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Chapter Quiz
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1
Which of the following is true of absolute advantage?
A)It is the basis of most international trade.
B)It exists when the domestic supply of a product is higher than the domestic demand.
C)It is likely to occur when a country's exports are higher than its imports.
D)It is unlikely to occur when a country is the sole producer of a certain good.
E)It is likely to last when it is based on the availability of natural resources.
2
Outsourcing by domestic firms is likely to cause:
A)an increase in employment opportunities within the country.
B)an increase in immigration in the domestic country.
C)an advantage to non-English speaking developing countries.
D)a trade surplus for the country.
E)a decrease in production costs.
3
Balance of trade equals the difference in value between the:
A)exports and imports of a country.
B)expense and saving of a country.
C)assets and liabilities of a country.
D)flow of money into and out of a country.
E)earnings on foreign investment and the payments made to foreign investors.
4
Which of the following is likely to cause a trade surplus?
A)A decrease in quotas on imports
B)An increase in the currency value
C)A limit on the export of services
D)A limit on the import of products
E)A decrease in import tax
5
A country may experience decline in production when:
A)there is a trade surplus.
B)the balance of payment is favorable.
C)the value of exports is more than the value of imports.
D)more money flows in from tourism and other sources.
E)more money flows out of the country than into it.
6
Unlike the United States, most countries across the globe rely on the _____ to measure units.
A)imperial unit system
B)Planck unit system
C)metric system
D)barter system
E)Stoney unit system
7
Which of the following was created in 1995 by the Uruguay Round to deal with the rules of trade between nations?
A)The General Agreement on Tariffs and Trade (GATT)
B)The World Trade Organization (WTO)
C)The North American Free Trade Agreement (NAFTA)
D)The European Union (EU)
E)The Asia-Pacific Economic Cooperation (APEC)
8
A major advantage of using an export agent is that the company does not have to deal with:
A)a middleman.
B)rising resource prices.
C)foreign currencies.
D)the possibility of providing discounts.
E)procurement of resources.
9
A major disadvantage of using an export agent is that the company may have to:
A)arrange for the storage of products in the export market.
B)deal with foreign currencies.
C)deal with the red tape.
D)increase the product price.
E)arrange for the transportation of products to the export market.
10
Which of the following is an example of a global strategy?
A)Domino's introducing pizzas with Indian spices
B)Apple moving its Mac production to China
C)Starbucks standardizing its products across the U.S. and other countries
D)General Motors creating electric vehicles specifically for the Chinese market
E)McDonald's refraining from using pork or beef for the Indian market





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