Final Exam (Part 2) Flashcards
Which of the following terms refers to the broadest measure of economic development of a country?
C. gross national product (GNP)
Which of the following measures the extent to which a government equitably provides its people with a long and healthy life, an education, and a decent standard of living?
B. human development index
Nations having the poorest infrastructures and lowest personal incomes are called ________.
B. developing countries
A country that has recently increased the portion of its national production and exports derived from industrial operations is called a(n) ________.
C. newly industrialized country (NIC)
________ is the value of all goods and services produced by the domestic economy over a one-year period.
D. Gross domestic product (GDP)
________ is the process by which a nation changes its fundamental economic organization and creates new free-market institutions.
A. Economic transition
Which of the following terms refers to the forced transfer of assets from a company to the government without compensation?
A. confiscation
________ is the forced transfer of assets from a company to the government with compensation.
B. Expropriation
Which of the following is a disadvantage of local requirement laws to foreign companies?
D. Companies required to hire local personnel might be forced to take on inadequately trained workers.
Global Trading just learned that the government of one country in which it does business has taken over the entire electric utility industry. The government’s actions are an example of ________.
C. nationalization
________ is the chance that political forces may change a country’s business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return.
D. Political risk
The relative ability of two countries’ currencies to buy the same basket of goods in those two countries is called ________.
A. purchasing power parity
Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the international arena, it chose Russia as its main market. Although Russia has been in transition for years, Cleanshot managers believe their company has tremendous opportunities there.
Which of the following challenges is Cleanshot most likely to face in Russia?
D. organized crime
Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the international arena, it chose Russia as its main market. Although Russia has been in transition for years, Cleanshot managers believe their company has tremendous opportunities there.
Given the lack of available hard currency, Russian businesses often use goods and services as payment for other products they buy from abroad. This practice is referred to as ________.
D. barter
________ refers to the purchase, sale, or exchange of goods and services across national borders.
A. International trade
The danger of trade dependency is that ________.
A. political turmoils in a country might affect all dependent countries
________ says that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports.
A. Mercantilism
The condition that results when the value of a nation’s exports is greater than the value of its imports is called ________.
A. a trade surplus
The condition that results when the value of a country’s imports is greater than the value of its exports is called ________.
C. a trade deficit
Which of the following refers to the ability of a nation to produce a good more efficiently than any other nation?
B. absolute advantage
To complete his business bookkeeping work each month, a business owner spends about 20 hours and in the process, has to give up $900 in income. If he hired a bookkeeper to do the work, the job would be completed in 15 hours and would cost him $600. Should the owner hire the bookkeeper or continue to do the work himself?
C. He should hire the bookkeeper because the bookkeeper has an absolute advantage in completing the books.
According to the theory of ________, trade is beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods.
C. comparative advantage
The ________ theory states that countries produce and export goods that require resources available in abundance and import goods that require resources in short supply.
D. factor proportions
The Leontief paradox describes evidence ________.
D. contrary to the predictions of the factor proportions theory
