D080 EXAM QUESTIONS AND CORRECT
ANSWERS!!
Which effect does a command economy have on the process of globalization?
A. The government is less flexible, so the globalization process is challenged.
B. The economy is self-sufficient, so the globalization process remains unaffected.
C. The economy is competitive, so the globalization process will be slowed.
D. The government encourages a free market, so the globalization process is accelerated.
A-A command economy results in a less flexible economy, so globalization is challenged as the
government regulates economic production.
A company is conducting a legal risk analysis for a country that has a civil law system.
Which statement accurately characterizes this legal system?
A. It is a moral, not a commercial, system.
B. It relies on the opinions of those well-trained in law.
C. It permits judges to interpret the law.
D. It is based on a detailed set of laws that form a code.
D-The civil legal system is based on a set of laws that form a code and it is based on how the law
is applied to the facts.
Which fact should a company note when it opens its operations in the state of Louisiana?
A. The state follows a customary law system.
B. The state has a mixed law system.
C. The state follows a Talmudic law system.
D. The state follows the canon law system.
B-The state of Louisiana follows a mix of both the civil and common law system, whereas the
U.S. on the whole follows a common law system.
,Which core principle of the World Trade Organization supports equality among member
nations and helps fight discrimination among them?
A. Controlled tariffs
B. Multilateral trade agreements
C. Most-favored-nation (MFN) status
D. Free trade
C-This principle states that countries must trade without discrimination for other countries.
What is true regarding free trade?
A. Free trade leads to specialization of each country and increases production efficiency.
B. Free trade generates manufacturing jobs in developed countries.
C. Free trade generates more losses than gains for participating countries
D. Free trade is weakened when countries join regional economic integrations.
A-Free trade encourages countries to specialize in their comparative advantage area of
production and gain economies of scale to improve production efficiency.
Countries A and B participate in trade agreements that allow free trade among participant
countries. However, Country A imposed quotas on several imported products to protect its
domestic products.
What is the effect, if any, on the domestic prices of these products?
A. Increases
B. Cannot be determined
C. Stays the same
D. Decreases
A-Restriction can serve to increase the domestic prices of the same products.
How do governments help companies offset the cost of manufacturing domestically?
A. Anti-trust laws
,B. Subsidies
C. Anti-dumping laws
D. Tariffs
B-Subsidies are monies given to industry to keep prices competitive on a global level.
What would a mercantilist value the most?
A. Absolute advantage
B. A trade surplus
C. Comparative advantage
D. Factors of production
B-Mercantilists wanted to help a nation gain trade surplus by encouraging exports and limiting
imports.
A multinational corporation has manufacturing facilities in many Asian countries due to
cheaper labor. Which strategy is the corporation using?
A. Market expansion
B. Realignment of capital expenditures
C. Acquisition of resources
D. Centralized portfolio management
C-Resource acquisition will offer more capital, access to raw materials, and technology.
A firm in Country A exports products to Country B. The currency in Country B is strong
relative to the currency in Country A. What does this mean for the firm?
A. Increased domestic sales
B. Decreased foreign sales
C. More valuable export sales
D. Less valuable export sales
, C-When the currency from the point of sale in Country B is converted into the currency of
Country A, it will buy more of that currency.
How is global business positively affected by intercultural exchange?
A. It increases the uniqueness of the national community.
B. It decreases the rate of change associated with industrial colonization.
C. It decreases complexity to improve commercial identities.
D. It increases worldwide connections that support commodity trading.
D-The spreading of ideas, meanings, and values around the world enables and enhances the
commodity exchange process.
How does globalization support tolerance for different people and ideas?
A. By improving global wages
B. By strengthening protectionist tendencies
C. By increasing the access to information
D. By enhancing global morality
C-Globalization increases access to others, which in turn, increases access to a variety of
information.
A business has recently started selling in a new global marketplace. Shortly after the
company made this global expansion, the new country opted to implement ad valorem
tariffs. How will this change affect the company?
A. It will impose a value-added tax on corporate profits.
B. It will levy a tax based on the value of goods imported, causing this company to export
less.
C. It will provide increased corporate tax breaks.
D. It will levy a fixed tax on the goods imported.
?
ANSWERS!!
Which effect does a command economy have on the process of globalization?
A. The government is less flexible, so the globalization process is challenged.
B. The economy is self-sufficient, so the globalization process remains unaffected.
C. The economy is competitive, so the globalization process will be slowed.
D. The government encourages a free market, so the globalization process is accelerated.
A-A command economy results in a less flexible economy, so globalization is challenged as the
government regulates economic production.
A company is conducting a legal risk analysis for a country that has a civil law system.
Which statement accurately characterizes this legal system?
A. It is a moral, not a commercial, system.
B. It relies on the opinions of those well-trained in law.
C. It permits judges to interpret the law.
D. It is based on a detailed set of laws that form a code.
D-The civil legal system is based on a set of laws that form a code and it is based on how the law
is applied to the facts.
Which fact should a company note when it opens its operations in the state of Louisiana?
A. The state follows a customary law system.
B. The state has a mixed law system.
C. The state follows a Talmudic law system.
D. The state follows the canon law system.
B-The state of Louisiana follows a mix of both the civil and common law system, whereas the
U.S. on the whole follows a common law system.
,Which core principle of the World Trade Organization supports equality among member
nations and helps fight discrimination among them?
A. Controlled tariffs
B. Multilateral trade agreements
C. Most-favored-nation (MFN) status
D. Free trade
C-This principle states that countries must trade without discrimination for other countries.
What is true regarding free trade?
A. Free trade leads to specialization of each country and increases production efficiency.
B. Free trade generates manufacturing jobs in developed countries.
C. Free trade generates more losses than gains for participating countries
D. Free trade is weakened when countries join regional economic integrations.
A-Free trade encourages countries to specialize in their comparative advantage area of
production and gain economies of scale to improve production efficiency.
Countries A and B participate in trade agreements that allow free trade among participant
countries. However, Country A imposed quotas on several imported products to protect its
domestic products.
What is the effect, if any, on the domestic prices of these products?
A. Increases
B. Cannot be determined
C. Stays the same
D. Decreases
A-Restriction can serve to increase the domestic prices of the same products.
How do governments help companies offset the cost of manufacturing domestically?
A. Anti-trust laws
,B. Subsidies
C. Anti-dumping laws
D. Tariffs
B-Subsidies are monies given to industry to keep prices competitive on a global level.
What would a mercantilist value the most?
A. Absolute advantage
B. A trade surplus
C. Comparative advantage
D. Factors of production
B-Mercantilists wanted to help a nation gain trade surplus by encouraging exports and limiting
imports.
A multinational corporation has manufacturing facilities in many Asian countries due to
cheaper labor. Which strategy is the corporation using?
A. Market expansion
B. Realignment of capital expenditures
C. Acquisition of resources
D. Centralized portfolio management
C-Resource acquisition will offer more capital, access to raw materials, and technology.
A firm in Country A exports products to Country B. The currency in Country B is strong
relative to the currency in Country A. What does this mean for the firm?
A. Increased domestic sales
B. Decreased foreign sales
C. More valuable export sales
D. Less valuable export sales
, C-When the currency from the point of sale in Country B is converted into the currency of
Country A, it will buy more of that currency.
How is global business positively affected by intercultural exchange?
A. It increases the uniqueness of the national community.
B. It decreases the rate of change associated with industrial colonization.
C. It decreases complexity to improve commercial identities.
D. It increases worldwide connections that support commodity trading.
D-The spreading of ideas, meanings, and values around the world enables and enhances the
commodity exchange process.
How does globalization support tolerance for different people and ideas?
A. By improving global wages
B. By strengthening protectionist tendencies
C. By increasing the access to information
D. By enhancing global morality
C-Globalization increases access to others, which in turn, increases access to a variety of
information.
A business has recently started selling in a new global marketplace. Shortly after the
company made this global expansion, the new country opted to implement ad valorem
tariffs. How will this change affect the company?
A. It will impose a value-added tax on corporate profits.
B. It will levy a tax based on the value of goods imported, causing this company to export
less.
C. It will provide increased corporate tax breaks.
D. It will levy a fixed tax on the goods imported.
?
