International Trade Exam Questions
Course Introduction
International Trade explores the fundamental theories, policies, and practices that govern the exchange of goods and services across national borders. The course examines the economic rationale behind international trade, the roles of comparative advantage, and the impacts of trade dynamics on nations' economies and development. Key topics include trade policies, tariffs, quotas, trade agreements, and the influence of global organizations such as the World Trade Organization (WTO). Through case studies and real-world examples, students will analyze the effects of trade on global markets, income distribution, and economic growth, as well as consider contemporary issues like trade disputes, globalization, and protectionism.
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) The World Trade Organization's dispute settlement system has the ability to penalize offending nations.
A)True
B)False
Answer: True
Q2) Products marketed in all countries essentially without any changes are known as continental products.
A)True
B)False
Answer: False
Q3) ________ is defined as the dispersal of production activities to locations that help a company achieve its cost-minimization or quality-maximization objectives for a good or service.
A)Global offering
B)Globalization of production
C)Global governance
D)Globalization of markets
Answer: B
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Chapter 2: Cross-Cultural Business
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Sample Questions
Q1) When going global with an Internet presence,it is highly beneficial for a business to localize its Web site.
A)True
B)False
Answer: True
Q2) Cultures that score low on uncertainty avoidance tend to be less open to change and new ideas.
A)True
B)False
Answer: False
Q3) Which of the following refers to the process by which cultural traits spread from one culture to another?
A)cultural heterogeneity
B)cultural imperialism
C)cultural diffusion
D)cultural literacy
Answer: C
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Page 4
Chapter 3: Political Economy and Ethics
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Sample Questions
Q1) Stephanie also expects participants to ask: "Are the Chinese as formal and business-oriented as Americans are?" Which of the following would most likely be Stephanie's response?
A)The Chinese operate very much like Americans,for them business is more important than pleasure.
B)The Chinese dislike guessing games;give them your sales pitch right away and let the meeting develop.
C)Don't overlook the importance of personal relationships;friendship comes before business.
D)The Chinese are very flexible and will easily adapt to your culture's way of doing business.
Answer: C
Q2) Which of the following political ideologies states that every aspect of people's lives must be controlled for a nation's political system to be effective?
A)totalitarianism
B)capitalism
C)anarchism
D)pluralism
Answer: A
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Page 5
Chapter 4: Economic Development of Nations
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Sample Questions
Q1) How are countries classified? Explain with examples.
Q2) The concept of purchasing power parity (PPP)must be applied to understand the true value of a currency in its home country.
A)True
B)False
Q3) Expropriation is the term used to describe a host-country government seizing the assets of a foreign corporation and providing no compensation in return.
A)True
B)False
Q4) ________ is the value of goods and services that can be purchased with one unit of a country's currency.
A)Potential output
B)Gross national product
C)Purchasing power
D)Gross domestic product
Q5) Does greater economic freedom guarantee a higher standard of living? Provide examples of two specific countries to support your answer.
Q6) What is privatization? What role does it play in economic transition?
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Chapter 5: International Trade Theory
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Sample Questions
Q1) Explain the theory of comparative advantage using an example,and describe its assumptions and limitations.
Q2) Discuss the factor proportions theory and describe the evidence on this theory.
Q3) Most of the world merchandise trade is composed of trade in ________.
A)minerals
B)services
C)manufactured goods
D)agricultural products
Q4) Trade in services tends to be relatively more important for the world's richest countries.
A)True
B)False
Q5) Factor proportions theory states that factors in great supply relative to demand will be more costly than factors in short supply relative to demand.
A)True
B)False
Q6) Explain how the theory of absolute advantage conflicts with the theory of mercantilism.
Q7) Discuss the three essential pillars of the theory of mercantilism.
Page 7
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Chapter 6: Political Economy of Trade
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108 Flashcards
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Sample Questions
Q1) A(n)________ is the most restrictive nontariff trade barrier and is typically applied to accomplish political goals.
A)tariff-quota
B)subsidy
C)embargo
D)voluntary export restraint
Q2) Discuss the benefits and drawbacks of strategic trade policy.How are the drawbacks of subsidies similar to the drawbacks of strategic trade policy?
Q3) Receiving financing from government agencies is often crucial to the success of small businesses just beginning to export.
A)True
B)False
Q4) Which of the following is true regarding the protection of infant industries from international competition?
A)It is difficult for governments to identify the industries worth protecting.
B)Protection of infant industries helps domestic companies become innovative.
C)Protection from competition leads to improved quality and lower prices.
D)Protection leads to more economic good than harm.
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Chapter 7: Foreign Direct Investment
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104 Flashcards
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Sample Questions
Q1) According to the market imperfections theory,competition is a common market imperfection.
A)True
B)False
Q2) If Happyland advertises its beaches and attracts tourists,the tourism-related income would be recorded in its ________ account.
A)capital
B)services
C)income payments
D)merchandise
Q3) A system of production in which each of a product's components is produced in the location where the cost of producing that component is lowest is called ________ production.
A)rationalized
B)craft
C)job
D)customized
Q4) Identify why a home country might support or discourage outgoing foreign direct investment.
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Chapter 8: Regional Economic Integration
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Sample Questions
Q1) A common market area is the greatest extent of national integration.
A)True
B)False
Q2) Economic integration can unintentionally reward a less efficient producer within a trading bloc.
A)True
B)False
Q3) Which of the following is true of trade diversion?
A)It increases the purchasing power of consumers.
B)It increases the level of trade between nonmember nations.
C)It generally increases the prices of products in a nation.
D)It guarantees consumers a wider selection of goods.
Q4) The European Union plan that established its own central bank and currency in January 1999 is known as the ________.
A)Single European Act
B)European monetary union
C)Copenhagen Criteria
D)Southern Common Market
Q5) Discuss the benefits and drawbacks of regional integration.
Q6) Differentiate among the five levels of economic and political integration.
Page 10
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Chapter 9: International Financial Markets
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Sample Questions
Q1) The international bond market consists of all bonds sold by issuing companies outside their own countries.
A)True
B)False
Q2) Investors increase risk by holding international securities whose prices move independently.
A)True
B)False
Q3) If ABC Software simultaneously purchases and sells foreign exchange for two different dates,the company is said to be involved in ________.
A)increasing its foreign exchange rate risk
B)conducting a currency swap
C)entering an arbitrage situation
D)buying and selling at the spot rate
Q4) What is the role of debt in national capital markets,and what form does company debt normally take? Describe the different types of international bonds.
Q5) Why do governments impose currency restrictions and how can companies get around such restrictions?
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Chapter 10: International Monetary System
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Sample Questions
Q1) Suppose Country A has a currency called the Pulse (P).At the beginning of the year,the exchange rate between the Pulse and the U.S.dollar was P150/$.The inflation rate in Country A is running at an annual rate of 250 percent,whereas inflation in the U.S.is running at 2 percent.Which of the following would most likely be the new exchange rate that Color-Me-Green can expect at the end of the year?
A)P525/$
B)P514.70/$
C)P43.71/$
D)$43.71/P
Q2) According to the efficient market view for forecasting exchange rates,forward exchange rates are perfect predictors of future exchange rates.
A)True
B)False
Q3) Inflation is a result of the supply and demand for a currency.
A)True
B)False
Q4) Differentiate between efficient and inefficient market views and discuss the implications of the two schools of thought for companies.
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Page 12
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) Global products are most commonly seen in industries where there is ________.
A)little convergence of buyer preference across national borders
B)low pressure to contain costs
C)high demand for customized products
D)significant price competition
Q3) Companies involved in more than one line of business must first formulate a ________ strategy.
A)business-level
B)department-level
C)corporate-level
D)global-level
Q4) Core competencies are developed by organizations over long periods of time.
A)True
B)False
Page 13
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Chapter 12: Analyzing International Opportunities
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102 Flashcards
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Sample Questions
Q1) Issues regarding potential threat from substitute products in a market are addressed in ________.
A)security analysis
B)technical analysis
C)product fit analysis
D)competitor analysis
Q2) Small and medium-sized companies often find trade missions very appealing because ________.
A)it gives companies an opportunity to visit new places
B)such trips are usually cheap even for the smallest of businesses
C)it provides access to important business officials and executives
D)it helps companies analyze the strategies of all major competitors
Q3) The likelihood that a society will undergo governmental changes that negatively affect local business activity is known as ________.
A)volatility risk
B)systemic risk
C)political risk
D)credit risk
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Chapter 13: Selecting and Managing Entry Modes
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Sample Questions
Q1) Herb knows that much of the success his company enjoys is due to the patents and copyrights that protect the company's products.If Sports Stuff chooses an entry mode in which it grants another firm the right to use its intangible property for a specified period of time,it would be engaging in ________.
A)a turnkey project
B)franchising
C)licensing
D)a joint venture
Q2) Which of the following normally takes the form of a wire transfer of money from the bank account of the importer directly to that of the exporter prior to shipment of merchandise?
A)documentary collection
B)letter of credit
C)advance payment
D)open account
Q3) Typically,indirect exporting relies on local sales representatives or distributors.
A)True
B)False
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15
Chapter 14: Developing and Marketing Products
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Sample Questions
Q1) Which of the following promotional strategies is being used by a company that hires a fleet of trucks to drive through village squares and hand out free trial packages to potential end users?
A)push strategy
B)pull strategy
C)retrenchment strategy
D)differentiation strategy
Q2) Discuss how a national business environment can influence a firm's decision to standardize or differentiate its product.How do cultural differences impact product strategies?
Q3) Which of the following is true of counterfeit goods?
A)Developed nations normally have the most active counterfeiting markets.
B)Counterfeiting is more common among less visible local brands than global brands.
C)Most counterfeit products are imitations of products that normally enjoy legal protection.
D)Engineered industrial components and medicines are among the few categories of products that cannot be counterfeited.
Q4) Describe any four factors that affect international product strategies.
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Chapter 15: Managing International Operations
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Sample Questions
Q1) Which of the following most likely supports the argument of Echo managers to outsource some of the firm's manufacturing activities?
A)Echo managers could reduce the wages of U.S.based employees and sub-contractors.
B)Echo could save money by reducing the costs incurred in manufacturing the component parts.
C)Echo managers could implement a marketing campaign for foreign markets that is identical to the outsourced firm's marketing campaign.
D)Echo could merge with one of its U.S.-based competitors to gain a larger market share.
Q2) Discuss the standardization versus adaptation decision for managers when considering production facilities,and describe considerations for managers when acquiring fixed assets.
Q3) It is important for low-cost competitors to locate near their markets in order to keep track of buyer preferences.
A)True
B)False
Q4) What role does flexibility play in the make-or-buy decision?
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Chapter 16: Hiring and Managing Employees
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Sample Questions
Q1) Which of the following is a drawback of Jerome's staffing approach?
A)expense to relocate managers
B)potential for losing control of the host-country operations
C)potential for losing control of the home-country operations
D)inability to re-create local operations in the image of the home-country operations
Q2) An important advantage of polycentric staffing is that it ________.
A)re-creates local operations in the image of home-country operations
B)eliminates the high cost of relocating expatriate managers and their families
C)helps a company develop global managers who can adjust easily to any business environment
D)employs managers from home who will look out for the company's interests
Q3) A(n)________ policy would give the foreign units of a company a degree of autonomy in decision-making.
A)centralized production
B)vertical integration
C)mass customization
D)polycentric staffing
Q4) Compare and contrast the methods of cultural training.Is any single method better than all the others?
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