International Trade Exam Questions
Course Introduction
International Trade explores the economic principles underlying the exchange of goods and services across national borders. The course covers key concepts such as comparative advantage, trade policy, balance of payments, exchange rates, and the impact of tariffs and quotas. Students examine the role of international organizations, trade agreements, and globalization in shaping patterns of global commerce. Through theoretical frameworks and real-world case studies, the course analyzes the benefits and challenges of international trade for both developed and developing countries, addressing issues such as economic growth, income distribution, and trade-related controversies.
Recommended Textbook
International Business The Challenges of Globalization 7th Global Edition by John Wild
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16 Chapters
1669 Verified Questions
1669 Flashcards
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Page 2
Chapter 1: Globalization
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100 Verified Questions
100 Flashcards
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Sample
Questions
Q1) Kireki is a small country with a corrupt government.Its population is rural for most part and citizens have few or no legal rights.Which of the following is the type of market featured in Kireki?
A)developed market
B)traditional market
C)emerging market
D)virtual market
Answer: B
Q2) Most companies today operate in an environment of increased transparency and scrutiny regarding their business activities.This is due to ________.
A)the rise of the social media
B)the prosperity of developing nations
C)the heterogeneity in markets
D)labor market flexibility in developing nations
Answer: A
Q3) Critics of globalization argue that it eliminates jobs in developing nations.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Cross-Cultural Business
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) The Toro-Hessians are a minority group in the Margoza Archipelago,with a set of preferences,attitudes,and taboos,distinct from that of the national culture.Therefore,they are often overlooked when foreign businesses choose to customize their products for the inhabitants of the islands.The Toro-Hessian community is an example of ________.
A)cultural universal
B)monoculture
C)subculture
D)stratification
Answer: C
Q2) Which of the following terms describes Betty's effort to learn more about the Chinese culture?
A)cultural literacy
B)cultural imperialism
C)cultural divergence
D)cultural heterogeneity
Answer: A
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Chapter 3: Politics, Law, and Business Ethics
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) A solid grasp of local values,customs,and traditions can help reduce a company's exposure to political risk.
A)True
B)False
Answer: True
Q2) The most peaceful nations today are those that were once controlled and stabilized by colonial powers.
A)True
B)False
Answer: False
Q3) The U.S.legal system is largely based on ________.
A)common law
B)social law
C)civil law
D)theocratic law
Answer: A
Q4) Islamic law is the most widely practiced theocratic legal system today.
A)True
B)False
Answer: True
Page 5
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Chapter 4: Economics and Emerging Markets
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100 Verified Questions
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Sample Questions
Q1) The ________ of a country is its gross national product divided by its population.
A)GNP per capita
B)GDP per capita
C)purchasing power parity
D)purchasing power
Q2) A market economy is rooted in the belief that ________.
A)all the economic resources should be owned by the government
B)individual concerns should be placed above group concerns
C)every individual's business goals must be set by the government
D)government concerns matter the most in a country's economy
Q3) Central planning is rooted in the ideology that the welfare of a group is more important than individual well-being.
A)True
B)False
Q4) The ultimate goal of a market economy is to ensure that the government takes complete control over the distribution of a nation's resources.
A)True
B)False
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Chapter 5: International Trade
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100 Flashcards
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Sample Questions
Q1) According to mercantilism,the accumulation of national wealth depended on the
A)increase in a nation's trade surplus
B)increase in a nation's trade deficit
C)expansion of a nation's total value of trade
D)expansion of a nation's total volume of trade
Q2) Most of the world's merchandise trade is composed of trade in agricultural products.
A)True
B)False
Q3) Which of the following is an assumption made by the comparative advantage theory?
A)maximization of production and consumption
B)government interference and control in trade activities
C)creation of trade deficits
D)creation of trade surpluses
Q4) Explain the theory of comparative advantage using an example,and describe its assumptions and limitations.
Q5) Explain how the national competitive advantage theory supports and builds upon the factor proportions theory.
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Chapter 6: Business-Government Trade Relations
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108 Flashcards
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Sample Questions
Q1) What is meant by dumping? Describe the various roles of the World Trade Organization,including when a country is accused of dumping.
Q2) A common purpose of many companies' facilities in foreign trade zones is
A)final product assembly
B)acquisition of raw materials
C)product design
D)product manufacturing
Q3) Which of the following industries is typically protected for national security reasons?
A)agriculture
B)textile
C)automobile
D)housing
Q4) The World Trade Organization can punish a country in which a company accused of dumping is based.
A)True
B)False
Q5) Describe the purpose of a foreign trade zone.How is it used to promote trade?
Q6) What are voluntary export restraints and how are they used?
Page 8
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Chapter 7: Foreign Direct Investment
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) Which of the following is used by home country governments to limit outbound foreign direct investment?
A)ownership restrictions
B)differential tax rates
C)tax breaks
D)low-interest loans
Q2) Portfolio investment is the purchase of physical assets of a company in another country to gain a degree of management control.
A)True
B)False
Q3) Which of the following is recorded in the capital account of a country's balance of payments?
A)income payments
B)income receipts
C)foreign official assets
D)unilateral transfers
Q4) What two factors propel growth in foreign direct investment?
Q5) Discuss why a host country might promote or restrict foreign direct investment.
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Chapter 8: Regional Economic Integration
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112 Verified Questions
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Sample Questions
Q1) Discuss the benefits and drawbacks of regional integration.
Q2) Differentiate among the five levels of economic and political integration.
Q3) A group of fifty-three nations on the African continent joined forces in 2002 to create the ________.
A)Economic Community of West African States
B)African Union
C)African Unification Front
D)Organisation of the African Unity
Q4) The NAFTA is best considered a(n)________.
A)free trade area
B)customs union
C)economic union
D)political union
Q5) Higher levels of trade between nations result in ________.
A)higher product prices
B)lesser specialization
C)greater purchasing power
D)trade diversion
Q6) Discuss "political union" as a level of economic integration and "political cooperation" as a benefit of economic integration.
Page 10
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Chapter 9: International Financial Markets
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109 Flashcards
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Sample Questions
Q1) While designating an exchange rate,the numerator indicates the ________.
A)base currency
B)transaction currency
C)quoted currency
D)cross currency
Q2) ________ refers to shares of ownership in a company's assets that give shareholders a claim on the company's future cash flows.
A)Stock
B)A bond
C)Debt
D)A draft
Q3) The market consisting of all the world's currencies that are banked outside their countries of origin is called the ________.
A)foreign exchange market
B)interbank market
C)Eurocurrency market
D)offshore financial center
Q4) Briefly describe the three main institutions of the foreign exchange market.
Q5) Differentiate between currency speculation and currency arbitrage.
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Chapter 10: International Money 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) The intentional raising of the value of a currency by a nation's government is called
A)revaluation
B)securitization
C)fundamental disequilibrium
D)currency hedging
Q3) A market is efficient if the prices of financial instruments quickly reflect new public information made available to traders.
A)True
B)False
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Page 12
Chapter 11: International Strategy and Organization
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112 Flashcards
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Sample Questions
Q1) Which of the following strategies is appropriate for companies in industries where buyer preferences do not converge across national borders?
A)retrenchment strategy
B)global strategy
C)multidomestic strategy
D)mass customization strategy
Q2) Which of the following is considered as a support activity in an organization?
A)inbound logistics
B)marketing and sales
C)procurement
D)customer service
Q3) The main drawback of a multinational strategy is that it does not allow a company to ________.
A)exploit scale economies in product development or marketing
B)closely monitor buyer preferences in each local market
C)modify its products except for the most superficial features
D)respond quickly and effectively to emerging buyer preferences
Q4) Describe the four key approaches to corporate strategy,providing an example of each.
Q5) Explain how a global strategy complements a corporate growth strategy.
Page 13
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Chapter 12: Analyzing International Opportunities
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Sample Questions
Q1) The income-elasticity coefficient for Zulu doll is 1.2,which means the demand for Zulu doll will ________.
A)increase 1.2 percent for every 1.0 percent increase in income
B)decrease 1.0 percent for every 1.2 percent increase in income
C)decrease 1.2 percent for every 1.0 percent increase in income
D)remain stagnant since 1.2 is the equilibrium value
Q2) Consumer products such as toothpaste and soft drinks undergo extensive adaptation to suit local preferences.
A)True
B)False
Q3) The single greatest disadvantage of survey research is that it provides access to only a small amount of data in a single sweep.
A)True
B)False
Q4) Assessing potential in emerging markets by ranking locations using market-potential indicators is useful only for companies involved in exporting.
A)True
B)False
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14
Chapter 13: Selecting and Managing Entry Modes
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106 Flashcards
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Sample Questions
Q1) Which of the following steps of the strategy development process for exports involves performing market research and interpreting results obtained from the research?
A)identification of a potential market
B)match needs of the market to the company's abilities
C)initiation of meetings
D)commitment of resources
Q2) Which of the following steps would Owen implement toward the end while developing a successful export strategy?
A)initiation of meetings with intermediaries
B)identification of a potential market
C)commitment of resources
D)matching of market needs to company abilities
Q3) Through his research,Owen learns that the first step in developing a successful export strategy is ________.
A)initiation of meetings with intermediaries
B)identification of a potential market
C)commitment of resources
D)matching of market needs to company abilities
Q4) What are the different financing methods available to exporters and importers?
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Chapter 14: Developing and Marketing Products
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103 Flashcards
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Sample Questions
Q1) A push strategy is a promotional strategy designed to pressure channel members to promote a product to final users.
A)True
B)False
Q2) A(n)________ channel creates a barrier that makes it difficult or impossible for outsiders to penetrate.
A)exclusive
B)intensive
C)selective
D)two-level
Q3) 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
Q4) Describe the five communication strategies that companies commonly use and cite situations where the strategies are used.
Q5) How does the dual extension method work as a promotional strategy?
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Chapter 15: Managing International Operations
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Sample Questions
Q1) Companies strive toward quality improvements for attaining economies of scale.
A)True
B)False
Q2) It is important for low-cost competitors to locate near their markets in order to keep track of buyer preferences.
A)True
B)False
Q3) Computer companies buying hardware components from component-makers,assembling them in their own facilities,and selling completed systems to consumers and businesses is an example of ________.
A)telecommuting
B)franchising
C)outsourcing
D)licensing
Q4) The ISO 9000 is a production technique in which inputs to the production process arrive exactly when they are needed.
A)True
B)False
Q5) 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) Which of the following statements is true of geocentric staffing?
A)It reduces the high cost of relocating expatriate managers and their families.
B)It employs managers exclusively from the home country to look out for the company's interests.
C)It helps develop global managers who can adjust to any business environment.
D)It emphasizes on re-creating local operations in the image of home-country operations.
Q2) Citizens who are working and living in their home country are called expatriates.
A)True
B)False
Q3) 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
Q4) Reverse culture shock is the trouble expatriates face while adjusting to a new environment in which they find themselves.
A)True
B)False
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