International Business

Key Terms ReviewWork through this review in

preparation for the upcoming exam

Question #1

When is dumping of a good into a importers market acceptable?

When a company is selling off

seasonal items

When an exporting company wants to put someone else

out of business

WRONG

Go back to the question

Correct

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Question #2

Who is the largest recipient of subsidies?

United States car manufactures

United States Farmers

Correct

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Question #3

An organization that attempts to standardize and integrate operation worldwide in all functional areas is a …Multi-Domestic

Company Global Company

Correct

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Question #4

When did NAFTA first take effect

January 1, 2000

January 1, 1994 July 4, 1994

Correct

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Question #5

All forces surrounding and influencing the life and development of a firm are called …

Globally aware Environmental

Correct

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Question #6

What is the biggest cause of international blunders?

Self referencing criterion Foreign Sourcing

Correct

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Question #7

Who is the largest oil producing country not to be a member of OPEC?

Canada Russia

Brazil

Correct

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Question #8

Who was the author of the theory of Comparative Advantage?John Kenneth

Galbraith David Ricardo

Milton Friedman

Correct

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Question #9

With direct foreign investing, a company must invest at a __________ level to obtain significant __________ ___________?

minimal, investment control

sufficient, management control

Correct

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Question #10

When a country produces a product that it has a relative advantage in …

Comparative Advantage

Absolute Advantage

Correct

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Question #11

What is an example of a global company?

Ford Walmart

Correct

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Question #12

OPEC is a group of oil producing countries that work together to set the standard for world oil ________ and ________.

quality, supply prices, supply supply, transportation

Correct

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Question #13

OPEC Controls _____ % of the world’s oil supply?

35% 40% 45%

Correct

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Question #14

The number of units of a currency required to buy the same amounts of goods and services in the domestic market that one dollar would buy in the US is …

Income Index Parity

Purchasing Power Parity

Correct

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Question # 15

Adam Smith is credited with creating the theory of …

Absolute Advantage

Comparative Advantage

Correct

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Question #16

OPEC is made up of 9, Arab only nations?

True False

Correct

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Question #17

Taxes on imported goods for the purpose of raising their price to reduce competition for local producers or stimulate their local production are called …

Tariffs Quotas

Correct

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Question #18

The best judge of Purchasing Power Parity is …

Campbell Seavers Index

Income Ratio Index

Big Mac Index

Correct

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Question #19

Another name for a tariff as a …

Import tax Quota Duty

Correct

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Question #20

The price of one currency stated in terms of another currency is called …

Exchange Rate

Exchange Ratio

Correct

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Question #21

All maquiladora factories have to be within 25 miles of the Unites States border?

FalseTrue

Correct

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Question #22

The goal of a company that practices predatory dumping is to …

Work with overseas

firms

Force domestic producers out of

business

Allow their products to cost more

Correct

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Question #23

Which of the following is not an internal environmental factor?

Capital Physical

Raw Materials

People

Correct

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Question #24

The theory of Absolute Advantage was created by …

Milton Friedman

Adam Smith David Ricardo

Correct

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Question #25

Coke-cola India is an example of a …

Multi-domestic Global International

Correct

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Question #26

A multinational organization designed to deal with rules of trade between nations

IMF World Bank WTO

Correct

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Question #27

An agreement by a small group of nations to establish free trade among themselves while maintaining trade restrictions with all other nations.

Non-binding trade agreement Preferential trading

arrangement

Correct

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Question #28

Internal Environmental Factors are NOT controllable by a company?

True False

Correct

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Question #29

The amount paid on products brought back into the US from a maquiladora is called …

Quota Value Added Duty

Correct

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Question #30

The Heckscher-Ohlin theory is directly related to

Factors of Production

Exchange Rates

Factor Endowment

Correct

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Question #31

Legal, political, and labor are only a few of the _______ environmental factors?

Internal External

Correct

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Question #32

Who is the largest group of people that benefit from subsidies?

US Farmers US Cotton Growers

Brazilian Farmers

Correct

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Question #33

Once a product is made at a maquiladora, it can be sold in Mexico?

True False

Correct

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Question #34

Mexico’s main focus is to keep 1st generation work activity in the country?

True False

Correct

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Question #35

Mexico’s shift away from 1st generation work is because of this country?

ChinaBangladeshUnited State

Correct

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Question #36

Financial contribution, provided directly or indirectly by a government, which confers a benefit; include grants, preferential tax treatment, and government assumption of normal business expenses

Quotas Subsidies

Correct

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Question #37

The main goal of subsidies is to …

Drive domestic producers out of

the market

Increase quotas for imported

goods

Helps to exports or protect imports

Correct

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Question #38

The overseas procurement of raw materials, components, and products

Foreign Investment

Foreign Sourcing

Correct

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Question #39Factor Endowment is a theory that

countries export products requiring large amounts of their _____ production factors and import products requiring large amounts of their _____ production factors

scarce, abundant

abundant, scarce

Correct

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Question #40

Trade restrictions apply only to specific producers and anti-dumping restrictions apply to an entire country’s export firms

True False

Correct

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Question #41

The organization that acts as the world trade referee is the …

World BankUS

Commerce Dept. WTO

Correct

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Question #42

Which is NOT a responsibility of the International Monetary Fund?

orderly correction of balance of payments

problems

Act as a guarantee organization military

loans

balanced expansion of world trade

stability of exchange rates

Correct

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Question #43

Voluntary export restraints are closely associated with …

quotas Orderly Market Arrangements

Subsidies

Correct

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Question #44

NAFTA is a trade agreement between the following …

United States & Mexico

United States & Canada

Mexico & Canada

United States, Canada, Mexico

Correct

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Question #45

An import duty levied as a percentage of the invoice value of imported good

Ad hoc duty Ad valorem duty

Correct

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Question #46

The gain enjoyed by a country because it can produce a product at a lower cost than other countries

Comparative Advantage

Absolute Advantage

Correct

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Question #47

Comparative Advantage allows a country to …

Produce what it can

Produce what it is good at

Correct

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Question #48

With an orderly market agreement, the restriction on international competition is agreed to by the ______?

Importing nation

Exporting nation

Correct

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Question #49

A fixed total amount of a product that can enter a market, regardless of where the product comes from is a …Global Subsidy Global Quota

Absolute Quota

Correct

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Question #50

Which of the following was a founding member of OPEC ?

Libya Venezuela

Russia Angola

Correct

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Question #51

The IMF will loan money to …

Anyone Individual companies

Governments

Correct

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Question #52

Adam Smith felt that _______ should be the main reason why countries trade

Government forces Market forces

Correct

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Question #53

When countries agree to a VER, the main goal is to _______ national markets for local producers

preserve open up

Correct

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Question #54

For a quota to be in effect, it has to have a ________?

Open Ended Period Specific Period

Correct

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Question #55

A quota that allows an importing nation to assign quantities to specific countries is called …

Absolute Quota Allocated Quota

Correct

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Question #56

An absolute quota allows for once a specified amount of a product has been imported, further importations are allowed in on a pro-rated basis?True False

Correct

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Question #57

A trade situation that creates a win-win trade scenario is called …

Absolute Advantage

Comparative Advantage

Correct

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Question #58

An ad valorem duty that is a fixed sum of money for a physical unit is a

Specific Duty Compound Duty

Correct

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Question #59

Which company is the largest user of maquiladora factories is …

Wal-Mart Delphi

General Motors

Correct

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Congratulations!!!!You have completed the short

answer section of the Key Terms Review.I’m done, and don’t need to do any more

I will take a look at the

essay questions

International Business

Hope you have ESP and can lie effectively on the essay

questions.

I’m doneMaybe I should

look at the essay questions

Good Luck with the Test

Potential Essay Questions #1

Explain the maquiladora factory process in detail (you will need to draw a map, and mention a minimum of nine different “concepts”)

Next Essay Question

Potential Essay Questions #2

Explain what “dumping” is. When would it be acceptable? (at least seven different points to note)

Next Essay Question

Potential Essay Questions #3

There will be a five point question about the article from class about “competing in the global marketplace” (i.e. globalization)

Next Slide

Potential Essay Questions #4

How does OPEC have so much power in the global economy? (at least five points)

Next Slide

International Business Class

Make sure that you write down any questions that you have, either about the slide review, essay questions, or about your notes.

Next Slide

Test Statistics Twenty matching questions

Thirty One fill in the blank (no word bank)

Four Essay Questions

Five Bonus QuestionsNext Slide

Good Luck on your test

May the force be with you (don’t

for get to study)