Business 3.1

Question 1

imports

Answer 1

goods and services bought from other countries.

Question 2

exports

Answer 2

goods and services sold to other countries.

Question 3

balance of trade

Answer 3

the difference between a country’s total exports and total imports.

Question 4

exchange rate

Answer 4

the value of a currency in one country compared with the value in another.

Question 5

infrastructure

Answer 5

a factor that supports international trade in industrialized countries, including a nation’s transportation, communication, and utility systems.

Question 6

trade barriers

Answer 6

restrictions to free trade.

Question 7

quota

Answer 7

a government-set limit on the quantity of a product that may be imported or exported within a given period.

Question 8

tariff

Answer 8

a tax that a government places on certain imported products.

Question 9

embargo

Answer 9

an action imposed by the government to stop the export or import of a product completely.

Question 10

multinational company (MNC)

Answer 10

an organization that does business in several countries. It usually consists of a home country and divisions or separate companies in one or more host countries.

Question 11

joint venture

Answer 11

a unique business organized by two or more other businesses to operate for a limited time and for a specific project. It is a type of partnership.

Question 12

Without foreign trade, many things you buy would cost more or not be available at all.

Answer 12

true

Question 13

A free-trade zone is a selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing.

Answer 13

true

Question 14

A(n) _____ is the value of a currency of one country compared with the value of another.

Answer 14

exchange rate

Question 15

A balance-of-payments calculation includes other forms of exchange among nations in addition to trade.

Answer 15

true

Question 16

A U.S. manufacturer of computer chips wants to produce some of its chips in Japan. The U.S. company wants to do this with as little financial investment and risk as possible. It also does not want to be actively involved with the Japanese company. Which expansion method should the U.S. company use?

Answer 16

licensing

Question 17

An organization that does business in several countries is known as a(n)_____ .

Answer 17

multinational company

Question 18

which of the following situations in Russia would likely cause the value of the Russian ruble to rise?

Answer 18

low interest rates

Question 19

A corporation that uses a global strategy _____.

Answer 19

uses the same product and marketing strategy worldwide.

Question 20

One goal of the World Trade Organization (WTO) is to encourage lower tariffs.

Answer 20

true

Question 21

domestic business

Answer 21

making, buying, and selling of goods and services within a country

Question 22

International business

Answer 22

business activities needed for creating, shipping, and selling goods and services across national borders.

Question 23

Absolute advantage

Answer 23

when a country can produce a good or service at a lower cost than other countries