International Trade
Pre-Test Questions
Course Introduction
International Trade explores the theories, policies, and practices underlying the exchange of goods and services across national borders. The course covers foundational concepts such as comparative advantage, trade patterns, and gains from trade, while also examining the roles of tariffs, quotas, and international trade agreements. Students will analyze the economic, political, and social factors influencing global trade, assess the impact of globalization on different economies, and explore contemporary challenges such as trade disputes, protectionism, and the integration of emerging markets into the world economy.
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
Source URL: https://quizplus.com/quiz/45497
Sample Questions
Q1) ________ is an effective alternative to traditional distribution channels for firms that sell digitized products.
A)Dual licensing
B)Electronic distribution
C)Visual merchandising
D)Digital switchover
Answer: B
Q2) The KOF Index measures the ________.
A)distribution of the global workforce
B)extent of globalization
C)gross regional product of an area
D)extent of technological innovation in a nation
Answer: B
Q3) The ________ is an agency created to provide financing for national economic development efforts.
A)Global Financial Markets Association
B)World Trade Organization
C)Financial Stability Board
D)World Bank
Answer: D
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Chapter 2: Cross-Cultural Business
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) According to Hofstede's framework,a culture that scores low on ________ can change more rapidly because tradition and commitment are not impediments to change.
A)masculinity
B)individualism
C)long-term orientation
D)risk-taking
Answer: C
Q2) Subcultures mimic the values,preferences,and beliefs of dominant cultures.
A)True
B)False
Answer: False
Q3) A nation's cultural boundaries do not always correspond with its political boundaries.
A)True
B)False
Answer: True
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Chapter 3: Political Economy and Ethics
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Developing nations have the toughest product liability laws,while developed countries have more relaxed laws.
A)True
B)False
Answer: False
Q2) Laws designed to prevent companies from fixing prices,sharing markets,and gaining unfair monopoly advantages are called ________.
A)antitrust laws
B)theocratic laws
C)anarchist laws
D)bilateral laws
Answer: A
Q3) ________ measures the indirect carbon dioxide emissions from the whole life cycle of products-from their manufacture to eventual breakdown.
A)Primary footprint
B)Secondary footprint
C)Tertiary footprint
D)Internalized footprint
Answer: B
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Page 5
Chapter 4: Economic Development of Nations
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) Civil conflict,tax discrimination,weak legal systems,and terrorist actions are political risks faced by MNEs operating in foreign countries.
A)True
B)False
Q2) Compare and contrast the business environments in China and Russia.
Q3) International companies often must customize products to comply with local standards if they are to do business in a particular country.
A)True
B)False
Q4) Country risk is considered similar to ________.
A)political risk
B)commercial risk
C)currency risk
D)cross-cultural risk
Q5) Explain the risk-management method of "adaptation." Why would it most likely be less costly and time-consuming to pursue this method in a nation that practices civil law rather than in a nation that practices common law?
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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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) The theory of absolute advantage measures a nation's wealth by determining the
A)amount of gold it has on reserve
B)quantity of minerals it has on reserve
C)total trade volume in the country
D)living standards of its people
Q2) The smallest portion of the total world trade comprises trade between ________.
A)high-income and middle-income nations
B)low-income and middle-income nations
C)developed countries
D)First World member countries
Q3) Mercantilism states that nations should only concern themselves with accumulating financial wealth.
A)True
B)False
Q4) Adam Smith believed that ________.
A)governments should determine trade flows
B)market forces should determine trade flows
C)international trade should be restricted by tariffs and quotas
D)countries should produce most goods themselves and trade as little as possible
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Chapter 6: Political Economy of Trade
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) A country that believes an imported product is being sold in its market for a price lower than the cost of production for the product may impose a(n)________ in retaliation.
A)countervailing duty
B)ad valorem tariff
C)antidumping duty
D)compound tariff
Q2) The pattern of imports and exports that occurs in the absence of trade barriers is called ________.
A)vertical integration
B)autarky
C)protectionism
D)free trade
Q3) Which of the following statements is true of embargoes?
A)An embargo may be placed on one or a few goods or may completely ban trade in all goods.
B)An embargo is the least restrictive nontariff barrier available.
C)An embargo is usually employed for economic reasons.
D)Embargoes are used frequently today because they are easy to implement.
Q4) Describe the different types of tariffs and provide an example of each.
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) The possibility that a company will create a future competitor by charging another company for access to its knowledge is a(n)________ that can encourage FDI.
A)ownership advantage
B)internalization advantage
C)market imperfection
D)trade barrier
Q2) Which of the following is least likely a reason for companies to seek cross-border mergers and acquisitions?
A)to get a foothold in new geographic markets
B)to raise company budgets for increased research and development activities
C)to increase a firm's global competitiveness
D)to fill the gaps in companies' product lines in a global industry
Q3) Explain the theory of market imperfections and describe the two major market imperfections.
Q4) In industries having a limited number of small firms,foreign direct investment decisions frequently resemble a "follow the leader" scenario.
A)True
B)False
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9
Chapter 8: Regional Economic Integration
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) A group of nations in a geographic region undergoing economic integration is called a regional trading bloc.
A)True
B)False
Q2) Canada and the United States are early examples of political unions.
A)True
B)False
Q3) The increase in the level of trade between nations that results from regional economic integration is called trade creation.
A)True
B)False
Q4) The major objective of the Association of Southeast Asian Nations (ASEAN)is to ________.
A)approach the European Union to resolve disputes between member countries
B)safeguard the region's economic and political stability
C)introduce barriers to trade and investment
D)increase members' tariff rates from an average of 7.5 percent to 15 percent
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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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Increased regulation of national capital markets has been instrumental in the expansion of the international capital market.
A)True
B)False
Q2) An offshore financial center is usually characterized by ________.
A)extensive regulations
B)economic and political instability
C)excellent telecommunications
D)high taxes
Q3) Which of the following is a major purpose of the international capital market?
A)to reduce entrepreneurial initiatives
B)to increase the cost of borrowing
C)to reduce risk for lenders
D)to reduce the money supply for borrowers
Q4) A(n)________ is a right to exchange a specific amount of a currency on a specific date at a specific rate.
A)forward contract
B)currency option
C)currency hedging
D)interest arbitrage
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Chapter 10: International Monetary System
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) A ________ is a monetary regime that is based on an explicit commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate.
A)currency option
B)currency board
C)currency speculation
D)currency arbitrage
Q2) Differentiate between efficient and inefficient market views and discuss the implications of the two schools of thought for companies.
Q3) Explain the concept of devaluation,and explain the effect devaluation has on the price of a country's imports.Discuss how international companies can adjust to a weak currency.
Q4) Inflation is a result of the supply and demand for a currency.
A)True
B)False
Q5) Discuss the challenges involved in forecasting exchange rates.
Q6) Explain the differences between a monetary policy and a fiscal policy,and discuss why the IMF was established.
Q7) Discuss the role of business confidence and psychology in currency values.
Page 12
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Chapter 11: International Strategy and Organization
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Discuss the major points of differences between centralization and decentralization,and explain the differences between an international area structure and a global product structure.
Q2) 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
Q3) ________ decision making occurs at a high organizational level in one location,such as an organization's headquarters.
A)Centralized
B)Facilitative
C)Participative
D)Consultative
Q4) A multinational strategy entails having a separate strategy for each nation in which a company markets its products.
A)True
B)False
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Chapter 12: Analyzing International Opportunities
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) Which of the following is least likely to be caused by poor fiscal and monetary policies of a nation's central bank?
A)high rates of inflation
B)increasing budget deficits
C)depreciating currency
D)increasing levels of innovation
Q2) Which of the following stages of the market-screening process would require John to visit a potential market personally?
A)assessment of the national business environment
B)selection of the market
C)identification of the basic appeal for markets
D)measurement of market potential
Q3) A product for which demand increases more relative to an increase in income has an income-elasticity coefficient less than 1.
A)True
B)False
Q4) Briefly discuss the important political and legal forces that should be analyzed in the market/site screening process.
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Chapter 13: Selecting and Managing Entry Modes
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) Letters of credit are popular among traders because most of the risks are assumed by ________.
A)distributors
B)importers
C)exporters
D)banks
Q2) A document ordering the importer to pay the exporter a specified sum of money at a specified time is called a ________.
A)bill of lading
B)letter of credit
C)bill of exchange
D)management contract
Q3) Countertrade is not an option for smaller companies because of the cash outlays involved.
A)True
B)False
Q4) The most common method used for buying and selling goods internationally is licensing.
A)True
B)False
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Chapter 14: Developing and Marketing Products
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103 Flashcards
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Sample Questions
Q1) If Old World adopts different selling prices in export markets than it has in the British market,it would be following a ________ pricing strategy.
A)dual
B)transfer
C)target
D)worldwide
Q2) If Silk Industries is interested in creating buyer demand that will encourage channel members to stock its products,it should employ ________.
A)a pull strategy
B)a push strategy
C)horizontal integration
D)vertical integration
Q3) A distribution channel in which a manufacturer grants the right to sell its products to only one or a limited number of resellers is called a(n)________.
A)intensive channel
B)exclusive channel
C)zero-level channel
D)two-level channel
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16
Chapter 15: Managing International Operations
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) ________ is the term used to refer to a production technique in which inventory is kept to a minimum and inputs to the production process arrive exactly when they are needed.
A)Just-in-time manufacturing
B)Lean manufacturing
C)Continuous production
D)Flow production
Q2) A company often undertakes in-house production when it can manufacture a product for less than it must pay another business to produce it.
A)True
B)False
Q3) Deciding the sequence of operations a company will use to create its product is called ________.
A)product planning
B)capacity planning
C)location economies
D)process planning
Q4) How is process planning affected by a company's business-level strategy? How can outsourcing lower risk for firms?
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Chapter 16: Hiring and Managing Employees
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) Discuss the disadvantages of an ethnocentric staffing policy.How do bonuses,tax incentives,and employee expectations contribute to high personnel costs?
Q2) The psychological process of readapting to one's home culture after working in a host-country culture is called ________.
A)social loafing
B)assimilation effect
C)reverse culture shock
D)expatriate failure
Q3) 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
Q4) Planning for decruitment normally occurs when a company ________.
A)discontinues manufacturing or selling in a market
B)finds that current HR levels are lesser than anticipated needs
C)plans to establish multiple foreign subsidiaries
D)hires new executive leadership to implement a growth strategy
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