Global Trade and Commerce
Exam Answer Key
Course Introduction
Global Trade and Commerce explores the dynamics of international business, examining how goods, services, and capital flow across borders in an increasingly interconnected world. The course covers key topics such as trade theories, multinational corporations, global supply chains, international trade policies, and the impact of globalization on economic development. Students will analyze the roles of international organizations, such as the World Trade Organization, and consider the effects of political, social, and technological factors on global commerce. Through case studies and real-world examples, students will gain a comprehensive understanding of the opportunities and challenges involved in conducting business on a global scale.
Recommended Textbook
International Business The Challenges of Globalization 8th Edition by John Wild
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16 Chapters
1649 Verified Questions
1649 Flashcards
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Chapter 1: Globalization
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Which of the following terms is used to refer to widespread job turnover throughout an economy?
A)redeployment
B)restructuring
C)onboarding
D)churning
Answer: D
Q2) Which of the following statements,if true,strengthens Donna's argument?
A)People in low-wage nations have a high mortality rate and no access to healthcare facilities.
B)Because of the increase in employment opportunities,workers from developing countries flock to developed countries.
C)Low-wage nations tend to have poorly developed transport and communication systems.
D)Many companies take advantage of lenient labor laws by setting up facilities in low-income countries.
Answer: D
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Chapter 2: Cross-Cultural Business
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Sample Questions
Q1) A class system is a system of social stratification in which ________.
A)people are divided into various political groups and subgroups
B)a person's social rank depends upon his/her parentage
C)people join highly exclusive associations that forbid external interaction
D)personal ability and actions determine an individual's social status and mobility
Answer: D
Q2) Detailed knowledge about a culture that enables people to work happily and effectively within it is called ________.
A)cultural literacy
B)cultural imperialism
C)cultural diffusion
D)cultural divergence
Answer: A
Q3) Hispanics comprise a subculture in the United States.
A)True
B)False
Answer: True
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Chapter 3: Political Economy and Ethics
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Sample Questions
Q1) ________ is the layer of corporate social responsibility whereby a company develops a code of conduct that it will follow in its global operations and agrees to operate with greater transparency.
A)Strategic CSR
B)Risk management
C)Traditional philanthropy
D)Task orientation
Answer: B
Q2) A ________ is a political system in which government leaders are elected directly by the wide participation of the people or by their representatives.
A)democracy
B)theocracy
C)plutocracy
D)autocracy
Answer: A
Q3) Economic socialism won the battle over communist totalitarianism and capitalism.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Economic Development of Nations
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Sample Questions
Q1) What is economic transition? Describe the obstacles that countries face during economic transition.
Q2) Political risk that affects all firms in a country is referred to as ________.
A)micropolitical risk
B)macropolitical risk
C)inclusive political risk
D)exclusive political risk
Q3) How are countries classified? Explain with examples.
Q4) A solid grasp of local values,customs,and traditions can help reduce a company's exposure to political risk.
A)True
B)False
Q5) Briefly explain each of the three main methods companies use to manage political risk.
Q6) An individual from a country with a low degree of political risk would most likely be from ________.
A)Venezuela
B)Canada
C)Zimbabwe
D)Iraq
Page 6
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Chapter 5: International Trade Theory
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Sample Questions
Q1) When there are gains to be had by both countries that are party to an exchange,international trade is considered a(n)________.
A)positive-sum game
B)equal-sum game
C)negative-sum game
D)zero-sum game
Q2) An absolute advantage is the economic and strategic advantage gained by being the first company to enter an industry.
A)True
B)False
Q3) Explain how both the international product life cycle theory and the new trade theory ultimately result in lower priced goods.Include a definition of "first mover advantage" in your answer.
Q4) The theories of comparative and absolute advantage assume that specialization in the production of one particular good results in efficiency gains.
A)True
B)False
Q5) Discuss the three essential pillars of the theory of mercantilism.
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Chapter 6: Political Economy of Trade
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108 Flashcards
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Sample Questions
Q1) Which of the following is prompting farmers in many developed nations to discover new ways to manage risk and increase agricultural efficiency?
A)enforcement of trade embargoes and tariffs
B)exposure of agribusiness to market forces
C)provision of extensive government subsidies
D)designation of agricultural products as dual use products
Q2) The protection of infant industries by a nation's government can cause more economic harm than good.
A)True
B)False
Q3) ________ refers to the unwanted cultural influence in a nation that can cause great distress and lead governments to block imports it believes to be harmful.
A)Cultural imperialism
B)Cultural protectionism
C)Dumping
D)Capitalism
Q4) Describe the three categories of tariffs,and explain how the Smoot-Hawley Act of 1930 influenced tariffs in the United States.
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Chapter 7: Foreign Direct Investment
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Sample Questions
Q1) Explain the various methods that host countries use to restrict and promote foreign direct investment.
Q2) Which of the following accounts of a country's balance of payments records transactions involving the export of services?
A)transactional account
B)capital account
C)savings account
D)current account
Q3) Explain the concept of balance of payments and describe its two major components.
Q4) Home nations discourage foreign direct investment outflows because it ________.
A)discourages cooperation between countries
B)replaces jobs in the home nation
C)fails to protect the "sunset" industries in the home nation
D)decreases long-term competitiveness of companies
Q5) Performance demands made by host countries to restrict incoming FDI apply exclusively to businesses in cultural industries.
A)True
B)False
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Chapter 8: Regional Economic Integration
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Sample Questions
Q1) The Court of Justice is the court of appeals of the European Union.
A)True
B)False
Q2) In today's world,the Andean Community is best described as an incomplete ________.
A)free-trade area
B)customs union
C)economic union
D)political union
Q3) The common currency of the European Union is known as the ________.
A)European currency unit
B)eurodollar
C)euro
D)European unit of account
Q4) The Single European Act predominantly aimed at establishing common transportation policies among the European Union members.
A)True
B)False
Q5) Explain the concepts of trade creation and trade diversion.Who are the winners and losers in each scenario?
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Chapter 9: International Financial Markets
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Sample Questions
Q1) A(n)________ is a system that allocates financial resources in the form of debt and equity according to their most efficient uses.
A)international equity market
B)forward market
C)capital market
D)eurocurrency market
Q2) Securitization is the unbundling and repackaging of hard-to-trade financial assets into liquid financial instruments.
A)True
B)False
Q3) In any exchange rate,the quoted currency is always the numerator.
A)True
B)False
Q4) Booking centers are usually located on small territories with favorable tax and/or secrecy laws.
A)True
B)False
Q5) Explain the role of equity in a national capital market.What factors are responsible for the growth of the international equity market?
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Chapter 10: International Monetary System
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Sample Questions
Q1) Today's international monetary system remains in large part a managed float system.
A)True
B)False
Q2) If money were free from all controls when transferred internationally,the real rate of interest would ________.
A)be the same in all countries
B)be the same as the inflation rate
C)create arbitrage opportunities across countries
D)create arbitrage opportunities in developed countries
Q3) The IMF asset whose value is based on a "weighted basket" of four currencies is called a special drawing right.
A)True
B)False
Q4) ________ is an activity under the monetary policy of a nation.
A)Increasing taxes
B)Lowering taxes
C)Increasing government spending
D)Selling government securities
Q5) Compare and contrast the two main techniques for forecasting exchange rates.
Page 12
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Chapter 11: International Strategy and Organization
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Sample Questions
Q1) Decentralized decision making is beneficial when ________.
A)all subsidiaries use the same inputs in production
B)fast-changing national business environments put a premium on local responsiveness
C)one subsidiary's output is another's input
D)it aims to create a single global organizational culture
Q2) A global matrix structure is an organizational structure that divides worldwide operations according to a company's product areas.
A)True
B)False
Q3) Explain the differences between a mission statement and a business-level strategy.
Q4) The closing of TeleToys' Australian men's clothing line can best be described as a(n)________ strategy.
A)organic growth
B)stability
C)retrenchment
D)global
Q5) Explain how a global strategy complements a corporate growth strategy.
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Chapter 12: Analyzing International Opportunities
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Sample Questions
Q1) The process of obtaining information that already exists within the company or that can be obtained from outside sources is called ________.
A)secondary market research
B)data mining
C)data harvesting
D)scientific data archiving
Q2) Which of the following is an income-elastic product?
A)food
B)utilities
C)jewelry
D)beverages
Q3) Research in which an interviewer asks current or potential buyers to answer written or verbal questions to obtain facts,opinions,or attitudes is called a ________.
A)survey
B)covert observational research
C)consumer panel
D)brainstorming session
Q4) What is country image? Explain how it affects the screening process using examples.
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Chapter 13: Selecting and Managing Entry Modes
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Sample Questions
Q1) Agency relationships are popular among exporters because they are easy to terminate should difficulties arise.
A)True
B)False
Q2) A company proposes that in exchange for a hard-currency sale,it will make a hard-currency purchase of an unspecified product from the buyer nation in the future.Which of the following is the company proposing?
A)a counterpurchase
B)an offset
C)a buyback
D)a barter
Q3) Direct exporters always sell directly to end users.
A)True
B)False
Q4) Cross licensing occurs when companies use licensing agreements to swap intangible property with one another.
A)True
B)False
Q5) What are the differences between a turnkey project and a strategic alliance?
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Chapter 14: Developing and Marketing Products
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103 Flashcards
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Sample Questions
Q1) A pricing policy in which one selling price is established for all international markets is called ________.
A)dual pricing
B)value-based pricing
C)worldwide pricing
D)target pricing
Q2) The free-market price that unrelated parties charge one another for a specific product is called a(n)________.
A)worldwide price
B)transfer price
C)dual price
D)arm's length price
Q3) How can a lack of market understanding,theft,and corruption affect distribution?
Q4) Describe any four factors that affect international product strategies.
Q5) Which of the following products has a low value-density ratio?
A)semiconductors
B)emerald
C)crude oil
D)premium perfumes
Q6) How does the dual extension method work as a promotional strategy?
Page 16
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Chapter 15: Managing International Operations
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Sample Questions
Q1) Worker productivity tends to be lower in most developing nations than in developed nations.
A)True
B)False
Q2) What are the options available to companies seeking financial resources?
Q3) Just-in-time manufacturing drastically reduces the costs associated with large inventories in the production process.
A)True
B)False
Q4) ________ are traded in Luxembourg and London and represent a specific number of shares in an outside company.
A)Common stock
B)Bills of lading
C)Revocable letters of credit
D)Global Depository Receipts
Q5) Describe the issues involved in the decision of how a company acquires raw materials and fixed assets.
Q6) What role does flexibility play in the make-or-buy decision?
Q7) What are the advantages of American Depository Receipts (ADRs)?
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Chapter 16: Hiring and Managing Employees
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Sample Questions
Q1) Differentiate between the three types of staffing policies used by international companies.What are the advantages of each?
Q2) Which of the following offers insight into a host country's political,legal,economic,and social institutions as a way of enhancing environmental briefings?
A)language training
B)field experience
C)sensitivity training
D)cultural orientation
Q3) Guerrilla linguistics is often used in the cultural assimilation stage.
A)True
B)False
Q4) What factors influence the wages of nonmanagerial workers?
Q5) Which of the following is a major drawback of ethnocentric staffing?
A)high costs of relocating managers
B)loss of control over host-country operations
C)loss of control over home-country operations
D)difficulty in the transfer of special know-how between branches
Q6) Differentiate between culture shock and reverse culture shock.How can companies help employees deal with such issues?
Page 18
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