1. An import is a product made or grown abroad but sold domestically.
*A) True
B) False
2. Low-income countries have an annual per capita income of $2,500 or less.
A) True
*B) False
3. The World Trade Organization (WTO) was created to encourage international
trade.
*A) True
B) False
4. In a licensing arrangement, firms choose foreign organizations to manufacture
their products in another country in return for a fee plus royalties.
*A) True
B) False
5. Free market economies often establish some system of quotas and/or tariffs.
*A) True
B) False
1
,6. A subsidy is a tax designed to help companies who import products.
A) True
*B) False
7. Local content laws guarantee that products sold in a country are at least partly
made there.
*A) True
B) False
8. Globalization refers to the process by which countries around the world are
becoming more self-sufficient.
A) True
*B) False
9. NAFTA regulates trade between the United States, Europe, and Japan.
A) True
*B) False
10. The purpose of the General Agreement on Tariffs and Trade is to reduce trade
barriers.
*A) True
B) False
2
,11. The primary purpose of the World Trade Organization is to impose tariffs on
imported products.
A) True
*B) False
12. If the United States exports more to the Netherlands than it imports from the
Netherlands, the United States has a trade deficit with the Netherlands.
A) True
*B) False
13. Today, fixed exchange rates are the norm for most major nations of the world.
A) True
*B) False
14. South Africa produces diamonds more cheaply and of higher quality than any
other country; this is an example of absolute advantage.
*A) True
B) False
15. Saudi Arabian oil is an example of an absolute advantage.
*A) True
B) False
3
, 16. A comparative advantage exists when a country can produce something more
cheaply and/or of higher quality than any other country.
A) True
*B) False
17. Transportation costs have relatively little impact on a domestic firm's decision
to go international, compared to other possible factors.
A) True
*B) False
18. International firms conduct a good deal of their business abroad and may
even maintain overseas manufacturing facilities.
*A) True
B) False
19. If you have given another company in another country the right to produce
your company's product, you are engaging in a licensing arrangement.
*A) True
B) False
4
*A) True
B) False
2. Low-income countries have an annual per capita income of $2,500 or less.
A) True
*B) False
3. The World Trade Organization (WTO) was created to encourage international
trade.
*A) True
B) False
4. In a licensing arrangement, firms choose foreign organizations to manufacture
their products in another country in return for a fee plus royalties.
*A) True
B) False
5. Free market economies often establish some system of quotas and/or tariffs.
*A) True
B) False
1
,6. A subsidy is a tax designed to help companies who import products.
A) True
*B) False
7. Local content laws guarantee that products sold in a country are at least partly
made there.
*A) True
B) False
8. Globalization refers to the process by which countries around the world are
becoming more self-sufficient.
A) True
*B) False
9. NAFTA regulates trade between the United States, Europe, and Japan.
A) True
*B) False
10. The purpose of the General Agreement on Tariffs and Trade is to reduce trade
barriers.
*A) True
B) False
2
,11. The primary purpose of the World Trade Organization is to impose tariffs on
imported products.
A) True
*B) False
12. If the United States exports more to the Netherlands than it imports from the
Netherlands, the United States has a trade deficit with the Netherlands.
A) True
*B) False
13. Today, fixed exchange rates are the norm for most major nations of the world.
A) True
*B) False
14. South Africa produces diamonds more cheaply and of higher quality than any
other country; this is an example of absolute advantage.
*A) True
B) False
15. Saudi Arabian oil is an example of an absolute advantage.
*A) True
B) False
3
, 16. A comparative advantage exists when a country can produce something more
cheaply and/or of higher quality than any other country.
A) True
*B) False
17. Transportation costs have relatively little impact on a domestic firm's decision
to go international, compared to other possible factors.
A) True
*B) False
18. International firms conduct a good deal of their business abroad and may
even maintain overseas manufacturing facilities.
*A) True
B) False
19. If you have given another company in another country the right to produce
your company's product, you are engaging in a licensing arrangement.
*A) True
B) False
4
