import tariff?
A limit on total currency traded
A standard for product measurements
A legal ban on a specific good
A tax levied on inbound goods
Which tariff type is based on the item’s monetary value?
Fixed tariff by unit
Ad valorem tariff
Quota-linked tariff
Embargo-based tariff
A quota is designed to do what?
Set a minimum selling price
Control currency exchange volumes
Limit units that can be imported
Ban trade for political reasons
Exchange controls primarily restrict which activity?
Business advertising to children
Use of ad valorem tariffs
Quantity of goods imported
Amount of currency bought or sold
Dumping is best defined as which practice?
Raising prices to protect jobs
Selling below production cost
Banning trade for health reasons
Setting maximum import quantities
Which is a common policy response to suspected dumping?
Reducing exchange controls
Imposing antidumping tariffs
Adopting the metric system
Expanding personal space norms
An embargo is typically established to achieve which goal?
Increase domestic competition
Prohibit trade in a specific good
Encourage currency inflows
Standardize measurement units
What risk do businesses face when political unrest rises in a target country?
Hostile or dangerous conditions
Lower exchange rates
More flexible quota allowances
Greater personal space comfort
A cartel forms primarily to do what?
Lower import duties for members
Compete aggressively on price
Increase consumer choice in products
Act as a monopoly across markets
Which example reflects a social and cultural barrier?
Fixed tariffs per product unit
Differences in body language
Ad valorem tariff schedules
Exchange controls on currency
Personal space affects negotiations because it:
Controls tariff classifications
Sets legal import limits
Defines comfortable distance
Determines currency exchange
Most countries outside the United States use which measurement system?
Hybrid metric-imperial
Imperial units system
Local customary indices
Metric system standard
Which technological factor can be both a barrier and an opportunity?
High fixed tariffs per unit
Uniform advertising standards
Lack of telecom infrastructure
Strict exchange controls
Which statement best describes the primary purpose of GATT when it was first signed in 1947?
Provide a forum for tariff negotiations
Create a single global currency system
Establish a worldwide customs police force
Mandate equal corporate tax rates globally
Which organization’s agreements became the legal ground rules for international commerce after 1995?
World Trade Organization
International Monetary Fund
World Bank
Asia-Pacific Economic Cooperation
Which regional agreement replaced NAFTA and introduced updated rules on autos, labor, environment, and digital trade?
ASEAN
USMCA
EU
APEC
Under NAFTA, what made it easier for U.S. firms to invest in Mexico and Canada?
Reduced tariffs and trade restrictions
Mandatory state ownership of factories
Universal country-of-origin labeling
Elimination of intellectual property laws
A car assembled with 75% of its components from the United States, Canada, or Mexico qualifies for what under USMCA?
Zero tariffs
Export quotas
Automatic tax exemptions
Subsidy guarantees
Which term refers to Mexican factories where U.S. companies set up production to leverage lower labor costs?
Maquiladoras
Chaebols
Zonas francas
Keiretsu
Which organization was established in 1958 to promote trade among its members and later adopted a standardized currency?
European Union
APEC
ASEAN
IMF
Which of the following is a long-term goal of the European Union?
Set uniform tax rates worldwide
Ban internet data privacy regulations
Fix global oil prices for exporters
Eliminate all trade barriers within members
What notable event in 2020 raised questions about future EU trade relationships?
The United Kingdom exiting the EU
The IMF ending lending programs
ASEAN adopting the euro currency
APEC dissolving its secretariat
Which alliance promotes open trade and economic and technical cooperation among 21 member economies, emphasizing private sector participation?
APEC
EU
WTO
IMF
Which regional bloc aims to promote free trade, peace, and collaboration in Southeast Asia, while phasing out tariffs over time?
ASEAN
APEC
EU
USMCA
Which institution, founded in 1946, lends to underdeveloped and developing nations for reconstruction and development?
APEC
WTO
IMF
World Bank
Which institution was established in 1947 to promote monetary cooperation and reduce trade barriers among member nations?
Asia-Pacific Economic Cooperation
European Union
World Trade Organization
International Monetary Fund
Trade liberalization typically focuses on which policy outcome among member nations?
Reducing or eliminating trade barriers
Increasing mandatory export subsidies
Centralizing ownership of private firms
Fixing exchange rates permanently
Which statement best describes licensing as a market-entry method?
Agent brokers export deals for multiple firms
Franchisee acquires ownership of parent firm
Licensee pays fee to use company assets
Licensor buys foreign firm’s production line
What makes licensing especially attractive compared to direct investment when entering a politically unstable country?
Guaranteed government protection
Higher profit margins than exporting
Lower capital risk for the licensor
Immediate control of local operations
How does franchising primarily differ from licensing?
Grants ownership of parent company
Transfers patents without training
Provides methods and brand standards
Eliminates fees and royalties entirely
What is a key risk for a firm using licensing or franchising abroad?
Mandatory reshorings of operations
Automatic loss of trademark rights
Guaranteed takeover by local partner
Poor quality damaging brand image
Which statement defines contract manufacturing in international business?
Trading company buys and resells abroad
Foreign company produces to firm’s specs
Domestic firm licenses its trademarks
Export agent sells goods for multiple firms
Outsourcing is best described as what kind of practice?
Licensing technology to a franchisee
Buying finished goods from trading firms
Relocating processes within same company
Transferring tasks to other companies
Which feature distinguishes offshoring from outsourcing?
Tasks given to an outside vendor
Company retains process control
Use of export agents to sell goods
Mandatory countertrade agreements
Which is a common reason firms offshore operations?
Guaranteed local ownership rights
Automatic subsidy from host government
Lower wages and skilled labor access
Elimination of quality management needs
Reshoring refers to which action by a company?
Bringing business back to original country
Moving headquarters to regional hub
Licensing brand to domestic franchisees
Switching from global to multinational
What defines a joint venture in international markets?
Partnership between foreign and domestic
Temporary contract with an export agent
Alliance without shared equity stakes
Sole ownership of overseas facilities
A strategic alliance is primarily formed to achieve which goal?
Eliminate all trade barriers globally
Immediate merger into a single company
Guarantee of direct investment approval
Competitive advantage at worldwide scale
Direct investment involves what level of ownership?
Ownership of overseas production facilities
Short-term vendor contracting abroad
Shared branding with a franchisee
Equity-free cooperation with partners
Which characteristic best describes a multinational corporation (MNC)?
Limited to one nation’s domestic market only
Operates worldwide without strong regional ties
Requires countertrade for every transaction
Focused solely on exporting and importing
In a multinational strategy, companies typically do what with products and promotion?
Eliminate distribution intermediaries
Customize to local differences
Replace brands with generic names
Standardize for entire world
Which statement reflects a global strategy (globalization)?
Standardizes products and promotion worldwide
Varies technology and branding by region
Uses only joint ventures to enter markets
Relies exclusively on trading companies
