question

A group of nations in a geographic area undergoing economic integration is called a ________.

answer

Regional trading bloc

question

A group of fifty-three nations on the African continent joined forces in 2002 to create the ________.

answer

African Union

question

For countries to become members of the European Union, they have to meet certain demands laid down by the EU referred to as the ________.

answer

Copenhagen Criteria

question

The common currency of the European Union is known as the ________.

answer

Euro

question

The least amount of sovereignty that must be surrendered to a trading bloc occurs in a ________.

answer

Free trade area

question

Which of the following countries is a member of the North American Free Trade Agreement (NAFTA)?

answer

Canada

question

Which of the following is the lowest extent of regional economic integration?

answer

Free trade area

question

________ require that member countries concede a certain amount of their national autonomy to the supranational union of which they are a part.

answer

Economic unions

question

The Court of Justice is the ________ of the European Union.

answer

Court of appeals

question

The Free Trade Area of the Americas (FTAA) is a trade agreement ________.

answer

that has been proposed to create the largest free trade area on the planet

question

An exchange rate of ¥117.87/$ indicates ________.

answer

that 117.87 yen buys one dollar

question

An offshore financial center is usually characterized by

answer

excellent telecommunications

question

Company debt normally takes the form of ________.

answer

bonds

question

Eurobonds are popular because ________.

answer

governments of nations in which they are sold do not regulate them

question

Investors use the foreign exchange market for

answer

currency speculation

question

The absence of government regulation in the Eurobond market

answer

substantially reduces the cost of issuing a bond

question

The exchange rate at which a bank will purchase a currency is called a __________ rate

answer

buy

question

The purchase or sale of a currency with the expectation that its value will change and generate a profit is called

answer

currency speculation

question

_______ is the simultaneous purchase and sale of foreign exchange for two different dates.

answer

Currency Swap

question

Foreign bonds issued in the U.S. are called ________.

answer

yankee bonds

question

A company selling in a country with a strong currency while sourcing from a country with a weak currency ________.

answer

improves its profits

question

According to the efficient market view, future exchange rates are most accurately forecasted by ________.

answer

forward exchange rates

question

In the earliest days of international trade, ________ was the internationally accepted currency for payment of goods and services.

answer

gold

question

The calculation of each currency's par value under the gold standard was based on the concept of ________.

answer

purchasing power parity

question

The lowering of taxes in the U.S. by its government is an example of the ________.

answer

fiscal policy

question

The World Bank was created by the ________.

answer

Bretton Woods Agreement

question

To cool off an inflationary economy, a government might ________.

answer

raise interest rates

question

Today's international monetary system is considered to be a ________ system.

answer

managed float

question

When a country's currency is weak, the price of its ________

answer

exports on world markets declines and the price of its imports increases

question

Which of the following is a reason for the failure of PPP to predict exchange rates accurately?

answer

PPP assumes no barriers to international trade while predicting exchange rates

question

business-level strategy in which a company exploits economies of scale is called a ________.

answer

low-cost leadership strategy

question

A company that is selling unprofitable business units is most likely following a ________ strategy.

answer

retrenchment

question

A team of top managers from both headquarters and international subsidiaries who meet to develop solutions to company-wide problems is referred to as a ________ team.

answer

global team

question

A ________ team is one composed of employees who work at similar levels in different operative departments in an organization.

answer

cross-functional

question

An organizational structure that organizes a company's entire global operations into countries or geographic regions is referred to as a(n) ________ structure.

answer

international alrea

question

Decentralized decision making is beneficial when ________.

answer

fast-changing national business environments put a premium on local responsiveness

question

Global products are most commonly seen in industries where there is ________.

answer

significant price competition

question

Organic growth refers to an organization's corporate strategy that relies on growth ________.

answer

generated internally

question

Which of the following statements is true of objectives?

answer

Objectives become more precise at the level of individual departments

question

Which of the following statements is true of the environmental forces that affect strategy formulation?

answer

approval of the host government is almost always necessary for making direct investments

question

A designated geographic region in which merchandise is allowed to pass with lower customs duties and/or fewer custom procedures is called a(n) ________.

answer

foreign trade zone

question

A restriction on the amount of a good that can enter or leave a country during a certain period of time is called a(n) ________.

answer

quota

question

Financial assistance given to domestic producers in the form of cash payments is an example of a(n) ________.

answer

subsidy

question

In which of the following ways did the Uruguay Round of Negotiations modify the original General Agreement on Tariffs and Trade (GATT) treaty?

answer

It helped standardize intellectual property rules around the world

question

One of the main goals of the World Trade Organization is to ________.

answer

settle trade disputes among its members

question

Purposely understaffing customs offices to cause time delays, requiring special licenses that take a long time to obtain, and requiring air carriers to land at inconvenient airports are all examples of ________.

answer

administrative delays

question

The purpose of ________ is to force companies from other nations to use local resources in their production processes, particularly labor.

answer

local content requirements

question

Which of the following best describes the infant industry argument?

answer

It states that a country's emerging industries need protection from international competition during their development until they become sufficiently competitive

question

Which of the following statements is true of embargoes?

answer

an embargo may be placed on one or a few goods or may completely ban trade in all goods

question

________ refers to the unwanted cultural influence in a nation that can cause great distress and lead governments to block imports it believes to be harmful.

answer

Cultural imperialism

question

A home country encourages outflows of foreign direct investment because it ________.

answer

tends to increase the long-term competitiveness of firms

question

According to the international product life cycle theory, in which of the following stages is a good produced in the home country because of uncertain domestic demand and to keep production close to the research department?

answer

new product stage

question

Home nations discourage foreign direct investment outflows because it ________.

answer

replaces jobs in the home nation

question

The purchase of physical assets or a significant amount of ownership of a company in another country to gain a measure of management control is called ________.

answer

foreign direct investment

question

When a U.S. company buys shares of stock in a French company on France's stock market, the U.S. balance of payments records the transaction as an ________.

answer

outflow of capital with a minus sign

question

Which of the following is a major driver of foreign direct investment?

answer

globalization

question

Which of the following is used by home country governments to limit outbound foreign direct investment?

answer

differential tax rates

question

What two factors propel growth in foreign direct investment?

answer

globalization and mergers and acquisitions

question

A country's ________ is a national accounting system that records all monetary transactions to entities in other countries and all receipts coming into the nation.

answer

balance of payments

question

Scenario: Happyland Happyland is a country characterized by beautiful beaches, vast natural resources, and a highly skilled labor force. Happyland is now encouraging foreign direct investment flows. The country has been exporting textiles, computer hardware, and software programs. The net result of the trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad. If Happyland advertises its beaches and attracts tourists, the tourism-related income would be recorded in its ________ account.

answer

services

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