A Quiz About The Global Business Environment

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Quizzes Created: 1 | Total Attempts: 1,905
Questions: 22 | Attempts: 1,905

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Business Environment Quizzes & Trivia

Questions and Answers
  • 1. 

     International companies face several challenges because of each country’s uniqueness: Laws, customs, consumer preferences, ethical standards, labor skills, political and economic stability, volatile currencies, and international trade relationships.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    International companies face several challenges due to the uniqueness of each country. These challenges include laws, customs, consumer preferences, ethical standards, labor skills, political and economic stability, volatile currencies, and international trade relationships. These factors can greatly impact the operations and success of international companies. Therefore, the statement "International companies face several challenges because of each country's uniqueness" is true.

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  • 2. 

    All U.S. companies doing international business must comply with the 1978 Foreign Corrupt Protection Act that prohibits any __________ to government officials abroad In addition,.

    Correct Answer
    bribes
    Explanation
    The correct answer is "bribes". The 1978 Foreign Corrupt Protection Act mandates that all U.S. companies engaged in international business are prohibited from offering bribes to government officials abroad. This legislation aims to prevent corruption and ensure fair business practices in foreign transactions.

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  • 3. 

    In most cases the opportunities of the global marketplace greatly outweigh the risks.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement suggests that the benefits or advantages of participating in the global marketplace are usually much higher than the potential risks involved. This implies that there are more opportunities for growth, expansion, and profitability in the global market compared to the potential drawbacks such as economic uncertainties, political instability, or cultural differences. Therefore, the correct answer is "True" as it supports the idea that the benefits of the global marketplace outweigh the risks.

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  • 4. 

    Some of the ways to handle cultural differences: (mark all that apply)

    • A.

      Adapt your products

    • B.

      Deal with the individual

    • C.

      Offer bribes to officials

    • D.

      Show respect

    Correct Answer(s)
    A. Adapt your products
    B. Deal with the individual
    D. Show respect
    Explanation
    The correct answer is to adapt your products, deal with the individual, and show respect. When handling cultural differences, it is important to adapt your products to cater to the specific needs and preferences of different cultures. Additionally, dealing with individuals on a personal level helps to understand their cultural values and customs better. Showing respect towards different cultures and their traditions is crucial in building positive relationships and avoiding misunderstandings. Offering bribes to officials is unethical and illegal, and should not be considered as a way to handle cultural differences.

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  • 5. 

    The buying of goods or services from a supplier in another country:

    • A.

      Exporting

    • B.

      Importing

    • C.

      Trafficing

    Correct Answer
    B. Importing
    Explanation
    Importing refers to the act of buying goods or services from a supplier in another country. It involves bringing in products or services from abroad for domestic consumption or resale. This process allows countries to access goods and services that may not be available or are more cost-effective in their own country. Importing plays a crucial role in global trade and helps to meet the demands and preferences of consumers in different countries.

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  • 6. 

    The selling of products outside the country in which they are produced.

    • A.

      Exporting

    • B.

      Importing

    • C.

      Trafficing

    Correct Answer
    A. Exporting
    Explanation
    Exporting refers to the act of selling products or goods to other countries or markets outside the country in which they are produced. It involves the transportation and sale of goods across international borders, allowing businesses to expand their customer base and reach new markets. Exporting can help businesses increase their sales and profits, promote economic growth, and enhance international trade relationships.

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  • 7. 

    An export trading company is a firm that specialize in performing international marketing services.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    An export trading company is indeed a firm that specializes in performing international marketing services. These companies typically assist businesses in selling their products or services to foreign markets by providing various services such as market research, advertising, logistics, and distribution. They play a crucial role in facilitating international trade and helping companies expand their reach globally.

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  • 8. 

    _______________ __________________ entitle one company to use some or all of another firm’s intellectual property (patents, trademarks, brand names, copyrights, or trade secrets) in return for a royalty payment.

    Correct Answer
    License agreements
    Explanation
    License agreements entitle one company to use some or all of another firm's intellectual property in return for a royalty payment. These agreements allow a company to legally use patents, trademarks, brand names, copyrights, or trade secrets owned by another company. The terms of the agreement, including the scope of the license and the royalty payment, are negotiated between the two parties involved. License agreements are a common way for companies to monetize their intellectual property and for other companies to gain access to valuable assets without having to develop them themselves.

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  • 9. 

    A ________________  enters into an agreement whereby the franchisee obtains the rights to duplicate a specific product or service e.g. KFC or McDonald’s.

    • A.

      Exporter

    • B.

      Franchiser

    • C.

      Importer

    Correct Answer
    B. Franchiser
    Explanation
    This question is asking for the term that describes a party who grants the rights to duplicate a specific product or service, such as KFC or McDonald's. The correct answer is "franchiser." A franchiser is the entity that allows others (franchisees) to operate a business using its established brand, trademarks, and business model. This allows the franchisee to benefit from the franchiser's successful and recognized brand while operating their own business.

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  • 10. 

    A long–term partnership between two or more companies to jointly develop, produce, or sell products in the global marketplace:

    • A.

      International Strategic Alliance

    • B.

      Franchise

    • C.

      Joint venture

    • D.

      Export management company

    Correct Answer(s)
    A. International Strategic Alliance
    C. Joint venture
    Explanation
    An international strategic alliance and a joint venture are both long-term partnerships between two or more companies to jointly develop, produce, or sell products in the global marketplace. Both types of partnerships involve collaboration and sharing of resources and expertise to enter foreign markets. The main difference is that a joint venture typically involves the creation of a separate legal entity, while an international strategic alliance can be a looser partnership without the creation of a separate entity. Therefore, both options are correct answers for this question.

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  • 11. 

    One reason why Nations trade is that no single country produces everything its citizens need.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Nations engage in trade because no single country can produce all the goods and services that its citizens need. This is due to various factors such as limited resources, differences in climate and geography, and variations in the skills and expertise of the population. Trade allows countries to specialize in producing certain goods or services that they are more efficient at, while importing others that they are less efficient at producing. This leads to increased efficiency, higher productivity, and a wider variety of goods and services available to consumers.

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  • 12. 

    ________________ ___________________when a nation can produce a particular item more efficiently than all other nations, or it’s the only country producing that product.

    Correct Answer
    Absolute advantage
    Explanation
    Absolute advantage refers to a situation where a nation can produce a specific item more efficiently than any other nation or when it is the sole producer of that product. This means that the nation can produce the item at a lower cost or with higher quality compared to other countries. Having an absolute advantage allows the nation to specialize in the production of that item and potentially gain a competitive edge in international trade.

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  • 13. 

    _______________ _________________ _________________is  how a country chooses which items to produce and which items to trade for. This theory states that a country should sell to other countries those items it produces more efficiently, and it should trade for those it can't produce as economically.

    Correct Answer
    comparative advantage theory
    Explanation
    The explanation for the given correct answer is that the comparative advantage theory explains how a country decides which goods to produce and which goods to trade for. According to this theory, a country should specialize in producing and exporting goods that it can produce more efficiently compared to other countries. It should then import goods that it cannot produce as efficiently. This theory suggests that countries can benefit from trade by focusing on their areas of comparative advantage and trading for goods that they are less efficient at producing.

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  • 14. 

    Balance of trade means:

    • A.

      Total value of a country's exports minus the total value of imports

    • B.

      Total flow of money into the country minus the total flow of money out of the country

    • C.

      Unfavorable trade balance.

    Correct Answer
    A. Total value of a country's exports minus the total value of imports
    Explanation
    The correct answer is "total value of a country's exports minus the total value of imports." Balance of trade refers to the calculation of the value of a country's exports subtracted by the value of its imports. It is used to determine whether a country has a trade surplus (more exports than imports) or a trade deficit (more imports than exports). This measure helps to assess the economic health and competitiveness of a country in the global market.

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  • 15. 

    ________________ ___________________ favorable trade balance created when a country exports more than it imports.

    Correct Answer
    trade surplus
    Explanation
    A trade surplus occurs when a country exports more goods and services than it imports. This leads to a favorable trade balance as it means that the country is earning more revenue from its exports than it is spending on imports. This can have positive effects on the country's economy, such as increased employment, higher GDP, and improved currency value. A trade surplus indicates that the country is competitive in the global market and has a strong export sector.

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  • 16. 

    _____________ _________________ unfavorable trade balance created when a country imports more than it exports.

    Correct Answer
    trade deficit
    Explanation
    A trade deficit refers to an unfavorable trade balance where a country imports more goods and services than it exports. This means that the country is spending more on foreign products than it is earning from selling its own goods and services abroad. A trade deficit can have various causes, such as a lack of competitiveness in domestic industries, high domestic consumption, or currency exchange rates. It can have negative effects on the economy, including a decrease in employment, a decline in domestic industries, and an increase in national debt.

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  • 17. 

     Government policies aimed at shielding  a countries industries from  foreign competitors.

    Correct Answer
    protectionism
    Explanation
    Protectionism refers to government policies that are implemented to protect domestic industries from foreign competition. These policies can include imposing tariffs or trade barriers, providing subsidies to domestic industries, or implementing quotas on imports. The aim of protectionism is to give domestic industries a competitive advantage and promote their growth and development. By shielding domestic industries from foreign competitors, governments can protect jobs, promote economic growth, and safeguard national security interests.

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  • 18. 

    ________ taxes, surcharges, or duties levied against imported goods.

    Correct Answer
    Tariffs
    Explanation
    Tariffs refer to taxes, surcharges, or duties imposed on imported goods. They are a form of trade barrier that governments use to protect domestic industries, generate revenue, or regulate trade. Tariffs increase the cost of imported goods, making them less competitive compared to domestic products. This can stimulate domestic production and protect local industries from foreign competition. Tariffs also serve as a source of income for governments, as they collect revenue from the taxes imposed on imported goods. Overall, tariffs are a tool used by governments to regulate international trade and protect domestic industries.

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  • 19. 

    ________________  fixed limits on the quantity of imports a nation will allow for a specific product.

    Correct Answer
    Quotas
    Explanation
    Quotas refer to the fixed limits on the quantity of imports that a nation will allow for a specific product. Quotas are often used by governments to restrict the amount of foreign goods entering their country in order to protect domestic industries or to control trade deficits. By imposing quotas, governments can regulate the quantity of imports and maintain a balance between domestic production and foreign competition. Quotas can be set in terms of quantity or value, and they can be applied to specific products or countries.

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  • 20. 

    _______ total ban on trade with a particular nation or of a particular product.

    Correct Answer
    Embargo
    Explanation
    An embargo refers to a complete restriction on trade with a specific country or a specific product. This means that all imports and exports involving that nation or product are prohibited. Embargoes are often imposed as a political or economic measure to put pressure on a country or to address specific concerns such as human rights violations or national security threats. It is a powerful tool used by governments to isolate and economically weaken a targeted nation or industry.

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  • 21. 

    Unloading is the practice of selling large quantities of a product at a price lower than the cost of production.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Correct answer is dumping

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  • 22. 

    ____________ _________________ - the rate at which the money of one country is traded for the money of another.

    Correct Answer
    exchange rate
    Explanation
    An exchange rate refers to the rate at which the currency of one country can be exchanged for the currency of another country. It represents the value of one currency in terms of another and is determined by various factors such as supply and demand, interest rates, inflation, and political stability. The exchange rate plays a crucial role in international trade and finance as it affects the competitiveness of a country's exports and imports.

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