The Business Environment Test 2

Question 1(1 point)

Imports are

Question 1 options:

services that are created in Canada and sold abroad.

products that are made or grown abroad and sold in Canada; services cannot be imported.

goods and services that are made or grown in Canada and sold abroad.

products that are made or grown in Canada and sold abroad; services cannot be imported.

goods and services that are made or grown abroad and sold in Canada.

Question 2(1 point)

Which of the following is an example of importing a service?

Question 2 options:

A Canadian purchases a ticket to see a performance by a Spanish singer.

A Toronto taxi driver takes an American from Pearson airport to a downtown Toronto hotel.

A Canadian engineer designs a bridge to be built in Australia.

An accountant does financial statements for a Mexican company.

A Canadian lawyer goes to California to work on a litigation case.

Question 3(1 point)

The annual volume of world trade is about

Question 3 options:

$100 billion.

$3 trillion.

$875 billion.

$17 trillion.

$8 trillion.

Question 4(1 point)

The major reasons why Mexico has recently become a major manufacturing centre are

Question 4 options:

cheap labour and low transportation costs.

elimination of quotas and tariffs and low tax rates.

low tax rates and cheap labour.

cheap labour and elimination of quotas and tariffs.

low transportation costs and low tax rates.

Question 5(1 point)

Which areas represent the three major market places for international business?

Question 5 options:

North America, South America, and Asia-Pacific

North America, Europe, and Asia-Pacific

South America, Africa, and Asia-Pacific

South America, Europe, and Africa

Asia-Pacific, Europe, and Africa

Question 6(1 point)

With regard to the BRICS nations, it is correct to say that

Question 6 options:

they all emphasize the export of raw materials.

they all have a low level of industrialization at the moment but are progressing rapidly.

Russia is the strongest in terms of manufacturing.

Brazil is strong in agriculture and commodities.

All of these statements are correct.

Question 7(1 point)

The absolute advantage form of competitive advantage means

Question 7 options:

that a country does not belong to any free trade agreements.

that a country can produce everything better or more cheaply than any other country.

that a country can produce some products better or more cheaply than it can others.

that a country is the sole supplier of a product or service.

that a country can produce something better or more cheaply than any other country.

Question 8(1 point)

Which of the following is correct with respect to absolute and comparative advantage?

Question 8 options:

Brazilian coffee beans are a good example of comparative advantage.

Absolute advantage exists when a country can produce something more cheaply and/or of higher quality than the next three most efficient countries.

A country has a comparative advantage when it can produce a product more efficiently or better than most (but not all) other countries.

All countries have a comparative advantage in some products.

All of these are correct.

Question 9(1 point)

Canada has a(n) ________ in farming due to its fertile land, while South Korea has a(n) ________ in electronics manufacturing.

Question 9 options:

absolute advantage; absolute advantage

absolute advantage; comparative advantage

comparative advantage: absolute advantage

comparative advantage; comparative advantage

none of these

Question 10(1 point)

The difference between absolute and comparative advantages is that absolute advantage is relative to ________, while comparative advantage is relative to ________.

Question 10 options:

other nations; activity inside the country

similar industries; dissimilar industries

similar products; dissimilar products

activity inside the country; other nations

dissimilar products; similar products

Question 11(1 point)

The theory of national competitive advantage comes from all of the following conditions except

Question 11 options:

demand conditions.

supply conditions.

strategies, structures, and rivalries.

related and supporting industries.

factor conditions.

Question 12(1 point)

All of the following are included in the balance of payments except

Question 12 options:

money paid for imports.

money paid by domestic corporations for taxes.

money spent by tourists.

money spent on foreign aid.

money paid for exports.

Question 13(1 point)

As the value of a country's currency rises,

Question 13 options:

domestic companies will have a harder time selling their products in foreign markets.

foreign companies will find it harder to sell their products in local markets.

imports and exports will remain relatively constant.

domestic companies will shift from the production of consumer goods to the production of industrial goods.

all of these will happen.

Question 14(1 point)

Which of the following best describes a positive trade balance?

Question 14 options:

The economic condition in which a country's exports exceed its imports

The economic condition in which a country's imports exceed its exports

The economic condition in which a country's inflow of money exceeds its outflow

The economic condition in which a country's outflow of money exceeds its inflow

The economic condition in which a country's natural resources exceed its human resources

Question 15(1 point)

The balance of trade that Canada has experienced has been

Question 15 options:

evenly split between favourable and unfavourable with about a seven-year cycle for the past fifty years.

unfavourable since Confederation.

favourable for most of the last four decades but in the past few years significant deficits and smaller surpluses have been recorded.

unfavourable for the last 30 years.

favourable since Confederation.

Question 16(1 point)

If the Canadian dollar becomes weak compared to the Japanese yen, which of the following is likely to occur?

Question 16 options:

Demand for goods would be unaffected by currency changes.

Japanese products would become cheaper in Canada.

It would take fewer dollars to buy the same number of yen.

Canadian products would become less expensive in Japan.

Japanese demand for goods from Canada would fall.

Question 17(1 point)

What is an expected result when a nation devalues its currency?

Question 17 options:

Export sales of its products decline.

The number of independent agents declines.

Export sales of its products increase.

No result is more likely than any other.

Export sales of its products will be unchanged.

Question 18(1 point)

Saved

Beta Corp. is trying to decide whether to market its products internationally. Its first decision is to

Question 18 options:

determine what the costs would be.

check the business climate to see if the foreign country would be positive.

check the competition to see what its situation would be.

determine whether there is international demand for its products.

check the exchange rates to see if they are favourable.

Question 19(1 point)

Marina Corp. wants to "go international," and has already determined that there is international demand for its products. What should the company do next?

Question 19 options:

Determine if their products need to be modified to fit the foreign market

Assess the business climate for reaction to foreign products

Locate a local business to form a joint venture

Conduct market research to determine potential sales

Determine what competition would be encountered

Question 20(1 point)

McCain Foods developed single-sized portions of frozen vegetables to serve customers in South Africa that do not have proper refrigeration. This is an example of

Question 20 options:

determining whether there is international demand for a product.

modifying a product to fit a foreign market.

determining the receptivity of a foreign market for a company's product.

acquiring the necessary skills to do business abroad.

bootstrapping.

Question 21(1 point)

KFC's dishes in China come with a side order of rice and soy milk. This is an example of

Question 21 options:

over-expansion without support for repairing the product.

adapting to customer needs.

misreading demand for the product.

overpricing caused by exchange rate changes.

a poor business environment for foreign goods.

Question 22(1 point)

Clement is the owner of Dills Distillery, which makes and bottles fruit wine. In his planning to export the wine, Clement should consider all of the following except

Question 22 options:

the target country's balance of trade.

demand for the wine.

legal aspects of the target country.

cultural aspects of the target country.

economic road blocks.

Question 23(1 point)

________ is an example of an export of a service.

Question 23 options:

An advertising agency in Montreal making a TV commercial for a company in France

Obtaining information from a foreign database

Vacations taken by Canadians in a foreign country

Purchasing a smartphone made in China

A Canadian tourist having a camera repaired in Egypt

Question 24(1 point)

According to the World Bank, ________ are high-income countries, while ________ are upper middle-income countries.

Question 24 options:

Australia, Japan, and Israel; China, Argentina, and South Africa

China, Colombia, and Lebanon; Armenia, Guatemala, and Vietnam

Argentina and South Africa; Colombia, Lebanon, and Turkey

Colombia, Lebanon, and Turkey; Australia, Japan, South Korea

Canada, the United States, and most countries in Europe; Kuwait, the United Arab Emirates and Oman.

Question 25(1 point)

What is a difference between an international firm and a multinational firm?

Question 25 options:

Multinational firms design, produce, and market products in many nations, whereas international firms are based primarily in one nation.

International firms design, produce, and market products in many nations, whereas multinational firms are based primarily in one nation.

There is very little difference between International and multinational firms.

Multinational firms are concerned primarily with foreign markets, whereas international firms are concerned primarily with the domestic market.

International firms are concerned primarily with foreign markets, whereas multinational firms are concerned primarily with the domestic market.

Question 26(1 point)

A firm that buys products made in another country for distribution and sale in its own country is

Question 26 options:

a multinational firm.

a joint venture.

an exporter.

an international firm.

an importer.

Question 27(1 point)

Which type of firm is one in which management doesn't think of itself as having domestic and international operations but rather as a firm that designs, makes, and markets products in many nations?

Question 27 options:

An exporter

An importer

An international firm

A multinational firm

Mininational

Question 28(1 point)

A Canadian company has given exclusive rights to a Swiss company to manufacture its products. This is an example of

Question 28 options:

foreign direct investment.

a licensing arrangement.

a branch office setup.

a strategic alliance.

an import-export relationship.

Question 29(1 point)

When a company sends some of its own managers overseas to conduct business in a local office, this is an example of

Question 29 options:

developing a strategic alliance.

outsourcing.

licensing products.

investing directly in a foreign venture.

opening a branch office.

Question 30(1 point)

With regard to strategic alliances, which of the following is true?

Question 30 options:

They are declining in importance after an initially promising start.

The satisfaction of the most influential party must be assured for it to work.

A clear vision of the future of the venture must be held by at least one of the parties for it to be a success.

Partner compatibility is guaranteed by financial agreements at the outset.

They are also called joint ventures.

Question 31(1 point)

When Bob began exporting his famous barbecue beef, he found that one country would let him bring only 1000 pounds of beef into the country each year. Bob had just discovered a(n)

Question 31 options:

embargo.

local content law.

quota.

tariff.

subsidy.

Question 32(1 point)

Canada prohibits the importing of ivory from any foreign nation. This is a(n)

Question 32 options:

local content law.

subsidy.

tariff.

quota.

embargo.

Question 33(1 point)

Local content laws state that

Question 33 options:

products sold in a country should be at least partially made in that country.

an imported product must meet local standards before it can be brought in.

an imported product must include some raw materials from the domestic country.

an imported product must fit with the local culture before it can be brought in.

an imported product must abide by local bylaws before it can be brought in.

Question 34(1 point)

In some countries, it may be legal to bribe businesses and government officials, but this practice is illegal in Canada. This barrier to international trade is known as

Question 34 options:

imposing tariffs.

quotas.

local content laws.

business practice laws.

cartelling.

Question 35(1 point)

According to the World Bank, Canada, South Korea, and Kuwait are all considered high-income countries.

Question 35 options:

True

False

Question 36(1 point)

International trade is important for manufactured goods, but not for services.

Question 36 options:

True

False

Question 37(1 point)

In 2018, Canada ranked in the top 10 in terms of international competitiveness, as reported by the World Economic Forum.

Question 37 options:

True

False

Question 38(1 point)

Marketing a specific product to two or more countries is relatively easy since it is increasingly the case with globalization that the same marketing strategy will usually work for both countries.

Question 38 options:

True

False

Question 39(1 point)

Exporting activity is limited mostly to multinational firms.

Question 39 options:

True

False

Question 40(1 point)

International firms conduct a significant portion of their business abroad, but their primary focus remains on the domestic market.

Question 40 options:

True

False

Question 41(1 point)

Strategic alliances have declined somewhat in recent years because foreign governments have put up more and more bureaucratic barriers to foreign ownership.

Question 41 options:

True

False

Question 42(1 point)

When Canada placed an extra tax on barbecues made in China because of complaints that the Chinese government was subsidizing their manufacture, this was an example of a tariff.

Question 42 options:

True

False

Question 43(1 point)

The aim of USMCA is to create a free trade area for Canada, the United States, and Western Europe.

Question 43 options:

True

False

Question 44(1 point)

The world economy is changing with emerging markets playing a larger role. However, the world economy continues to revolve primarily around three major marketplaces: North America, Europe, and Asia.

Question 44 options:

True

False