Multiple-Choice Questions c) Global business involves a broader

scope than international business

1. Which of the following best defines d) International business involves only
international business? imports and exports
a) Business that involves a single country
b) Business transactions that involve 7. Which of the following organizations
multiple countries regulates international trade agreements?
c) Business that is restricted to local a) United Nations (UN)
markets b) World Trade Organization (WTO)
d) None of the above c) International Monetary Fund (IMF)
d) World Health Organization (WHO)
2. Which of the following is NOT a
characteristic of international trade? 8. International business includes all the
a) Trade between multiple countries following except:
b) Involves the exchange of goods and a) Exchange of goods and services
services b) Investment in foreign markets
c) Limited to the domestic market c) Domestic trade between two
d) Affects global economic growth companies within the same country
d) Export and import activities
3. Which of the following is an example of
a global trade agreement? 9. The primary goal of international
a) NAFTA business is to:
b) National tax laws a) Achieve market dominance
c) Local government regulations b) Promote cultural exchange
d) None of the above c) Maximize profit by operating across
multiple markets
4. Globalization primarily leads to: d) Expand a country’s territory
a) Decreased trade
b) Increased cultural isolation [Link] of the following is the major
c) Increased interdependence among driver of globalization?
countries a) Restrictive trade policies
d) None of the above b) Technology and innovation
c) Local government regulations
5. Which of the following is NOT a benefit d) Increased tariffs
of international business?
a) Market diversification 11.A country’s trade balance is:
b) Access to foreign resources a) The difference between the value of
c) Decreased competition a country’s imports and exports
d) Enhanced economic cooperation b) The difference between exports and
government expenditure
6. The main difference between c) The value of goods a country buys from
international business and global business other nations
is: d) None of the above
a) International business occurs within
national borders, while global business [Link] of the following does NOT
occurs across borders contribute to international business?
b) International business focuses on trade, a) Technology advancements
while global business focuses on finance b) Government regulations
c) Cultural diversity c) Fewer opportunities for international
d) Only domestic operations expansion
d) Increased government regulation on
[Link] trade theory focuses on trade
countries producing goods for which they
have the greatest relative efficiency? 19.A multinational corporation typically
a) Absolute Advantage operates in:
b) Comparative Advantage a) One country
c) Heckscher-Ohlin Theory b) A few countries
d) Mercantilism c) Multiple countries
d) None of the above
[Link] is the role of the World Trade
Organization (WTO)? [Link] of the following factors affects
a) To grant loans to developing countries the success of international
b) To regulate international monetary business?
systems a) Exchange rates
c) To promote free trade and resolve b) Political stability
disputes between countries c) Cultural differences
d) To manage immigration policies d) All of the above

15.A trade deficit occurs when: Chapt 2

a) A country exports more than it
imports 1. Which theory suggests that a country
b) A country’s exports equal its imports should specialize in producing goods
c) A country imports more than it exports where it has a lower opportunity cost?
d) A country experiences negative a) Absolute Advantage
economic growth b) Comparative Advantage
c) Factor Proportions Theory
[Link] of the following is the primary d) Mercantilism
reason for firms to engage in
international business? 2. Who introduced the theory of absolute
a) To reduce domestic competition advantage?
b) To access larger markets a) Adam Smith
c) To decrease product variety b) David Ricardo
d) To restrict foreign competitors c) John Maynard Keynes
d) Joseph Schumpeter
[Link] of the following is an example of
a multinational corporation (MNC)? 3. According to the Heckscher-Ohlin
a) Starbucks theory, trade patterns are determined by:
b) A local restaurant chain a) Differences in natural resources
c) A small tech startup b) Technological advancements
d) A country’s national government c) Government policies
d) Comparative advantage
[Link] is one consequence of
globalization for companies? 4. Which of the following is an assumption
a) Decreased access to foreign markets of the comparative advantage theory?
b) Increased competition and pressure a) Countries do not trade goods with each
for efficiency other
b) All resources are mobile within
countries 5. The IMF provides loans primarily to:
c) Trade occurs only between developed a) Large multinational corporations
countries b) Developed countries with surplus
d) Countries have equal access to economies
technology c) Countries facing financial crises or
balance of payment problems
5. The mercantilist theory emphasizes: d) Developed countries only
a) The accumulation of wealth through
trade surpluses 6. What does the term 'Most Favored
b) Free trade with minimal government Nation' (MFN) refer to in international
interference trade?
c) Specialization and exchange of goods a) A trade policy providing the same
d) None of the above trade privileges to all countries
b) The country with the highest number of
Chapt 3 imports
1. Which organization regulates c) A country that is exempt from all trade
international trade agreements? agreements
a) United Nations (UN) d) None of the above
b) World Trade Organization (WTO)
c) International Monetary Fund (IMF) 7. Which of the following is a goal of the
d) World Health Organization (WHO) World Trade Organization (WTO)?
a) To eliminate poverty in all member
2. The International Monetary Fund (IMF) nations
was created to: b) To eliminate tariffs and non-tariff
a) Help countries prevent currency barriers
devaluation c) To provide funding to third-world nations
b) Promote global economic stability d) To settle non-economic disputes
by offering financial assistance
c) Regulate global trade 8. The primary purpose of the General
d) Act as a financial investment bank for Agreement on Tariffs and Trade (GATT)
private corporations was to:
a) Increase global tariffs
3. Which of the following is NOT an b) Facilitate the regulation of trade
objective of the World Bank? agreements and promote economic
a) To provide financial assistance to cooperation
developing countries c) Establish a global currency
b) To manage the international d) All of the above
monetary system
c) To reduce poverty 9. What is the main difference between
d) To fund infrastructure projects the World Bank and the IMF?
a) The World Bank provides loans for
4. Which organization aims to settle trade development; the IMF focuses on
disputes among member countries? short-term financial stability
a) IMF b) The World Bank is concerned with
b) WTO global trade regulation; the IMF deals with
c) UN exchange rates
d) World Bank
c) The World Bank only deals with a) Trade secret protection
advanced economies; the IMF focuses on b) Copyright
developing nations c) Patents and trademarks
d) None of the above d) All of the above

[Link] of the following is NOT a role of 16.A common criticism of international

the International Monetary Fund (IMF)? financial institutions such as the IMF
a) Promoting international monetary is:
cooperation a) They focus too much on developing
b) Issuing loans to countries for countries
development projects b) They often impose strict austerity
c) Providing policy advice on economic measures on borrowing nations
issues c) They have little impact on the global
d) Monitoring global economic trends economy
d) They limit technological innovation
[Link] of the following is an example of
a trade agreement? 17.A free trade area among countries is
a) WTO an example of a:
b) NAFTA a) Economic union
c) IMF b) Bilateral trade agreement
d) UN c) Trade bloc
d) Custom Union
[Link] body monitors the exchange
rate policies of member countries? [Link] does the term 'Global Economic
a) WTO Governance' refer to?
b) World Bank a) The regulation of trade within national
c) IMF boundaries
d) UN b) The management of global economic
institutions such as the IMF and World
[Link] of the following is a key function Bank
of the WTO? c) The creation of global financial products
a) It facilitates trade negotiations d) None of the above
among member nations.
b) It manages the global monetary system. [Link] of the following is a major
c) It monitors financial institutions. outcome of free trade agreements
d) It provides loans for infrastructure (FTAs)?
projects. a) Reduction or elimination of trade
barriers
[Link] of the following is an example of b) Economic protectionism
a non-tariff barrier? c) Increased tariffs
a) Import quotas d) Restricted imports
b) Trade tariffs
c) Subsidies for exporters [Link] of the following is NOT an
d) All of the above objective of the WTO?
a) To promote fair competition in
[Link] of the following are considered international trade
trade-related intellectual property b) To promote the use of tariffs for
rights (TRIPS)? trade protection
c) To foster trade liberalization d) Safeguard jobs
d) To settle trade disputes
7. Which of the following is a common
Chapt 4 form of government intervention in
international trade?
1. Which of the following is an example of a) Tariffs
a trade barrier? b) Subsidies
a) Free trade agreements c) Quotas
b) Tariffs d) All of the above
c) Economic sanctions
d) Both b and c 8. What is the effect of government
subsidies on exports?
2. Which of the following is the main a) They make exports more expensive for
purpose of tariffs? foreign markets
a) To encourage international trade b) They make domestic products more
b) To raise the cost of imports and competitive in foreign markets
protect domestic industries c) They increase tariffs on exports
c) To reduce the amount of exports d) None of the above
d) To promote foreign investments
9. Which of the following is an example of
3. Which of the following is a non-tariff a trade protectionist policy?
barrier? a) Free trade agreements
a) Quotas b) Export subsidies
b) Tariffs c) Tariffs on imported goods
c) Exchange rate restrictions d) Global economic cooperation
d) Import taxes
[Link] of the following organizations
4. Which of the following trade policies monitors trade policies of member
focuses on reducing tariffs and trade countries?
barriers between participating countries? a) United Nations
a) Import substitution b) World Trade Organization (WTO)
b) Free trade agreements c) World Health Organization
c) Protective tariffs d) European Union
d) Subsidies
[Link] is an example of an export
5. What is the effect of a quota on subsidy?
imports? a) A tax on imported goods
a) Increases the volume of imports b) A government payment to domestic
b) Limits the quantity of imports exporters to reduce their costs
allowed c) A limit on the quantity of a product a
c) Reduces domestic production country can import
d) None of the above d) None of the above

6. Which of the following is NOT a reason 12.A country using protectionist policies is
countries impose trade barriers? most likely aiming to:
a) Protect domestic industries a) Increase imports
b) Preserve national security b) Boost domestic production and
c) Enhance international cooperation industries
c) Strengthen international relations c) They reduce or eliminate tariffs and
d) Encourage foreign investment other trade barriers between member
countries
[Link] of the following is true about d) They encourage the use of quotas
quotas?
a) They increase the availability of foreign [Link] of the following is an example of
goods in a market economic sanctions?
b) They limit the quantity of goods that a) A tariff on a country's exports
can be imported b) A ban on trade with a particular
c) They reduce the cost of domestic country
production c) A free trade agreement between two
d) They promote free trade among nations countries
d) A quota on foreign products
[Link] term refers to policies aimed at
restricting imports in order to 19.A 'most-favored-nation' (MFN) Most
protect domestic industries? Favored Nation status in trade means
a) Protectionism that a country:
b) Liberalization a) Must provide its best trade terms to
c) Globalization all member countries
d) Deregulation b) Can impose tariffs on any country it
chooses
[Link] is a trade embargo? c) Is exempt from trade agreements
a) A voluntary agreement to reduce tariffs d) None of the above
b) A restriction or ban on trade with a
particular country or group of countries [Link] of the following is an example of
c) A policy that promotes free trade a protective tariff?
d) A tax imposed on exported goods a) A tariff designed to raise revenue for
the government
[Link] is the main difference between b) A tariff imposed to protect a
tariffs and quotas? domestic industry from foreign
a) Tariffs restrict the quantity of imports, competition
while quotas impose a tax c) A tariff that reduces the price of foreign
b) Tariffs are taxes on imports, while goods
quotas limit the quantity of imports d) A tariff that increases trade volumes
c) Quotas are applied only to exports,
while tariffs apply to imports
d) There is no difference

[Link] of the following is true about free

trade agreements (FTAs)?
a) They impose tariffs on imports
b) They limit the flow of goods and
services between countries
Essay Question

- Discuss the evolution of international trade and how globalization has impacted global
economic relations. In your answer, describe the key factors that led to the rise of
international business and trade, and the challenges businesses face in a globalized world.
 ●​ International trade has evolved from simple barter systems in ancient times to the
highly complex global economy we see today. The rise of maritime trade, the
Industrial Revolution, and advancements in technology all contributed to the growth
of trade between nations. Over time, globalization has increased economic
interdependence among countries, allowing businesses to expand into international
markets more easily. Key factors that led to the rise of international business include
improvements in transportation, digital communication, trade agreements, and the
removal of trade barriers. However, globalization also presents challenges, such as
increased competition, supply chain disruptions, currency fluctuations, and regulatory
differences between countries. Businesses must adapt to these challenges to remain
competitive in the global market.

- Discuss the roles and functions of major international trade organizations such as the
WTO, IMF, and World Bank. Explain their contributions to shaping global trade and economic
stability.

●​ The World Trade Organization (WTO) regulates global trade by setting rules,
resolving disputes, and promoting free trade among its member countries. The
International Monetary Fund (IMF) helps maintain global financial stability by
providing financial assistance and policy guidance to countries facing economic
difficulties. The World Bank focuses on reducing poverty and supporting economic
development by funding infrastructure projects and providing financial aid to
developing nations. These organizations play a crucial role in shaping global trade by
promoting fair economic policies, ensuring financial stability, and helping countries
integrate into the global market.

- Explain the different types of trade barriers and their effects on international business.
Discuss the role of tariffs, quotas, and non-tariff barriers in global trade, and explain how
these barriers can impact both importing and exporting countries.

●​ Trade barriers are restrictions imposed by governments to control the flow of goods
and services between countries. The most common types include tariffs, which are
taxes on imported goods, making them more expensive and protecting domestic
industries. Quotas limit the number of goods that can be imported, preventing
excessive foreign competition. Non-tariff barriers include regulations, licensing
requirements, and standards that restrict trade indirectly. These barriers can benefit
local industries by reducing foreign competition but can also increase prices for
consumers and lead to trade disputes. For exporting countries, trade barriers make it
harder to sell products abroad, potentially harming economic growth. Reducing trade
barriers through agreements and negotiations helps promote smoother international
trade and economic cooperation.