BADM EXAM 3 STUDY SET UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. As an evolution of international trade, globalization
involves:
Answer:
a shift toward a more integrated world economy
Question:
2. Comparative and absolute advantage are competitive
advantage concepts that determine production and
trading decisions. Absolute advantage is based on ________;
comparative advantage is based on ________.
Answer:
Resource exclusivity or factor productivity; relative opportunity cost
Question:
3. When countries engage in trade, they specialize in the
production of the goods in which they have a ________
advantage. Goods and services are produced where the
opportunity cost is ________.
Answer:
competitive; lowest
Question:
4. When countries specialize in producing goods they are
most efficient at, and trade for their other goods from
trading partner countries, the arrangement demonstrates:
Answer:
the Law of Comparative Advantage.
Question:
5. The key drivers advancing globalization are:
Answer:
technical, cultural, and economic advances.
,Question:
6. If your country is the single, only source of a given
product, good or service, you are said to have:
Answer:
absolute advantage.
Question:
7. Balance of trade and balance of payments are both ways
of measuring the impact of global trade on a country's
economy. What differentiates the two measures is that
balance of trade is ________ and balance of payments is
________.
Answer:
The net of exports minus imports; net of money inflow minus money outflow
Question:
8. A country is said to have a trade deficit when:
Answer:
value of its imports exceeds the value of its exports
Question:
9. Countertrade is a way of facilitating trade in
circumstances when currency isn't a viable form of
payment. Countertrade transactions are settled with:
Answer:
exchange of goods and services
Question:
10. Countertrade is the exchange of goods and services
without:
Answer:
exchanging currency
Question:
11. When more goods and services are exported than
imported it is known as a:
Answer:
trade surplus.
, Question:
12. Countries wishing to know the net of their exchange of
goods rely on which equation?
Answer:
Balance of Trade
Question:
13. There are a number of strategies a business can use to
gain access to foreign markets. Exporting is considered
to be ________ means of entering a new market.
Answer:
the fastest and the least expensive
Question:
14. Licensing and franchising are two options for gaining
access to global markets. Licensing is generally used with
________; franchising is generally used to "export" ________.
Answer:
intangible goods; branded product or service
Question:
15. Foreign direct investments FDI can take one of two forms:
a "greenfield" (new) venture or a merger with or
acquisition of an existing foreign business. Relative to
other strategies for entering a foreign market, using
foreign direct investments is considered to be a ________
option.
Answer:
strategic choice in the sense of control and long-term potential
Question:
16. Joint ventures and foreign strategic alliances are
approaches used with large-scale, capital-intensive
projects in global markets. Which of the following
situations best reflects a joint venture?
Answer:
A new business is established with equal ownership where one party has in-
country expertise
QUESTIONS AND CORRECT ANSWERS
Question:
1. As an evolution of international trade, globalization
involves:
Answer:
a shift toward a more integrated world economy
Question:
2. Comparative and absolute advantage are competitive
advantage concepts that determine production and
trading decisions. Absolute advantage is based on ________;
comparative advantage is based on ________.
Answer:
Resource exclusivity or factor productivity; relative opportunity cost
Question:
3. When countries engage in trade, they specialize in the
production of the goods in which they have a ________
advantage. Goods and services are produced where the
opportunity cost is ________.
Answer:
competitive; lowest
Question:
4. When countries specialize in producing goods they are
most efficient at, and trade for their other goods from
trading partner countries, the arrangement demonstrates:
Answer:
the Law of Comparative Advantage.
Question:
5. The key drivers advancing globalization are:
Answer:
technical, cultural, and economic advances.
,Question:
6. If your country is the single, only source of a given
product, good or service, you are said to have:
Answer:
absolute advantage.
Question:
7. Balance of trade and balance of payments are both ways
of measuring the impact of global trade on a country's
economy. What differentiates the two measures is that
balance of trade is ________ and balance of payments is
________.
Answer:
The net of exports minus imports; net of money inflow minus money outflow
Question:
8. A country is said to have a trade deficit when:
Answer:
value of its imports exceeds the value of its exports
Question:
9. Countertrade is a way of facilitating trade in
circumstances when currency isn't a viable form of
payment. Countertrade transactions are settled with:
Answer:
exchange of goods and services
Question:
10. Countertrade is the exchange of goods and services
without:
Answer:
exchanging currency
Question:
11. When more goods and services are exported than
imported it is known as a:
Answer:
trade surplus.
, Question:
12. Countries wishing to know the net of their exchange of
goods rely on which equation?
Answer:
Balance of Trade
Question:
13. There are a number of strategies a business can use to
gain access to foreign markets. Exporting is considered
to be ________ means of entering a new market.
Answer:
the fastest and the least expensive
Question:
14. Licensing and franchising are two options for gaining
access to global markets. Licensing is generally used with
________; franchising is generally used to "export" ________.
Answer:
intangible goods; branded product or service
Question:
15. Foreign direct investments FDI can take one of two forms:
a "greenfield" (new) venture or a merger with or
acquisition of an existing foreign business. Relative to
other strategies for entering a foreign market, using
foreign direct investments is considered to be a ________
option.
Answer:
strategic choice in the sense of control and long-term potential
Question:
16. Joint ventures and foreign strategic alliances are
approaches used with large-scale, capital-intensive
projects in global markets. Which of the following
situations best reflects a joint venture?
Answer:
A new business is established with equal ownership where one party has in-
country expertise
