International
Business
Key Terms Review
Work 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
Good Work! Go on to
the next question
Question #2
Who is the largest recipient of
subsidies?
United States car
manufactures
United States
Farmers
Correct
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the next question
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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the next question
Question #4
When did NAFTA first take effect
January 1,
2000
January 1,
1994
July 4, 1994
Correct
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the next question
Question #5
All forces surrounding and influencing
the life and development of a firm
are called …
Globally aware
Environmental
Correct
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the next question
Question #6
What is the biggest cause of
international blunders?
Self referencing
criterion
Foreign Sourcing
Correct
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the next question
Question #7
Who is the largest oil producing
country not to be a member of
OPEC?
Russia
Canada
Brazil
Correct
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the next question
Question #8
Who was the author of the theory of
Comparative Advantage?
John Kenneth
Galbraith
David Ricardo
Milton
Friedman
Correct
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the next question
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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the next question
Question #10
When a country produces a product
that it has a relative advantage in …
Comparative
Advantage
Absolute
Advantage
Correct
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the next question
Question #11
What is an example of a global
company?
Ford
Walmart
Correct
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the next question
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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the next question
Question #13
OPEC Controls _____ % of the world’s
oil supply?
35%
40%
45%
Correct
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the next question
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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the next question
Question # 15
Adam Smith is credited with creating
the theory of …
Absolute
Advantage
Comparative
Advantage
Correct
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the next question
Question #16
OPEC is made up of 9, Arab only
nations?
True
False
Correct
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the next question
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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the next question
Question #18
The best judge of Purchasing Power
Parity is …
Campbell
Seavers
Index
Income
Ratio Index
Big Mac
Index
Correct
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the next question
Question #19
Another name for a tariff as a …
Import tax
Quota
Duty
Correct
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the next question
Question #20
The price of one currency stated in
terms of another currency is
called …
Exchange
Rate
Exchange
Ratio
Correct
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the next question
Question #21
All maquiladora factories have to
be within 25 miles of the Unites
States border?
True
False
Correct
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the next question
Question #22
The goal of a company that practices
predatory dumping is to …
Force domestic
producers out of
business
Work with
overseas
firms
Allow their
products to
cost more
Correct
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the next question
Question #23
Which of the following is not an
internal environmental factor?
Capital
Raw
Materials
Physical
People
Correct
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the next question
Question #24
The theory of Absolute Advantage
was created by …
Milton
Friedman
Adam Smith
David
Ricardo
Correct
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the next question
Question #25
Coke-cola India is an example of a …
Multidomestic
Global
International
Correct
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the next question
Question #26
A multinational organization
designed to deal with rules of trade
between nations
IMF
World Bank
WTO
Correct
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the next question
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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the next question
Question #28
Internal Environmental Factors are
NOT controllable by a company?
True
False
Correct
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the next question
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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the next question
Question #30
The Heckscher-Ohlin theory is directly
related to
Factors of
Production
Exchange
Rates
Factor
Endowment
Correct
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the next question
Question #31
Legal, political, and labor are only a
few of the _______ environmental
factors?
Internal
External
Correct
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the next question
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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the next question
Question #33
Once a product is made at a
maquiladora, it can be sold in
Mexico?
True
False
Correct
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the next question
Question #34
Mexico’s main focus is to keep 1st
generation work activity in the
country?
True
False
Correct
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the next question
Question #35
Mexico’s shift away from 1st
generation work is because of this
country?
United State
Bangladesh
China
Correct
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the next question
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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the next question
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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the next question
Question #38
The overseas procurement of raw
materials, components, and
products
Foreign
Investment
Foreign
Sourcing
Correct
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the next question
Question #39
Factor 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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the next question
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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the next question
Question #41
The organization that acts as the
world trade referee is the …
World Bank
US
Commerce
Dept.
WTO
Correct
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the next question
Question #42
Which is NOT a responsibility of the
International Monetary Fund?
balanced
expansion of
world trade
Act as a guarantee
organization military
loans
stability of
exchange rates
orderly correction of
balance of payments
problems
Correct
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the next question
Question #43
Voluntary export restraints are closely
associated with …
Orderly Market
Arrangements
quotas
Subsidies
Correct
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the next question
Question #44
NAFTA is a trade agreement between
the following …
United States &
Canada
United States,
Canada, Mexico
Mexico &
Canada
United States &
Mexico
Correct
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the next question
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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the next question
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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the next question
Question #47
Comparative Advantage allows a
country to …
Produce what it
can
Produce what it
is good at
Correct
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the next question
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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the next question
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
Absolute Quota
Global Quota
Correct
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the next question
Question #50
Which of the following was a founding
member of OPEC ?
Libya
Russia
Venezuela
Angola
Correct
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the next question
Question #51
The IMF will loan money to …
Individual
companies
Anyone
Governments
Correct
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the next question
Question #52
Adam Smith felt that _______ should
be the main reason why countries
trade
Government
forces
Market forces
Correct
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the next question
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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the next question
Question #54
For a quota to be in effect, it has to
have a ________?
Open Ended
Period
Specific Period
Correct
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the next question
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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the next question
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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the next question
Question #57
A trade situation that creates a winwin trade scenario is called …
Absolute
Advantage
Comparative
Advantage
Correct
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the next question
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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the next question
Question #59
Which company is the largest user of
maquiladora factories is …
Delphi
Wal-Mart
General Motors
Correct
Good Work! Go on to
the next question
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 done
Maybe 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 Questions
Next Slide
Good Luck on
your test
May the force be with
you (don’t for get to
study)