CREDIT BUSINESS ASSOCIATE CBA 300 FINAL PRACTICE EXAM 2026 GRADED A+ 100% PASS

CBA CBA CREDIT BUSINESS ASSOCIATE CBA 300 FINAL PRACTICE EXAM 2026 GRADED A+ 100% PASS Which of the following is NOT a consideration that international firms must take into account when conducting business in countries other than their own? - Correct Answer Revenue potential Which of the following industries uses the U.S. dollar as its main currency for transactions? - Correct Answer-Oil You are exporting to a new country where you have not yet established clients with good pay history. You do not know how the new customers will pay or anything else about them. Which of the following issues are you working with? - Correct Answer Credit checking Your firm engages in international trade with a few different countries where it supplies products and gains products in return. Often your firm supplies your product first and receives the products from the other firm later. Which form of payment is this? - Correct Answer-Counterpurchase You are new to international trade, and your firm is relatively young and financially struggling at this point. You do not want to overextend credit to others and have to wait for money. As such, you have decided you need to take payment before shipping the merchandise. Which system are you using? - Correct Answer-Payment in Advance You work in a large agricultural firm that ships grain overseas to foreign markets. They take the grain and make quality baked goods that they send back to you for sale in lieu of payment. Which type of system is this? - Correct Answer-Buy-back From the exporter's perspective, which is the safest method of payment? - Correct Answer-Payment in Advance Which of the following is NOT an issue that is more complicated when the transaction involves a buyer and a seller from two different countries? - Correct Answer-Reaching agreement on price, quantity, and delivery date Which of the following documents may be required for politically sensitive goods, such as nuclear fuels, or for high-technology goods that may have military uses? - Correct Answer-Export License CBA CBA Which method of trade payment occurs when a firm accepts something other than money for goods or services? - Correct Answer-Countertrade Which of the following is NOT a form of countertrade? - Correct Answer-Balance sheet hedge ____________ is the impact on the firm's consolidated financial statements of fluctuations in exchange rates that change the value of foreign subsidiaries as measured in the parent's currency. - Correct Answer-Translation exposure A firm faces _________ when the financial benefits and costs of an international transaction can be affected by exchange rate movements that occur after the firm is legally obligated to complete the transaction. - Correct Answer-transaction exposure Which of the following strategies for managing transaction exposure would NOT require outlay of capital? - Correct Answer-Go naked Which of the following is NOT a way to respond to transaction exposure? - Correct Answer-Create a balance sheet hedge As the financial officer for an international firm, you need to keep a certain balance on foreign currency. You see that the yen is expected to rise again in the future as more plants resume production, so you keep a larger supply of the yen on hand than you normally would in anticipation of this. What strategy are you using? - Correct Answer Minimizing foreign exchange risk MNC'S strive to minimize company-wide cash holdings often using ___________________________, which is coordinated by corporate treasury staff to monitor worldwide cash flows. - Correct Answer-centralized capital management A strategy to try to increase net holdings of currencies that are expected to rise in value and to decrease net holdings of currencies that are expected to fall in value is known as __________. - Correct Answer-leads and tags Which of the following approaches would estimate cash flows generated by each project and then calculate the interest that makes the net present value of the project just equal to zero? - Correct Answer-Internal rate of return You are trying to produce a solid budget for the next five years and are worried about some new projects that are just starting. You want to calculate how long it will take to break even from these projects. What are you looking at? - Correct Answer-Payback period CBA CBA International businesses account for _______________ by adjusting either the discount rate upward or the expected cash flows downward. - Correct Answer-a higher level of risk The minimum rate of return the firm finds acceptable for its capital investments is called the ________. - Correct Answer-hurdle rate Your firm pays a large amount in taxes in some of the foreign countries you deal with. You decided to do something about this by opening a small subsidiary in the Cayman Islands and using it to conduct monetary transactions. What would the Cayman Islands be used as in this case? - Correct Answer-tax haven ________________ is the price paid for goods and services involved in intracorporate transactions between a subsidiary and other branches of the corporate family. - Correct Answer-A transfer price The method using prices determined in the open market to transfer goods between units of the same corporate parent is called __________. - Correct Answer-market based transfer pricing MNCs commonly use which method of transfer pricing? - Correct Answer-Non-market transfer pricing When financing attractive investments, corporate finance officers strive to do all of the following EXCEPT ________. - Correct Answer-enter only into U.S. currency-based investment transactions Which of the following is important because it can help lower marketing costs and create a unified marketing effort? - Correct Answer-Coordination Which of the following calls for standardization of the marketing mix, which allows firms to provide the same product or service in different markets globally and use the same marketing approach? - Correct Answer-Geocentric approach Which of the following can be pursued and achieved through systematic reductions in production and manufacturing costs, reductions in sales costs, the acceptance of lower profit margins, the use of less expensive materials and component parts, or other means? - Correct Answer-Cost leadership Which of the following is NOT one of the four elements of the marketing mix? - Correct Answer-Packaging Which of the following is a disadvantage of implementing standardized international marketing? - Correct Answer-Ignores local legal differences CBA CBA Which of the following is a disadvantage of customized international marketing? - Correct Answer-Reduces economies of scale in production A marketing strategy that involves marketing managers concentrating their efforts on particular segments of the consumer market or on particular areas or regions within a market is referred to as ________. - Correct Answer-focus strategy Which decision would cause manufacturers to reinforce the suspension systems of motor vehicles sold in countries where road maintenance is poor, based on the country's infrastructure? - Correct Answer-Customization Culture plays a major role in the marketing of products in foreign markets. You are marketing cars in Japan and are exploring which options would be most attractive. What did you find based on how Japanese prefer their cars? - Correct Answer-More visually appealing Marvel Comics attempted to introduce the "new" Spider-Man in India. They changed his alter-ego's name to Pavitr Prabhakar, gave him his powers from a yogi instead of a spider, and changed his costume to a loincloth. Why did they do this? - Correct Answer To increase sales Which of the following is one of the most vital product policy decisions facing international marketers? - Correct Answer-Which products should be standardized across markets or customized within individual markets Which of the following is FALSE regarding a two-tiered pricing policy? - Correct Answer The firm sets the same price for all of its domestic and international sales. Your firm decides to make the most profit in all markets by looking at pricing in each market and pricing accordingly in each one rather than sticking with one single price for all markets. What is this known as? - Correct Answer-Market pricing policy You have adopted a two-tiered pricing policy for foreign markets, but have heard that there are risks involved. One of the problems pertains to setting price differences that knock out competition in their foreign markets by presenting lower prices in the foreign markets than domestic markets. What is this called? - Correct Answer-Dumping Your firm makes toys in North America and distributes them to Asia. Asia's currency has an exchange rate higher than North America. This means that your firm has to decide whether to price the item from your home market or use the host currency to set price. In order to remain marketable in the area, you decide to set the price using the host currency. This means your firm will receive ________. - Correct Answer-lower profit margin Which of the following is FALSE regarding a market pricing policy? - Correct Answer The firm calculates and charges the profit-minimizing price in each market it serves. CBA CBA Two conditions must be met if a firm is to successfully practice market pricing. Of the following, which describes one of those conditions? - Correct Answer-The firm must face different demand or cost conditions in the countries in which it sells its products. Differences in distribution practices also affect __________________. - Correct Answer-the final price the end customer pays You want to break into a new market with your new cleaning products and are trying to figure out how to do so. You want to be able to get your message across to your foreign customers in a personal way. Which of the following would be a good way to do so? - Correct Answer-Subcontract personal selling to local sales organizations that handle product lines for several firms. Which is the MOST important element in the promotion mix for most international firms? - Correct Answer-Advertising Which of the following is FALSE about sales promotions? - Correct Answer-They are inflexible. Which of the following is FALSE regarding public relations? - Correct Answer-Public relations touts the specific advantages of an individual product or service. Which of the following would be used to promote NFL-licensed goods in Japan? - Correct Answer-Japan Marketing Services Which of the following is FALSE regarding the fourth P of the international marketing mix, known as place, when applied to an international firm? - Correct Answer-The transportation mode chosen does not involve a trade-off between time and money. Which of the following best describes the number of stages in the distribution channels? - Correct Answer-Channel length Which of the following strategies can be achieved through systematic reductions in production costs? - Correct Answer-Cost leadership strategy Which of the following states that a firm should simply market its goods internationally the same way it does domestically? - Correct Answer-Ethnocentric Approach Which of the following comprises both the set of tangible factors that the consumer can see or touch and intangible factors such as image, installation, warranties, and credit terms? - Correct Answer-Product Which of the following is NOT an advantage in standardizing the brand name of a product? - Correct Answer-The firm can adjust to local culture. CBA CBA Which of the following is a market that results when products are imported into a country legally but outside the normal channels of distribution authorized by the manufacturer? - Correct Answer-Parallel importing Which price is found at the intersection of the firm's marginal revenue curve and its marginal cost curve? - Correct Answer-Profit-maximizing price Which of the following comprises specialized marketing efforts such as coupons, in store promotions, sampling, direct mail campaigns, cooperative advertising, and trade fair attendance? - Correct Answer-Sales promotion When determining which communication channel to use to convey a message, which of the following does NOT have to be taken into account? - Correct Answer-Product pricing The fourth P (place) is more commonly known as which of the following? - Correct Answer-Distribution Which of the following defines the time between the placement of an order and its receipt by the customer? - Correct Answer-International order cycle time In a joint venture, which is a form of strategic alliance, what does a formal management organization allow? - Correct Answer-To be broader in scope and longer in duration Join ventures (JVs), a type of strategic alliance, are often used when the proposed strategic alliance is ___________________________. - Correct Answer-complex and expected to be long-lived Non-joint venture strategic alliances are __________________ because of their narrow mission and lack of a formal organizational structure. - Correct Answer-relatively less stable than joint ventures Which of the following is NOT an example of cooperation between international firms? - Correct Answer-Firms competing for increased market share in the same market Which of the following factors influences the formation of joint ventures (JVs)? - Correct Answer-Government regulations What is one reason that governments will encourage strategic alliances? - Correct Answer-Shared knowledge and expertise A firm entering a new market often faces significant obstacles such as __________________________________. - Correct Answer-entrenched competition or hostile government regulations CBA CBA Which of the following is NOT one of the potential disadvantages of strategic alliances? - Correct Answer-Shared risk Advantages such as synergy and competitive advantage combine with other advantages to make strategic alliances successful. The primary idea is that these advantages enable the collaborating firms to _____________. - Correct Answer-achieve more and to compete more effectively than if they attempted to enter a new market or industry alone Which of the following is a functional arrangement in which two or more firms each manufacture products or provide services in a shared or common facility? - Correct Answer-Production alliance A confederation of organizations that band together to research and develop new products and processes for world markets is known as a(n) ________. - Correct Answer-R&D consortium A functional arrangement in which the partners agree to undertake joint research to develop new products or services is known as a (n) ________. - Correct Answer-R&D alliance Which of the following are usually ad hoc in nature and established to correct some problem a firm has in a specific market? - Correct Answer-Marketing alliances The strategic alliance between Boeing and its three Japanese partners in which Boeing helped cover R&D and manufacturing costs was created primarily for which of the following reasons? - Correct Answer-Financial A firm may pursue a(n) _____________ if a particular country does not allow wholly owned foreign operations. - Correct Answer-public-private venture Comprehensive alliances allow for more synergy by doing which of the following? - Correct Answer-Making it easier to achieve greater synergy through sheer size and total resources Which is NOT among the four primary factors for choosing an appropriate partner(s) to ensure success of any cooperative undertaking? - Correct Answer-Synergy Under a(n) __________________which is reserved for JVs, the partners agree not to get involved in ongoing operations and to accede management control to the executives of the JV itself. - Correct Answer-delegated arrangement Under delegated arrangement, how is management controlled? - Correct Answer-A management team is developed using key employees or new hires from both firms and put in place to control the strategic alliance. CBA CBA Under a(n) ____________________, each partner fully and actively participates in managing the alliance. - Correct Answer-shared management agreement Which type of arrangement requires a high level of coordination and near-perfect agreement between the participating partners? - Correct Answer-Shared management agreement A management arrangement such as the one in which GM, with a 67-percent stake in a JV with Raba, a Hungarian truck, engine, and tractor manufacturer, assumed management control over the venture's operations is known as a(n) ________________________. - Correct Answer-assigned arrangement Which of the following can be a pitfall of a strategic alliance? - Correct Answer-Potential loss of autonomy Which of the following is NOT a concern regarding the financial considerations in a strategic alliance? - Correct Answer-Whether or not the strategic alliance may be a first step toward a takeover Of the following, which is NOT a key reason a strategic alliance may fail? - Correct Answer-Lack of investment commitments Which of the following is NOT a way to expand international operations? - Correct Answer-Tariffs In a joint venture alliance, the goal of the alliance is to do what? - Correct Answer Cooperate in production of a given product Which of the following would NOT be an example of shared knowledge and expertise gained through a strategic alliance? - Correct Answer-A reduction in the risk of development In addition to sharing the financial risk, what was one of the advantages Boeing gained when forming a partnership with Japanese firms to build the Boeing 777 jet? - Correct Answer-Increased ability to sell to Japanese customers Which of the following is NOT a type of functional alliance? - Correct Answer-Resource alliance A production alliance would be defined as which of the following? - Correct Answer-The forming of an alliance to provide services in a shared facility. What is the advantage that incorporation in the Bahamas offers joint ventures? - Correct Answer-Taxation CBA CBA In a limited partnership, one firm will ___________________. - Correct Answer-rely on the other firm(s) to assume full financial responsibility Why is loss of autonomy a pitfall of a strategic alliance? - Correct Answer-The alliance limits what each member can do. Although the benefits to a strategic alliance can be multiple, there are also several pitfalls, which include ________. - Correct Answer-incompatibility of partners Which of the following accurately describes the relationship of product positioning to market attractiveness? - Correct Answer-A firm specializing in low-priced, lower-quality goods will find more market potential in a poorer market. What should a firm consider in order to determine the level of competition in a foreign market? - Correct Answer-Individual and collective strengths and weaknesses of all firms competing in the target market. Successful firms continually monitor major markets to exploit opportunities as they become available especially in those markets ______________________. - Correct Answer-undergoing technological or regulatory changes Which of the following is the first step in foreign market selection? - Correct Answer Assessing market potential How do the presence of civil war, corruption, or unstable governments affect mode of entry into a foreign market? - Correct Answer-These factors discourage firms from devoting significant resources to a foreign market. Of the following, which is NOT among the factors a firm must consider in assessing alternative foreign markets? - Correct Answer-Past history of market size The informational, political, and cultural disadvantages that foreign firms face when trying to compete against local firms in the host country market is referred to as ________. - Correct Answer-liability of foreignness In addition to governmental policies, marketing concerns, logistical considerations, and distribution issues, what else must a firm consider when choosing exporting as its entry mode? - Correct Answer-Which form of exporting to use Which of the following explains the difference between reactive and proactive motivations for exporting? - Correct Answer-Reactive motivations stem from decreased opportunities in a market, whereas proactive motivations stem from opportunities available in a market. Which of the following is FALSE about export management companies (EMC)? - Correct Answer-Most EMCs are very large operations. CBA CBA Which of the following is FALSE about a Webb-Pomerene association? - Correct Answer-Webb-Pomerene associations have played a major role in international business. The sale of goods by a firm in one country to an affiliated firm in another country is known as ________. - Correct Answer-an intra-corporate transfer What is the term used to describe when a firm sells its product to a domestic customer, which in turn exports the product, in either its original form or a modified form? - Correct Answer-Indirect exporting Which of the following is NOT considered to be an intermediary? - Correct Answer-Joint venture Which of the following is NOT considered an advantage of franchising for the franchisor? - Correct Answer-Creates dependence on the franchisee Which of the following is NOT considered an advantage of foreign direct investment? - Correct Answer-High financial and managerial investments What action is necessary for a licensor to ensure relatively minimal risk when contracting with a licensee? - Correct Answer-Fully investigate market opportunities as well as the capabilities of the potential licensee Which of the following types of market entry are most closely related? - Correct Answer Franchising and licensing When a franchisee signs a franchise contract, they are likely to be required to agree to which of the following? - Correct Answer-Requirements for financial reporting Which of the following ventures would be an example of a turnkey project? - Correct Answer-An airport Which of the following is an agreement whereby one firm provides managerial assistance, technical expertise, or specialized services to a second firm for some agreed-upon time in return for monetary compensation? - Correct Answer-Management contract Which strategy is used by firms, both large and small, that outsource most or all of their manufacturing needs to other companies? - Correct Answer-Contract manufacturing Which of the foreign market entry strategies is MOST complex? - Correct Answer Foreign direct investment CBA CBA When host country customers prefer to deal with a local factory, which form of foreign market entry is preferred? - Correct Answer-Either acquisition or greenfield strategy Which strategy involves starting a new operation from scratch? - Correct Answer Greenfield When expanding into a market, a firm must consider what type of data? - Correct Answer-Objective and subjective To reduce risk associated with socio-cultural differences in markets, firms will likely initially expand into ________ markets. - Correct Answer-culturally similar Tangible or intangible resources owned by a firm that grant it a competitive advantage over industry rivals is known as what? - Correct Answer-Ownership advantage Internalization advantages are those that make it desirable for a firm to do what? - Correct Answer-Produce a good itself. When a company sells to a customer, either an end-user or a distributor, outside of the home country, it is engaged in ________ exporting. - Correct Answer-direct Intracorporate transfer is a form of what? - Correct Answer-Exporting Which of the following issues does a licensor address when it establishes rights, privileges, and constraints? - Correct Answer-Type and form of records kept Licensing carries a relatively low financial risk for the licensor, if ________. - Correct Answer-it fully investigates market opportunities A person who operates a business under the name of another is called a(n) ________. - Correct Answer-franchisee One constraint that limits the growth of an international franchise is ________. - Correct Answer-the level of interest shown by foreign investors A B-O-T project is a variant of which specialized international business entry mode? - Correct Answer-Turnkey project What is it called when a firm provides managerial assistance, technical expertise, or specialized services to a second firm for an agreed-upon time for monetary compensation? - Correct Answer-Management contract Which of the following is an advantage of the greenfield strategy of foreign direct investment (FDI)? - Correct Answer-Communities often offer economic development incentives to attract this type of facility. CBA CBA Which of the following is a benefit to using the acquisition strategy of foreign direct investment (FDI)? - Correct Answer-The acquired firm can continue to generate revenues. To survive in today's global market, firms must be able to quickly do which of the following? - Correct Answer-Exploit opportunities presented Of the following, which is NOT among the four basic components of strategy development following strategic planning? - Correct Answer-Competitive superiority Which strategy involves the firm utilizing the core competency or firm-specific advantage it developed at home as its main competitive weapon in the foreign markets it enters? - Correct Answer-Home replication strategy You are working in a foreign branch of a large corporation and need to gain some insights into different strategies based on local practices. Which of the following strategies would be best for this practice? - Correct Answer-Transnational strategy You are in a large corporation and work at its corporate headquarters. However, research and development is spread out through five different plants. Each plant specializes in a separate product. Which of the following strategies is in effect? - Correct Answer-Transnational strategy Which of the four basic components of strategy development needs to answer the question "Where are we going to conduct business?" - Correct Answer-Scope of operations You are working on expanding your corporation and need to set up the framework for achieving the goals. Which of the following would you work on? - Correct Answer Strategic planning Which of the four basic components of strategy development needs to answer the question "How can different elements of our business benefit each other?" - Correct Answer-Synergy Which of the four basic components of strategy development needs to answer the question "What do we do exceptionally well, especially compared to our competitors?" - Correct Answer-Distinctive competence Of the following, which is most closely tied to the firm's distinctive competence? - Correct Answer-Scope of operations The final aspect of strategy formulation is the development of a(n) __________________. - Correct Answer-control framework CBA CBA Which of the following is the second step in international strategy formulation? - Correct Answer-Performing a SWOT analysis Your company completed its SWOT analysis and has set some strategic goals. You would now like to create a plan for implementing these goals. Which stage are you in? - Correct Answer-Tactics Which of the following would be an example of the use of a value chain? - Correct Answer-Assessing employee skills Which of the following terms is used to describe the major objectives the firm wants to accomplish? - Correct Answer-Strategic goals Given the nature of international business and strategic management, most corporations attempt to develop distinct levels of management within the organization. Of the following, which represent those levels? - Correct Answer-Corporate, business, and functional A&D is a Mexican cell phone manufacturer. After exploring the U.S. market and Canada, the company is now interested in selling its products in Brazil. Company executives are currently debating whether to price its cell phones in Brazil higher than what it charges its current consumers. A&D plans to set up a subsidiary to oversee operations. Which of the following, if true, will weaken the argument for a higher price than what current customers are charged? - Correct Answer-Brazilian consumers do not perceive A&D's offerings as premium products. What are the three levels of strategy for a multinational corporation (MNC)? - Correct Answer-Business, functional, and corporate You own a series of upscale boutiques that sells make-up and hair products. You have just expanded to include body lotions and foot creams. Which of the following concepts is in effect? - Correct Answer-Related diversification You are interested in improving employee productivity in your corporation. You want to ensure that the organization is well trained and motivated. Which of the following strategies are you focusing on? - Correct Answer-Human resources Which of the following strategies calls for a firm to focus on achieving highly efficient operating procedures so that its costs are lower than its competitors? - Correct Answer Overall cost leadership You are dealing with the creation of the firm's products or services and decisions on such issues as sourcing, plant location, plant layout and design, technology, and inventory management. Which of the following strategies are you focused on? - Correct Answer-Operations CBA CBA Which of the following is the MOST common strategy used by international firms? - Correct Answer-Related diversification Which of the following strategies calls for a firm to rely on a single business, product, or service for all its revenue?= - Correct Answer-Single business strategy Which of the following strategies is for a firm that operates in several unrelated industries and markets? - Correct Answer-Unrelated diversification What is it called when firms improve their efficiency through location efficiencies, using economies of scale and using economies of scope? - Correct Answer-Global efficiencies Which of the following companies was particularly successful at designing a product that will remain standard from one market to the next, including international markets? - Correct Answer-IKEA Which two strategic alternatives, share the similarity of a firm conducting business the same way anywhere in the world? - Correct Answer-Home replication and global To survive in today's global market, firms must be able to exploit what they do exceptionally well as compared to their competitors. This advantage is known as a ___________. - Correct Answer-distinctive competence During what step does a firm clarify the organization's purpose, values, and directions? - Correct Answer-During the mission statement formulation Devising the means to achieve strategic goals and to guide the firm's daily activities represents what step in the international strategy formulation? - Correct Answer Developing tactical goals and plans What is a value chain used for? - Correct Answer-To identify competitive advantages and disadvantages If a firm has a specialized business designed to replace a particular part in major oil well rigs and does not vary from this part because it is a necessary part that requires a great deal of time and expertise to create, which corporate strategy would work BEST for the firm? - Correct Answer-Single-business If a chain of themed food restaurants wants to expand into foreign markets by adding museums and hotels to the restaurants to create large complexes, which business strategy is it following? - Correct Answer-Related diversification Since the end of World War II, the General Agreement on Tariffs and Trade (GATT) negotiations have resulted in a dramatic growth in world trade largely due to ____________. - Correct Answer-a substantial reduction of tariffs CBA CBA Which of the following describes an acceptable exemption to the most favored nation (MFN) principle? - Correct Answer-The United States lowers tariffs on electronic parts manufactured in Mexico and Canada to increase trade among NAFTA members. Which of the following is FALSE regarding Mexico's economic policies from 1917 to 1982? - Correct Answer-Mexico joined the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). In 1930 the United States raised tariffs on imported goods in an effort to protect domestic industries. Which of the following was NOT a result of this economic policy? - Correct Answer-A competitive trading environment benefiting efficient producers With which piece of legislation did the United States seek to protect domestic industries from competition by raising tariffs? - Correct Answer-Smoot-Hawley Tariff Act Which trade agreement is designed to eliminate or suppress trade? - Correct Answer CITES Which of the following statements is TRUE of a common market? - Correct Answer-It establishes external trade policies toward nonmembers, eliminates internal trade barriers, and eliminates the controls on the free movement of labor, capital, and technology internal trade barriers among members. As the head of an individual firm, what feature would be the LEAST beneficial should your country become a member of a regional economic bloc? - Correct Answer-The effect of economic integration on specific sectors within the national economy Which of the following forms of economic integration encourages trade among its members by eliminating trade barriers? - Correct Answer-Free trade area Which of the following forms of economic integration combines the elimination of internal trade barriers among its members with the adoption of external trade policies toward nonmembers, but does not eliminate barriers that inhibit the movement of factors of production—labor, capital, and technology—among its members? - Correct Answer Customs union Which of the following forms of economic integration eliminates internal trade barriers among its members with the adoption of common external trade policies toward nonmembers? - Correct Answer-Common market Which of the following forms of economic integration represents full integration of the economies of two or more countries? - Correct Answer-Economic union CBA CBA Which of the following forms of economic integration is the complete political as well as economic integration of two or more countries, thereby effectively making them one country? - Correct Answer-Political union Which of the following is FALSE regarding the European Council? - Correct Answer-It became an official EU institution in 1974. You want to expand your dessert business by selling your trademark chocolates to other countries in the European Union. A French department store cancels a large order stating that the butter fat content of your truffles is too low according to established French standards. The department store cannot refuse to sell your product for that reason because of ________. - Correct Answer-the concept of mutual recognition While the benefits for European business in creating a common market are substantial, the European Union still faces many future challenges as illustrated by the demise of the constitution drafted at the 2002 European Convention. Which of the following best summarizes the MOST fundamental challenge of the EU's future success and effectiveness? - Correct Answer-A governance structure that is adequate for effective decision making within the growing EU membership Which is NOT a function of The European Commission? - Correct Answer-It implements the provisions of the Geneva Convention and other EU treaties. Which of the following is NOT an organization that governs the European Union (EU)? - Correct Answer-World Trade Organization __________________________were developed because the architects of the EMU believed that its members needed them if the union was to be successful. - Correct Answer-Convergence of the economic policies Which of the following is NOT one of the convergence criteria required of any EU member wishing to adopt the euro? - Correct Answer-A country's government budget deficit must be no more than 50 percent of its GDP. Which of the following is FALSE regarding the European Union (EU)? - Correct Answer Every member of the EU uses the euro as its official currency. Negotiators discussing the North American Free Trade Agreement (NAFTA) were concerned about screwdriver plants. What is a screwdriver plant? - Correct Answer-A factory in which very little transformation of a product is undertaken. Which of these major trading blocs has the strictest policy concerning rules of origin on manufactured goods? - Correct Answer-North American Free Trade Agreement (NAFTA) CBA CBA Which of the following was NOT one of the factors that ultimately led to the establishment of the Australia-New Zealand Closer Economic Relations Trade Agreement (CER)? - Correct Answer-For most of their histories, Australia and New Zealand were trade partners. What factor could account for Canada and the United States having modest economic gains, while Mexico's gains have been dramatic? - Correct Answer-The previous bilateral trading relationship between Canada and the United States. Firms sometimes believe that foreign competitors gain an unfair advantage due to which of the following? - Correct Answer-Government policies An international corporation is in favor of a level playing field in foreign trade policy. Which of the following would be a preference? - Correct Answer-Advocating for limited foreign competition You are developing new technology that will benefit your local area if exports are profitable. There are very few companies in competition, and it is very expensive to produce. Your government decides to provide support through tariffs and subsidies. What is this an example of? - Correct Answer-Strategic trade theory Which of the following terms describes a policy for national governments that exert minimal influence over trade? - Correct Answer-Free trade A major international corporation has steadily bought up all of a certain resource so they control it. Because they have done this, they are the only corporation manufacturing and marketing the finished product. Which of the following is occurring? - Correct Answer Monopoly profit What is the term used to describe when a national government identifies key domestic industries critical to the country's economic future and then formulates programs that promote their competitiveness? - Correct Answer-Industrial policy Which of the following was one of the industries that the Obama administration designated to receive increased R&D support? - Correct Answer-Renewable energy Which of the following terms describes a policy for national governments that actively intervene to ensure that domestic firms' exports receive an equitable share of foreign markets? - Correct Answer-Fair trade _______________________ may be imposed by a country to trade in the form of numerical limits on the amount of a good it will export. - Correct Answer-Quantitative barriers Which of the following have traditionally been used to protect politically powerful industries? - Correct Answer-Quotas CBA CBA You would like to market rare earth technologies, yet you are not able to obtain them for a reasonable price. Why is this? - Correct Answer-Numerical export controls Canada has imposed a specific tariff on imports of motorcycle parts from the U.S. Why did it do this? - Correct Answer-To create a larger demand for Canadian motorcycle parts The U.S. and Canada are friendly trade nations that do not want to damage their relations. They both import and export each other's products in large volume and recognize that the potential for problems exists. What could they put in place to help with this? - Correct Answer-Voluntary export restraint China requires that imported sugar and petroleum be distributed only by state-owned trading enterprises, while Indonesia granted exclusive rights to import rice to a state agency. This is an example of what type of nonquantitative NTB? - Correct Answer Restricted access to distribution networks Singapore uses a tiered tax system based on engine displacement, which hurts the sales of large motorcycles. Taiwan's transportation ministry has been slow to issue regulations that would allow motorcycles with engines larger than 500cc to travel on its highways throughout the day, while Thailand has an outright ban of motorcycles on its highways. This is an example of what type of non-quantitative NTB? - Correct Answer Regulatory controls South Korea requires that its National Intelligence Service certify any telecommunications network equipment incorporating encryption technology, while Russia similarly limits the importation of any product using encryption technology. This is an example of what type of non-quantitative NTB? - Correct Answer-Product and testing standards China requires that all travel agents and Chinese airlines use China's state-owned reservation service when booking flights. Kazakhstan mandates that oil companies purchase any necessary services from Kazakh-owned companies. India has historically limited foreign participation in its retailing sector. These are examples of what type of non-quantitative NTB? - Correct Answer-Local-purchase requirements Egypt gives state-owned enterprises a 15 percent bidding preference on public contracts, while Argentina grants domestically owned firms a 5 to 7 percent preference; Turkey, a 15 percent preference; Thailand, 7 percent; and Paraguay, 20 percent. Russia grants local firms a 15 percent preference on pharmaceutical contracts, while Kenya's Public Procurement and Disposal Act requires that certain government contracts be given only to Kenyan citizens. These are examples of what type of non quantitative NTB? - Correct Answer-Public-sector procurement policies CBA CBA The Philippines restricts foreign ownership in advertising to 30 percent and in telecommunications to 40 percent, while foreigners can own no more than 49 percent of local accounting firms in Thailand and 50 percent of Korean power generators. These are examples of what type of non-quantitative NTB? - Correct Answer-Investment controls The National Bank of Ethiopia often makes it difficult for importers to obtain scarce foreign exchange, although state-owned enterprises or firms controlled by the ruling party normally have no such problems. This is an example of what type of nonquantitative NTB? - Correct Answer-Currency controls Which of the following statements is FALSE regarding subsidies? - Correct Answer Subsidies can never be so large as to affect the normal pattern of international trade. Which of the following can be used to help in the economic development of smaller nations? - Correct Answer-foreign trade zone (FTZ) Which of the following is an ad valorem tariff on an imported good that is imposed by the importing country to counter the impact of foreign subsidies?= - Correct Answer Countervailing duty (CVD) Which of the following countries uses the International Trade Administration (ITA) to investigate complaints of unfair trade practices? - Correct Answer-United States One country is selling computers for $650 U.S. dollars locally, but $300 in foreign markets. What is this an example of? - Correct Answer-Dumping When a government uses tariffs to subsidize and support a firm's efforts to produce a new and expensive technology, what is this an example of? - Correct Answer-Strategic trade theory Which of the following indicates trade where the government exerts minimal influence? - Correct Answer-Free trade Which of the following suggests the national government should actively intervene to ensure that domestic firms' exports receive an equitable share of foreign markets and that imports are controlled in order to minimize the losses in specific industries of jobs and market share? - Correct Answer-An international corporation is in favor of a level playing field in foreign trade policy. Which of the following would be a preference? What year did Japan announce a voluntary export restraint (VER) program that would limit U.S.-bound exports of Japanese cars to 1.68 million? - Correct Answer-1981 What percentage of the world's rare earth production is accounted for by China? - Correct Answer-Over 90 percent CBA Which of the following is NOT a nontariff barrier used by countries to protect themselves from foreign competition? - Correct Answer-Harmonized tariff schedule What state in the United States agreed to provide Toyota and Mazda with $350 million in incentives to capture their joint assembly plant? - Correct Answer-Alabama In what country serving the North American market did NAFTA eliminate much of the foreign trade zone? - Correct Answer-Mexico Which of the following provides political risk insurance? - Correct Answer-OPIC If a firm sells its goods below cost in a foreign market, it is engaged in _________. - Correct Answer-dumping Which of the following countries uses the ITA to investigate complaints of unfair trade practices? - Correct Answer-the United States CBA