Question 1

Many of the toy products sold in Canada are imported from Taiwan because the Taiwanese can produce these products more effectively and efficiently than we can in Canada.This is an example of:

Accepted Answer

A)  a bilateral free trade agreement.
B)  the theory of comparative advantage.
C)  the theory of absolute advantage.
D)  a multilateral resource priority.E) A) and B)
F) A) and C)

Question 2

The country where a parent firm is located is called the home country.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements best describes the possibilities for small businesses in global markets?

Accepted Answer

A)  Small businesses have little chance of competing against giant multinational corporations in global markets.
B)  Small businesses already dominate global business.In fact,most multinational corporations are actually quite small.
C)  Small businesses are often better prepared to enter global markets than large,bureaucratic corporations.
D)  The main problem faced by small businesses in global markets is that franchise arrangements favoured by small business owners are illegal in most countries.E) B) and C)
F) A) and D)

Question 4

Which of the following statements best describes the theory of comparative advantage?

Accepted Answer

A)  The best way for a nation to ensure full employment is to be totally self-sufficient rather than relying on other nations to obtain goods and services.
B)  Each nation should produce those goods that it can produce more efficiently than other nations,and buy the goods it cannot produce efficiently from other nations.
C)  The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships.
D)  A nation should produce those goods for which domestic demand is comparatively strong,and should import those goods for which domestic demand is comparatively weak.E) C) and D)
F) A) and C)

Question 5

Differences in electrical systems throughout the world can impair a Canadian firm's ability to sell its products to other countries.

Accepted Answer

A) True 
 B)False

Question 6

An unfavourable balance of trade occurs when the value of:

Accepted Answer

A)  imports equals the value of exports.
B)  imports exceeds the value of exports.
C)  cash inflows are equal to the value of cash outflows.
D)  exports exceed the value of imports.E) B) and D)
F) B) and C)

Question 7

Which of the following is a disadvantage of foreign investment in Canada?

Accepted Answer

A)  Creation of a "branch plant economy" in Canada.
B)  Canada has a favourable balance of trade.
C)  This breaks the rules of NAFTA.
D)  Canada is able to avoid becoming a debtor nation.E) A) and B)
F) C) and D)

Question 8

The country of Urbanistan exports $250 of goods and services and imports $170 of goods and services.Urbanistan has an unfavourable balance of trade of $80.

Accepted Answer

A) True 
 B)False

Question 9

A favourable balance of trade occurs when the value of a nation's exports exceeds its imports.

Accepted Answer

A) True 
 B)False

Question 10

Trade protectionism is the use of government regulations to encourage the import of goods and services.

Accepted Answer

A) True 
 B)False

Question 11

Strategic alliances are the same as joint ventures.

Accepted Answer

A) True 
 B)False

Question 12

What do franchises have to do to ensure their products are appropriate for the global market they serve? Give an example.

Accepted Answer

Franchisors have to be careful to adapt ...

Question 13

Successful multinational corporations disregard cultural differences between countries in which they operate.

Accepted Answer

A) True 
 B)False

Question 14

The emerging nation of Lancerland has enacted a tariff on imported petroleum in order to raise money for their new government.This trade restriction is an example of a ________ tariff.

Accepted Answer

A)  revenue
B)  protective
C)  percentage
D)  fixedE) A) and D)
F) B) and C)

Question 15

__________________ for a country occurs when it has a monopoly on producing a product or is able to produce it at a cost below that of all other countries.

Accepted Answer

A)  Comparative advantage
B)  Absolute advantage
C)  Complete advantage
D)  Dumping advantageE) B) and C)
F) A) and D)

Question 16

A devaluation of the Canadian dollar would make Canadian goods cheaper to foreign buyers.

Accepted Answer

A) True 
 B)False

Question 17

Hennessy Hardware,a Canadian retailer,buys much of its inventory from Asian countries.Hennessy Hardware would benefit if the value of the dollar ________ relatively to the currencies of the countries from which Hennessy imports.

Accepted Answer

A)  rose
B)  fell
C)  remained constant
D)  floated unpredictablyE) None of the above
F) B) and C)

Question 18

The North American Free Trade Agreement (NAFTA)requires member nations to negotiate uniform trade agreements with non-member nations.

Accepted Answer

A) True 
 B)False

Question 19

One benefit of an international joint venture is sharing the risk of a major project.

Accepted Answer

A) True 
 B)False

Question 20

Canada imports most of its merchandise from:

Accepted Answer

A)  Japan.
B)  Russia.
C)  Germany.
D)  the United States.E) None of the above
F) All of the above

Exam 3: Competing in Global Markets

Hennessy Hardware,a Canadian retailer,buys much of its inventory from Asian countries.Hennessy Hardware would benefit if the value of the dollar ________ relatively to the currencies of the countries from which Hennessy imports.

Correct AnswerverifiedShow Answer

What do franchises have to do to ensure their products are appropriate for the global market they serve? Give an example.

Correct AnswerverifiedFranchisors have to be careful to adapt ...View AnswerShow Answer

Successful multinational corporations disregard cultural differences between countries in which they operate.

Correct AnswerverifiedShow Answer

Differences in electrical systems throughout the world can impair a Canadian firm's ability to sell its products to other countries.

Correct AnswerverifiedShow Answer

The emerging nation of Lancerland has enacted a tariff on imported petroleum in order to raise money for their new government.This trade restriction is an example of a ________ tariff.

Correct AnswerverifiedShow Answer

The North American Free Trade Agreement (NAFTA)requires member nations to negotiate uniform trade agreements with non-member nations.

Correct AnswerverifiedShow Answer

An unfavourable balance of trade occurs when the value of:

Correct AnswerverifiedShow Answer

Which of the following statements best describes the possibilities for small businesses in global markets?

Correct AnswerverifiedShow Answer

Trade protectionism is the use of government regulations to encourage the import of goods and services.

Correct AnswerverifiedShow Answer

A favourable balance of trade occurs when the value of a nation's exports exceeds its imports.

Correct AnswerverifiedShow Answer

The country where a parent firm is located is called the home country.

Correct AnswerverifiedShow Answer

Strategic alliances are the same as joint ventures.

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of foreign investment in Canada?

Correct AnswerverifiedShow Answer

A devaluation of the Canadian dollar would make Canadian goods cheaper to foreign buyers.

Correct AnswerverifiedShow Answer

The country of Urbanistan exports $250 of goods and services and imports $170 of goods and services.Urbanistan has an unfavourable balance of trade of $80.

Correct AnswerverifiedShow Answer

Canada imports most of its merchandise from:

Correct AnswerverifiedShow Answer

__________________ for a country occurs when it has a monopoly on producing a product or is able to produce it at a cost below that of all other countries.

Correct AnswerverifiedShow Answer

Many of the toy products sold in Canada are imported from Taiwan because the Taiwanese can produce these products more effectively and efficiently than we can in Canada.This is an example of:

Correct AnswerverifiedShow Answer

One benefit of an international joint venture is sharing the risk of a major project.

Correct AnswerverifiedShow Answer

Which of the following statements best describes the theory of comparative advantage?

Correct AnswerverifiedShow Answer

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Franchisors have to be careful to adapt ...
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