Module 3

Question 1

______ is reflected in a nation in which the government does not attempt to influence what its citizens can buy from another country by applying import duties or what citizens can produce and sell to another country.

Restricted trade

Fair trade

Free trade

Bilateral trade

Answer 1

Free trade

Question 2

Based on the theories of Smith, Ricardo, and Heckscher-Ohlin, in a country with access to cheap labor, productive land, and diverse plant life, it makes sense to _____ agricultural goods.

import

export

embargo

buy

Answer 2

export

Question 3

Because of economies of scale, some countries specialize in manufacturing a particular product (such as cars) for which the global market can only support a limited number of firms. This is a reflection of _____.

product life-cycle theory

new trade theory

production possibilities frontier

mercantilism

Answer 3

new trade theory

Question 4

The trade theories associated with Smith and Ricardo advocate for _____ free trade.

unrestricted

restricted

Answer 4

unrestricted

Question 5

______ is the first theory of trade that advocated that a country should export more than it imports and should accumulate gold and silver to make up the difference and maintain a trade surplus.

Planned economy

Mercantilism

New Trade

Isolationism

Answer 5

Mercantilism

Question 6

Manatee Mfg. is able to source parts for its refrigeration products from anywhere in the world because the United States does not place any quotas or limitations on the imports they need. This is a reflection of a _____ policy.

mixed economy

free trade

restricted trade

planned economy

Answer 6

free trade

Question 7

A country is said to have an absolute advantage in the production of an item when the country

promotes the idea of importing but downplays the idea of exporting.

is more efficient than any other country at producing the item.

is able to import the item at a lower cost than producing it themselves.

exports more of the item to other nations than any other country.

Answer 7

is more efficient than any other country at producing the item.

Question 8

Reflecting the theories of Smith, Ricardo, and Heckscher-Ohlin, free trade permits ______, which allows a country to manufacture and export in those areas where they have a comparative advantage.

quality control

quotas

specialization

embargoes

Answer 8

specialization

Question 9

Ricardo’s theory of _____ advantage states that it makes sense for a country to specialize in the production of those goods that it produces most efficiently and then purchase the goods that it produces less efficiently from other countries, even if this means buying goods from other countries that it could produce more efficiently itself.

absolute

comparative

quality

competitive

Answer 9

comparative

Question 10

New trade theory states that some countries specialize in the production and export of a particular product because _____.

in certain industries the world can only support a limited number of firms

other countries do not possess the same factor endowments

domestic demand is lower than international demand

location economies support their industrial advantage

Answer 10

in certain industries the world can only support a limited number of firms

Question 11

A basic message of Ricardo’s theory of comparative advantage is that: (Check the two that apply.)

even if countries lack an absolute advantage in the production of any good, consumers can still consume more if there are no restrictions on trade.

trade is a zero-sum game that creates clear winners and losers.

potential world production is greater with unrestricted free trade than it is with restricted trade.

by strategically using subsidies, a government would increase the chances of its domestic firms becoming first movers in newly emerging industries.

Answer 11

even if countries lack an absolute advantage in the production of any good, consumers can still consume more if there are no restrictions on trade.

potential world production is greater with unrestricted free trade than it is with restricted trade.

Question 12

Which theory does NOT support unrestricted free trade between countries?

Ricardo’s Theory

Smith’s Theory

Hecksher-Ohlin’s Theory

Mercantilism

Answer 12

Mercantilism

Question 13

A criticism of Ricardo’s theory of comparative advantage is that it is a simple model that includes many

former Communist countries.

unrealistic assumptions.

data errors.

outdated products.

Answer 13

unrealistic assumptions.

Question 14

When a government intervenes to achieve a surplus in the nation’s balance of trade, this action is consistent with the main tenet of ______.

free trade

mercantilism

an open economy

expansionism

Answer 14

mercantilism

Question 15

When discussing constant returns to specialization, it is realistic to assume that the units of resources required to produce one unit will _____ no matter where a country is on the production possibilities frontier.

increase gradually

remain the same

diminish rapidly

Answer 15

remain the same

Question 16

Heckscher and Ohlin identified differences in national factor endowments as the root of ______.

deregulation

absolute advantage

comparative advantage

entrepreneurship

Answer 16

comparative advantage

Question 17

Portugal can produce wine and cloth with less labor than England. But, given all factors of production, England can produce cloth relatively better than Portugal. According to Ricardo’s theory of comparative advantage, it make sense for England to

export cloth and import wine from Portugal.

export both cloth and wine to Portugal.

import both cloth and wine from Portugal.

import cloth from Portugal, but export wine.

Answer 17

export cloth and import wine from Portugal.

Question 18

According to the Heckscher-Ohlin theory, it is expected that the United States would export capital-intensive goods and import labor-intensive goods, but the opposite was found to be true. This became known as the

Leontief paradox.

Ricardo paradox.

Porter paradox.

Greenspan paradox.

Answer 18

Leontief paradox.

Question 19

Ricardo’s theory encourages ______ because it suggests that trade is a positive-sum game where all participating countries realize economic gains.

a planned economy

restricted trade

free trade

isolationism

Answer 19

free trade

Question 20

Raymond Vernon’s product life-cycle theory was based on the observation that for most of the 1900s the majority of the world’s new products were developed in

the United States.

the United Kingdom.

Japan.

Germany.

Answer 20

the United States.

Question 21

Ricardo’s theory of comparative advantage assumes ______ returns to scale.

increasing

constant

evolving

decreasing

Answer 21

constant

Question 22

How does the product-life cycle theory relate to the modern world?

Its relevance in the modern world seems limited as more and more products are introduced outside of the United States.

It is more relevant today than when it was introduced as the majority of new products are developed in the United States.

While it is becoming more relevant, the main tenet of mercantilism no longer plays a role in the United States.

Answer 22

Its relevance in the modern world seems limited as more and more products are introduced outside of the United States.

Question 23

Which form of returns to specialization means that the units of resources required to produce one unit are assumed to remain the same no matter where a country is on the production possibilities frontier?

Absolute

Diminishing

Increasing

Constant

Answer 23

Constant

Question 24

According to Heckscher and Ohlin, each country has certain ______, such as land, labor, and capital.

wealth sources

factor endowments

economic principles

output endowments

Answer 24

factor endowments

Question 25

The reductions in the cost of a single unit that result from large scale output of that product are called purchasing parity. factor endowments. economies of scale. mass customization.

Answer 25

economies of scale.

Question 26

Who raised questions about the Heckscher-Ohlin theory? Vernon Sachs Welch Leontief

Answer 26

Leontief

Question 27

Based on new trade theory, as the size of markets increases, companies may be able to attain better ______. tariff barriers economies of scale factor endowments product life-cycles

Answer 27

economies of scale

Question 28

Which theory was based on the observation that early in the development of a commodity, all the parts and labor come from the area in which it was invented? Comparative advantage theory Absolute advantage theory New trade theory Product life-cycle

Answer 28

Product life-cycle

Question 29

Which of these companies is demonstrating a first-mover advantage? Top Hat Tuxedo plans to open twelve new retail stores next year and place them in shopping malls near similar formal wear businesses. Nelson Concrete recently opened a production plant in the Middle East after learning there were no competitive firms in that area. Jet-Way Now is a small airline that plans to compete with the major airlines since air travel numbers are increasing. Black Gold Oil needs to open a second refinery because its original refinery has outdated equipment.

Answer 29

Nelson Concrete recently opened a production plant in the Middle East after learning there were no competitive firms in that area.

Question 30

The ethnocentric view that most new products are developed and introduced in the United States is a key weakness in the ______ theory. comparative advantage Heckscher-Ohlin product life-cycle new trade

Answer 30

product life-cycle

Question 31

According to new trade theory, the first mover's ability to benefit from increasing returns ______ for other firms. fosters the competitive spirit accelerates the demand creates a barrier to entry

Answer 31

creates a barrier to entry

Question 32

When discussing constant returns to specialization, it is realistic to assume that the units of resources required to produce one unit will _____ no matter where a country is on the production possibilities frontier. diminish rapidly remain the same increase gradually

Answer 32

remain the same

Question 33

What are three sources of economies of scale? The ability of large-volume producers to use more specialized equipment The opportunity for product customization and narrow product lines The ability of large-volume producers to use more effective, specialized employees Spreading costs over a smaller volume of product Spreading fixed costs over a larger volume

Answer 33

The ability of large-volume producers to use more specialized equipment The ability of large-volume producers to use more effective, specialized employees Spreading fixed costs over a larger volume

Question 34

Porter developed ______ broad attributes of a nation that shape the environment in which local firms compete. five two six four

Answer 34

four

Question 35

Which two simultaneous outcomes are implied by new trade theory? A nation can lower the cost of the goods being offered to consumers. A nation can increase the variety of goods available to consumers. A nation can allow other nations to compete in most product categories without incurring losses. A nation can support more than one producer of goods.

Answer 35

A nation can lower the cost of the goods being offered to consumers. A nation can increase the variety of goods available to consumers.

Question 36

To gain competitive advantage, it is important to encourage companies to invest in __________________________ factors of production. (Choose between advanced or basic.)

Answer 36

advanced

Question 37

Jameson Machinery Inc. wants to release their newest equipment in the South American market before other companies in order to establish the Jameson brand. In other words, the company wants to benefit from ____. first-mover advantages economies of scale factor endowments pioneering costs

Answer 37

first-mover advantages

Question 38

What did Porter call the concept where firms are typically most sensitive to the needs of their closest customers? Demand conditions First-mover advantage Supporting industries Factor endowments

Answer 38

Demand conditions

Question 39

Which trade theory has these implications: (1) nations may benefit from trade even when they do not differ in resource endowments or technology; and (2) specialization allows for scale economies and lower production costs? Mercantilism Fair trade New trade Ricardo

Answer 39

New trade

Question 40

Which aspect of Porter's Diamond is best evidenced by the U.S. semiconductor industry providing the basis for U.S. success in the production of personal computers? Demand conditions Related and supporting industries Factor endowments Firm strategy, structure, and rivalry

Answer 40

Related and supporting industries

Question 41

Which form of returns to specialization means that the units of resources required to produce one unit are assumed to remain the same no matter where a country is on the production possibilities frontier? Increasing Absolute Diminishing Constant

Answer 41

Constant

Question 42

In Porter's model of the determinants of national competitive advantage, he noted many U.S. firms were led by people with ______ backgrounds, likely leading to U.S. firms’ lack of attention to improving manufacturing process and product design. marketing operations finance engineering

Answer 42

finance

Question 43

Which of the following factors do Porter label as basic factors of production? Multiple select question. Skilled labor Climate Technology Natural resources

Answer 43

Climate Natural resources

Question 44

Porter states that ______ can influence each of the four components of the diamond through subsidies, education policies, and policies toward capital markets. big business government competition society

Answer 44

government

Question 45

Porter states that a company can gain ______ advantage if their home customers are demanding and knowledgeable. comparative competitive absolute

Answer 45

competitive

Question 46

First-mover advantages are especially important in industries where the global market can profitably support only a limited number of firms. True false question. True False

Answer 46

True

Question 47

A company _____ benefit from related industries that are internationally competitive and can spill over into the company. Multiple choice question. can cannot

Answer 47

can

Question 48

According to Michael Porter, there is a strong correlation between _____ and the creation and persistence of competitive advantage in an industry. supply and demand domestic rivalry technological know-how international monopolies

Answer 48

domestic rivalry

Question 49

Choose the four national attributes that Porter theorizes shape the environment that local firms compete in. Factor endowments Demand conditions Firm strategy, structure, and rivalry Trade surpluses and trade imbalances Related and supporting industries Exchange rates

Answer 49

Factor endowments Demand conditions Firm strategy, structure, and rivalry Related and supporting industries

Question 50

Porter argues that achieving international success in a certain industry is a function of factor endowments, domestic demand conditions, related and supported industries, and ______. government intervention host-country norms social hierarchies domestic rivalry

Answer 50

domestic rivalry

Question 51

Preempting demand, gaining volume cost advantages, building the brand, and establishing a long-term competitive advantage are associated with brand equity. secondary-mover advantages. segmenting, targeting, and positioning. first-mover advantages.

Answer 51

first-mover advantages.

Question 52

Since the international market is significantly larger than the domestic market, exporting is nearly always a way to increase a company's revenue. True false question. True False

Answer 52

True

Question 53

What three impediments would make it difficult for some companies to gain knowledge of opportunities available in foreign countries? Manufacturing Distance Logistics Time Language

Answer 53

Distance Time Language

Question 54

A ______ is a business tool provided by the U.S. Department of Commerce which provides the name, address, and basic business information of potential distributors in foreign markets. best prospects list market meter business forecast target group

Answer 54

best prospects list

Question 55

Sunny Soups has never exported their products before but would like to start. What company can provide Sunny Soups with a full menu of services to handle all aspects of their exporting needs? ROI TQM JIT EMC

Answer 55

EMC

Question 56

Which company is taking steps to minimize risk as it enters the export market? Multiple choice question. Instead of trying to spread itself too thin by going after 22 foreign markets, Natalie's company focused on three potential foreign markets. Rather than hire local personnel to oversee her company's exports, Jenna's company decided to keep all personnel in the U.S. office. Jamie's company has surpassed all of its export goals to Australia. He has decided to open another plant in the United States to meet increasing demand. After Robert's company made its initial successful exports to Chile, it decided to wait for other Chilean companies to request products.

Answer 56

Instead of trying to spread itself too thin by going after 22 foreign markets, Natalie's company focused on three potential foreign markets.

Question 57

When a company is able to expand its operations by exporting globally, it can often achieve greater economies of scale which results in ______. fewer product choices higher consumer prices lower unit costs mass customization

Answer 57

lower unit costs

Question 58

The CORE diagnostic tool on the globalEDGE website helps a company assesses Multiple choice question. its readiness to export a product. the competition's product line. possible foreign export opportunities. the need to hire additional personnel.

Answer 58

its readiness to export a product.

Question 59

Phase Two Athletics is located in the United States. The company would like to export to Italy but preliminary meetings with representatives from Italy have proven difficult. The representatives don't understand the value of the company's fitness gear because they feel most Italians prefer to exercise at a health club where the gear is provided. What impediment to exporting is Phase Two Athletics facing? Multiple choice question. Distance Time Language Culture

Answer 59

Culture

Question 60

For a small fee, the Department of Commerce provides a company with a market research survey on a product of its choice. This is called a(n) ______. comparison shopping service export trade relief best prospects list supply and demand chart

Answer 60

comparison shopping service

Question 61

XYZ Company asked an international trade partner to pay for goods prior to delivery. XYZ Company was not fully aware of the company's background and wanted to be sure that it got paid. This is an example of why the lack of ______ has resulted in the development of special mechanisms for financing exports and imports. Multiple choice question. cynicism wariness trust understanding

Answer 61

trust

Question 62

What firms are export specialists that act as an export department for their clients? Multiple choice question. Export management companies Confirming houses Customs brokers Exporting trading companies

Answer 62

Export management companies

Question 63

What are two factors that can lead to a lack of trust in an export transaction? Multiple select question. Similarity in language and culture Problems enforcing contractual obligations Multiple legal avenues to uphold contracts Distance between the two parties

Answer 63

Problems enforcing contractual obligations Distance between the two parties

Question 64

In order to reduce the risks associated with exporting, it makes sense for a company to initially focus on one market. True false question. True False

Answer 64

True

Question 65

A document issued by a bank at the request of an importer that directs the bank to pay money to the exporter upon presentation of specified documents is called a Multiple choice question. letter of credit. bill of lading. letter of lading. bill of exchange.

Answer 65

letter of credit.

Question 66

Businesses would use the CORE diagnostic tool when making decisions regarding _____. Multiple choice question. importing franchising exporting licensing

Answer 66

exporting

Question 67

An order written by an exporter that instructs an importer to pay a specified amount of money at a specified time is called a _____. Multiple choice question. draft letter of credit policy bill of lading

Answer 67

draft

Question 68

Which document indicates that the carrier has received the merchandise described in the document? Multiple choice question. Letter of credit Time draft Sight draft Bill of lading

Answer 68

Bill of lading

Question 69

Exquisite Jewelery Company, based in New York, isn't sure it wants to start exporting to Europe. The company is concerned that it won't be paid unless it receives it upfront and the European companies don't want to pay until they receive the products. This situation demonstrates how _____ can affect exporting. Multiple choice question. government regulations expropriation technological know-how a lack of trust

Answer 69

a lack of trust

Question 70

After the exporter presents the draft to the bank in a typical international trade transaction, what happens next? Multiple choice question. The exporter agrees to fill the order. The exporter's bank presents the draft to the importer's bank. The importer pays the bank. The importer's bank tells the importer that documents have arrived.

Answer 70

The exporter's bank presents the draft to the importer's bank.

Question 71

A letter of credit is issued by a bank after being requested by an _____. Multiple choice question. exporter importer

Answer 71

importer

Question 72

The Foreign Credit Insurance Association and the _____ are two forms of government-backed assistance in the United States that help finance export programs. Multiple choice question. Department of the Treasury Export-Import Bank United Nations Federal Deposit Insurance Corporation

Answer 72

Export-Import Bank

Question 73

The draft, sometimes called the _____, is used in international commerce to effect payment. Multiple choice question. bill of exchange letter of credit bill of lading credit invoice

Answer 73

bill of exchange

Question 74

Which organization is a wholly owned U.S. government corporation that was set up to provide financing to facilitate exports and imports to support U.S. employment? Multiple choice question. The World Bank The Export-Import Bank The Federal Reserve The Foreign Credit Insurance Association

Answer 74

The Export-Import Bank

Question 75

The ______ is a document issued to the exporter by the common carrier transporting the merchandise and acts as a receipt of goods. Multiple choice question. bill of lading dividend time draft letter of credit

Answer 75

bill of lading

Question 76

Brett's company is in competition with four other suppliers who are trying to get similar products into France. One way Brett's company could boost its appeal with the importer would be to forgo a _____ even though it will expose the company to default risk. Multiple choice question. letter of credit loan guarantee bill of lading tax allowance

Answer 76

letter of credit

Question 77

XYZ Company asked an international trade partner to pay for goods prior to delivery. XYZ Company was not fully aware of the company's background and wanted to be sure that it got paid. This is an example of why the lack of ______ has resulted in the development of special mechanisms for financing exports and imports. Multiple choice question. wariness trust understanding cynicism

Answer 77

trust

Question 78

When conventional means of payment are difficult in an international sale, ______ is an alternative means of structuring the sale and allows for the trade of goods and services. Multiple choice question. dumping arbitrage licensing countertrade

Answer 78

countertrade

Question 79

In a typical international trade transaction, after the importer arranges for a letter of credit, the next step is that the Multiple choice question. exporter ships the goods to the importer. importer's bank sends a letter of credit to the exporter's bank. exporter sells the draft to the importer's bank. exporter presents the draft to the importer's bank.

Answer 79

importer's bank sends a letter of credit to the exporter's bank.

Question 80

Why did many Asian countries turn to countertrade following the 1997 currency crisis? Multiple choice question. Because of a lack of hard currency Because they wanted the expertise of EMCs To increase their exports To replace the gold standard

Answer 80

Because of a lack of hard currency

Question 81

What two sources of assistance does the government provide to U.S. exporters to finance their export programs? Multiple select question. Export-Import Bank FDIC Department of Treasury Foreign Credit Insurance Association

Answer 81

Export-Import Bank Foreign Credit Insurance Association

Question 82

______ is the direct exchange of goods between two parties without a cash transaction. Multiple choice question. Counterpurchase Barter Offset Buyback

Answer 82

Barter

Question 83

The main reason a company would consider ______ is that it provides a firm with a way to finance its export deal when other methods of financing are not available. Multiple choice question. a bill of lading arbitrage countertrade a letter of credit

Answer 83

countertrade

Question 84

What is a reciprocal form of international trade in which goods or services are exchanged for other goods or services, rather than for hard currency? Multiple choice question. Dumping Credit swap Countertrade Arbitrage

Answer 84

Countertrade

Question 85

Boeing often enters into agreements in which the company has to purchase certain components parts from the country in which it hopes to do business. This arrangement is an example of _____. Multiple choice question. forward exchange rates arbitrage a letter of credit countertrade

Answer 85

countertrade

Question 86

What is considered the most restrictive form of countertrade? Barter Counterpurchase Offset Switch trading

Answer 86

Barter

Question 87

International trade in services is reflected in the ________ account of a country’s balance of payments. capital normal primary income secondary income current

Answer 87

current

Question 88

As compared to international trade in goods, barriers to international trade in services are lower. about the same. higher. usually covered by the same agreements. significantly lower.

Answer 88

higher.

Question 89

Barriers to the free flow of trade in services like France’s digital services tax on Google make it easier for foreign competitors to sell their services. have little effect on the distribution of services. eliminate the need for import tariffs. lower the price of Google’s service for consumers in France. raise the cost of Google’s service in France.

Answer 89

raise the cost of Google’s service in France.

Question 90

New Trade Theory would suggest that Boeing has stayed out of head-to-head competition with Airbus in the super large capacity aircraft sector because Multiple Choice the Boeing 747 is more fuel efficient. Boeing already produces the 747. Airbus was first to market with the Airbus 380 aircraft. most buyers for the aircraft are located in markets closer to Airbus. Airbus has better designers.

Answer 90

Airbus was first to market with the Airbus 380 aircraft.

Question 91

Using your knowledge of New Trade Theory, which statement best explains the advantage Airbus has in the production and export of super large capacity aircraft? Multiple Choice Airbus is able to benefit from substantial government subsidies. Airbus has been able to capture scale economies that make it difficult for later entrants to match. Boeing’s cost basis is lower, but it lacks the sales force of Airbus. Competitors are able to match Airbus on price but not cost. Airbus’s alliance with major airlines effectively shut other manufacturers out of the market.

Answer 91

Airbus has been able to capture scale economies that make it difficult for later entrants to match.

Question 92

In 2018, the Trump Administration imposed 25 percent tariffs on imports of foreign steel into the United States. Which statement is true? The Trump Administration is adopting a laissez-faire approach to trade. The policy is attempting to influence what U.S. citizens and companies buy from foreign countries. The Trump Administration is following Adam Smith’s philosophy of the invisible hand. The policy is designed to allow the invisible hand rather than government policy to determine trade flows. The Trump Administration is pursuing a policy of free trade.

Answer 92

The policy is attempting to influence what U.S. citizens and companies buy from foreign countries.

Question 93

President Trump claims the 25 percent tariffs on imported steel are necessary to protect U.S. steel jobs. Which is a potential outcome of his policy? U.S. steel companies will quickly become more efficient as compared to their foreign competitors. U.S. consumers will pay higher prices for domestic steel than they would for imported steel Foreign steel companies will see a rise in their exports to the United States. U.S. steel workers are more efficient as compared to foreign steel makers. Employment in the U.S. steel industry will rise sharply.

Answer 93

U.S. consumers will pay higher prices for domestic steel than they would for imported steel

Question 94

A situation in which an economic gain by one country results in an economic loss by another is called a positive-sum game. diminishing return. first-mover advantage. zero-sum game. dynamic effect.

Answer 94

zero-sum game.

Question 95

Based on the information provided in the video, which philosophy best describes Donald Trump’s perspective on trade between nations? Under Trump, the United States is moving toward unrestricted free trade. U.S. trade policy under Trump is pro free trade. Trump has a mercantilist philosophy toward trade. Trump supports Adam Smith’s theory of absolute advantage. Trump agrees with David Ricardo’s theory of comparative advantage.

Answer 95

Trump has a mercantilist philosophy toward trade.

Question 96

As Maine Coast Company exports its lobster to foreign markets, which document acts as a receipt, a contract, and a document of title? letter of credit time draft sight draft bill of lading bill of exchange

Answer 96

bill of lading

Question 97

Universities that actively recruit foreign students effectively limit the choices for American students. capitalize on the large revenue and profit potential found in foreign markets. typically have a poor understanding of the competitive positions in that market. lack effective distribution systems in their own countries. may have to negotiate more competitive tuition rates to successfully attract students.

Answer 97

capitalize on the large revenue and profit potential found in foreign markets.

Question 98

If an American university sends a recruiter to a foreign country to speak with high school students in that country about getting their college education in the United States, the university is taking a(n) __________ approach to exporting. proactive reactive high risk inventive ethnocentric

Answer 98

proactive

Question 99

If the export value of American educational institutions is more than twice that of America’s top agricultural export, and supports 455,000 jobs, we can conclude that exports of higher education represent an important component of the U.S. economy. American universities have been recruiting foreign students to the detriment of U.S. students. U.S. taxpayer dollars are being spent in foreign countries rather than domestically. exports of higher education are paid for in foreign currencies effectively bypassing EXIM bank requirements. exports of higher education will continue to grow without export assistance.

Answer 99

exports of higher education represent an important component of the U.S. economy.

Question 100

The __________ program organized by the Department of Commerce provides representatives who accompany groups of U.S. businesses abroad to meet with qualified agents, distributors, and customers. Multiple Choice benchmark diversification matchmaker

Answer 100

matchmaker

Question 101

For U.S. firms, the most comprehensive source of information on export opportunities is Multiple Choice the U.S. Department of Commerce. the Internet. the international department of the firm's commercial bank.

Answer 101

the U.S. Department of Commerce.

Question 102

The increase in the use of barter in Venezuela has been prompted by the imposition of capital controls. the looming bond maturation date. the International Monetary Fund's demand for debt repayment. rapidly falling inflation rates. the collapse of the bolivar.

Answer 102

the collapse of the bolivar.

Question 103

Why did Venezuela's Health Minister offer to settle a $5 million bill to a group of pharmaceutical companies in the form of diamonds, gold, and coltan rather than cash? Multiple Choice Increasing imports have created a shortage of euros. The dollar shortage in Venezuela made paying the bill in dollars very difficult. The drachma is no longer a favored currency. Prices are almost always more favorable when barter is used rather than cash. Declining exports have created a surplus of goods.

Answer 103

The dollar shortage in Venezuela made paying the bill in dollars very difficult.

Question 104

Given what you know about countertrade from your text, along with the information provided in the case above, identify which situation is most likely to be present in Venezuela. Multiple Choice increasing levels of countertrade activities involving Venezuelan firms a shift toward a nonconvertible currency increases in switch trading, but decreases in buyback arrangements surplus hard currency reserves looser capital controls

Answer 104

increasing levels of countertrade activities involving Venezuelan firms

Question 105

Venezuela's new reliance on barter as a mechanism for exchange reflects in part the rapid increase in Venezuela's GDP. the newly imposed export limits on Venezuelan firms. EU Central Bank currency manipulation effects. the economic impact of the drop in global oil prices. the general preference for a cashless society.

Answer 105

the economic impact of the drop in global oil prices.