QN1: In which of the following countries do services account for about 40 percent or more of total merchandise trade?
a. China and Panama
b. Panama and the Netherlands
c. China, Panama, and the Netherlands
d. China and the Netherlands
Answer
Answer: b
QN2: Which of the following are included in a typical services export?
a. Tourism and transportation
b. Sales and forecasting
c. Technology and e-commerce
d. All of the above
Answer
Answer: a
QN3: Who does international trade allow to seek out products, services, and components in foreign countries?
a. Manufacturers and distributors
b. Distributors and suppliers
c. Suppliers and public officials
d. Manufacturers and suppliers
Answer
Answer: a
QN4: For developing countries, determinants of import demand include:
a. Government restrictions on all exports
b. Government restrictions on imports
c. Government restrictions on commercial exports only
d. Government restrictions on gold shipments
Answer
Answer: b
QN5: The dollar value of total world trade in 2004 was greater than the gross national product of every nation except:
a. United States
b. Canada
c. Australia
d. a and b
Answer
Answer: d
QN6: Which technologies assisted with the physical integration of world markets?
a. Media
b. E-commerce
c. a and b
d. None of the above
Answer
Answer: a
QN7: Which of the following explains the reason why larger countries import less manufactured goods on a per capita basis?
a. Larger countries have a diversified economy, so goods produced are usually outsourced.
b. Larger countries have the land capacity and ability to produce their own goods.
c. Larger countries have a larger population to help produce their own goods, thus contributing to a diversified economy.
d. Larger countries have a diversified economy and export more services than manufactured goods.
Answer
Answer: c
QN8: Trade in manufactured goods:
a. Has been a dynamic component of world merchandise trade
b. Has been a dynamic component of developed countries’ trade with the rest of the world
c. Has been the fastest growing part of world trade
d. Is now dominated by China, Korea, and Canada
Answer
Answer: a
QN9: Which of the following is an example of a free trade area/common market?
a. SURMERCO
b. DR-CAFTA
c. AFTA
d. SCHA
Answer
Answer: b
QN10: Unsustainable global imbalances have been a result of:
a. Weak currencies, domestic economic growth, and high savings
b. Strong currencies, domestic economic growth, and high savings
c. Weak currencies, domestic economic growth, and low savings
d. Strong currencies and domestic economic growth only
Answer
Answer: a
QN11: The result of the 9/11 terrorist attacks has increased costs to U.S. exporters. Which of the following is a major factor?
a. Rise in transportation costs
b. Rise in fuel costs
c. Rise in merchandise trade costs
d. Rise in security costs
Answer
Answer: d
QN12: The major benefits of trade include:
a. Reduction in transportation cost
b. Increases in incomes and employment
c. Advances in technical methods
d. b and c
Answer
Answer: d
QN13: Faster growth in emerging economies:
a. Has resulted in higher inflation
b. Has reduced globalization efforts
c. Has put pressure on the supply of raw materials
d. Has reduced global imbalances
Answer
Answer: c
QN14: Which of the following will help in improving the U.S. balance of trade?
a. Trade in soybeans
b. Increasing manufactured goods’ exports
c. Increasing the share of exports by small and medium-sized businesses
d. All of the above
Answer
Answer: c
QN15: In 2004, what was the value of world merchandise exports compared to that of services?
a. $6.21 (trillion), $4.26 (trillion)b. $6.21 (trillion), $3.28 (trillion)
c. $8.91 (trillion), $4.26 (trillion)
d. $8.91 (trillion), $2.12 (trillion)
Answer
Answer: d
QN16: Between 2000–2004, the average increase in world merchandise and service exports was:
a. 3 percent
b. 0.45 percent
c. 12.77 percent
d. 9 percent
Answer
Answer: d
QN17: The Final Act of the Uruguay Round established:
a. Reduction in global trade barriers and a multilateral framework of discipline for trade in services
b. Reduction in global trade barriers and protection of trade-related intellectual property rights
c. A multilateral framework of discipline for trade in services and protection of trade-related intellectual property rights
d. Reduction in global trade barriers, a multilateral framework of discipline for trade in services, and protection of trade-related intellectual property rights
Answer
Answer: d
QN18: What was the primary focus of the Doha Round?
a. Reduction of dumping by emerging economies in other countries
b. Reduction of trade distorting agricultural subsidies by developing countries
c. Reduction of trade distorting agricultural subsidies by developed countries
d. All of the above
Answer
Answer: c
QN19: Which of the following is not part of the four Pacific Rim countries?
a. Hong Kong
b. South Korea
c. China
d. Taiwan
Answer
Answer: c
QN20: What is considered to be a significant development in world trade over the past two decades?
a. Israel’s free trade agreement with the United States
b. China’s membership in ASEAN
c. The opening of China and Eastern Europe
d. Outsourcing in India
Answer
Answer: c
QN21: What has been the major focus of developing countries with regard to trade?
a. Increase international trade
b. Increase production and exports
c. Demand tariff cuts by wealthy countries
d. Increase trade aid
Answer
Answer: b
QN22: Which of the following countries have a surplus in their service account from tourism and workers’ remittances?a. Egypt, India, Pakistan
b. Egypt, India, China
c. China, India, Pakistan
d. China and India
Answer
Answer: a
QN23: Today’s integration of the world economy is driven by advances in , , and to reduce obstacles to the flow of trade and capital.
a. Communications, trade agreement, and government’s policy
b. Communications, information technology, and trade agreements
c. Communications, information technology, and government’s policy
d. Trade agreements, information technology, and government’s policy
Answer
Answer: c
QN24: Most occupations show a from an equal amount of exports and imports except for occupations, which are shrinking in most countries because of low-wage imports.
a. Net loss, white-collar, developed
b. Net gain, blue-collar, developed
c. Net gain, blue-collar, developing
d. Net loss, white-collar, developing
Answer
Answer: b
QN25: Exports create:
a. Low wage employment
b. High wage employment
c. No increase or decrease in employment
d. None of the above
Answer
Answer: b
QN26: Which trade policies did GATT use to reduce trade barriers among contracting parties?
a. Nondiscrimination
b. Trade liberalizationc. Settlement of trade disputes
d. All of the above
Answer
Answer: d
QN27: Countries that are members of the GATT/WTO are called:
a. Member nations
b. Members
c. Contracting parties
d. Contracting members
Answer
Answer: c
QN28: The Doha Round took place during the following years:
a. 2000 to 2002
b. 2000 to 2004
c. 2001 to 2006
d. None of the above
Answer
Answer: d
QN29: The GATT rules apply to all products both imported and exported, although most of the rules are relevant primarily to .
a. Exports
b. Imports
c. Services
d. Free trade
Answer
Answer: b
QN30: In 1982, the United States initiated a proposal to launch a new round of GATT talks. Which of the following was not a reason behind the U.S. initiative?
a. Improve market access for U.S. through reduction of tariff/nontariff barriers
b. Extend GATT coverage to areas such as IPRs and investment
c. Bring other developed nations more effectively into the international trading system
d. a and b.
Answer
Answer: d
QN31: The result of the Uruguay Round was:
a. Trade liberalization
b. Trade rules
c. Institutional reforms
d. All of the above
Answer
Answer: d
QN32: The Uruguay Round allowed for the reduction of trade barriers in the areas of and , which had been resistant to reform.
a. International property rights and investment
b. Agriculture and textiles
c. Textiles and apparel
d. International property rights and services
Answer
Answer: b
QN33: From 2004 to 2005, approximately RIAs were notified to the WTO.
a. 44
b. 51
c. 42
d. None of the above
Answer
Answer: d
QN34: Less than percent of agreements provide for high levels of integration as well as the harmonization of trade policies.
a. 10
b. 11
c. 12
d. 13
Answer
Answer: a
QN35: Smaller nations enter into the RIA for which two reasons:
a. Market access and creation of joint ventures with other developing nations
b. Market access and establishing trade and FDI relations with transition economies
c. Market access and to deal more effectively with larger economies in multilateral trade talks and other areas
d. None of the above
Answer
Answer: c
QN36: Which of the following is a major vehicle for RIAs?
a. Consolidation of peace and regional security
b. Promotion of deeper levels of economic integration
c. Sluggish progress in multilateral trade talks
d. All of the above
Answer
Answer: d
QN37: NAFTA has facilitated substantial increases of foreign direct investment in which country?
a. United States
b. Canada
c. Mexico
d. All of the above
Answer
Answer: c
QN38: According to NAFTA, the qualification for preferential market access is that goods must be
___ within member countries.
a. Sold
b. Made
c. a and b
d. None of the above
Answer
Answer: b
QN39: Under NAFTA, disputes between member states are settled through:
a. Consultations
b. Conciliation
c. Panel of nongovernment experts
d. All of the above
Answer
Answer: d
QN40: Since the establishment of NAFTA, the U.S. merchandise trade deficit with Canada and Mexico has and by 2005 had grown to $ .
a. Doubled; $330 billion
b. Tripled; $330 billion
c. Quadrupled; $ 330 billion
d. None of the above
Answer
Answer: c
QN41: The European Free Trade Area, formed in 1960, has the following countries as members:
a. Austria, Denmark, Norway, Portugal
b. Austria, Spain, Czech Republic, Portugal
c. Austria, Denmark, Norway, Spain
d. Austria, Norway, Portugal, Spain
Answer
Answer: a
QN42: Which of the following is not an objective of the European Union?
a. Establishment of free trade among nonmembers and member nations
b. Abolition of restrictions on the free movement of all factors of production
c. a and b
d. None of the above
Answer
Answer: a
QN43: The European Union has the following policy:
a. Uniform customs duties on goods imported from outside of the EU
b. The Common Agricultural Policy
c. Uniform common transport, agricultural and competition policy
d. All of the above
Answer
Answer: d
QN44: Which of the following is not an objective of the Single European Act?
a. Encouragement of monetary cooperation
b. Establishment of cooperation on research and development
c. Harmonization of working conditions across member nations
d. All of the above
Answer
Answer: d
QN45: The Euro has allowed for:
a. Higher transaction costs
b. Lower transaction costs
c. Nontransparent prices
d. a and c
Answer
Answer: b
QN46: The Andean Pact includes which countries?
a. Bolivia, Colombia, Ecuador, Peru
b. El Salvador, Costa Rica, Guatemala, Honduras
c. Bolivia, Colombia, Ecuador, Honduras
d. Argentina, Bolivia, Nicaragua, Venezuela
Answer
Answer: a
QN47: The Southern African Customs Union has the following as its objective:
a. Common currency and common external tariff
b. Common currency and free movement of goods
c. Common currency, common external tariff, and free movement of goods
d. Common external tariff and free movement of goods
Answer
Answer: d
QN48: Which of the following countries is not a member of the Economic Community of West African States?
a. Benin
b. Ghana
c. Kenya
d. Togo
Answer
Answer: c
QN49: Which of the following countries is a member of Asia Pacific Economic Cooperation?
a. Benin
b. Singapore
c. Venezuela
d. All of the above
Answer
Answer: b
QN50: is a common objective among all regional trade agreements.
a. Common external tariff
b. Single currency
c. Free trade
d. None of the above
Answer
Answer: c
QN51: Which of the following is a major advantage of sole proprietorships?
a. They are easy to organize, but difficult to control.
b. They are not as flexible to manage as a partnership.
c. Sole proprietorships are more subject to maximum government regulations than other businesses.
d. The owner of a sole proprietorship is taxed as an individual, at a lower rate than corporations.
Answer
Answer: d
QN52: The owner of a sole proprietorship is personally liable for the and other of the business.
a. Debts; liabilities
b. Risks; liabilities
c. Debts; risks
d. None of the above
Answer
Answer: a
QN53: Which of the following is not required in a partnership?
a. Share in profits
b. Share of bank accounts
c. Written agreement
d. All of the above
Answer
Answer: c
QN54: What is the fiduciary duty that partners owe the partnership and other partners?
a. Trust and honesty
b. Honesty and integrity
c. Loyalty and honesty
d. Loyalty and trust
Answer
Answer: d
QN55: A partnership is a special form of partnership that consists of at least one general partner
(investor, manager) and one or more investor partners.
a. Joint
b. Limited
c. General
d. None of the above
Answer
Answer: b
QN56: A general partner includes:
a. Natural persons
b. Partnerships
c. Corporations
d. All of the above
Answer
Answer: d
QN57: In a corporation, shareholders are liable only to the extent of their .a. Assets to the business
b. Investments in the business
c. Managerial duties
d. None of the above
Answer
Answer: b
QN58: Advantages of a corporation include:
a. Free transferability of shares
b. Perpetual existence
c. Ability to raise additional capital by selling shares in the corporation
d. All of the above
Answer
Answer: d
QN59: Many businesses incorporate their companies in the state of even though it is not the state in which the corporation does most of its business.
a. Washington, DC
b. California
c. Massachusetts
d. None of the above
Answer
Answer: d (the state is Delaware)
QN60: Which of the following is not a precondition for a corporation to be to be taxed as an S corporation?
a. Domestic entity
b. Membership in an affiliated group of firms
c. Number of shareholders
d. Classes of stock
Answer
Answer: b (no membership in an affiliated group is required)
QN61: If a small business is conducted from one’s home, all direct expenses for the business part of the home are .
a. Nondeductible expenses
b. Deductible expenses
c. a and b
d. None of the above
Answer
Answer: b
QN62: An international company can organize its export-import department along which lines?
a. Functional, product, nonmarketable, or geographical
b. Nonfunctional, product, marketable, or climatic
c. Functional, product, market, or geographical
d. Functional, product, market, or climatic
Answer
Answer: c
QN63: If a company elects to be taxed as an S corporation, it has the best advantages of:
a. A limited company and C corporation
b. Sole proprietorship and partnership
c. Sole proprietorship and investment firms
d. partnership and a corporation
Answer
Answer: d
QN64: For U.S. tax purposes, an individual is considered a U.S. resident if the person:a. Has been issued a green card
b. Has been physically present for 182 days
c. Meets the cumulative physical test
d. All of the above
Answer
Answer: a
QN65: If Jim (a U.K. citizen) was in Florida for 60 days in 2004, 30 days in 2005, and 160 days in 2006, would he be considered a U.S. resident for 2006? If not, how many more days would he be required to meet?
a. Yes. He has to be in the country for only 180 days minimum.
b. No. He needs at least one more day in order to meet the requirement.
c. No. He needs at least two more days in order to meet the requirement.
d. None of the above
Answer
Answer: d (he needs to be in the country for 183 consecutive days)
QN66: Amin, a Brazilian software exporter opens a small sales office in Indiana in order to sell in the United States and Canada. Amin is subject to pay taxes in which of the following places?
a. United States and Canada
b. United States
c. Canada
d. All of the above
Answer
Answer: b
QN67: In general, U.S. companies that export their goods overseas will incur no tax liability in the importing country if:
a. They undertake their exports through independent distributors
b. Their agents overseas do not have the authority to conclude sales contracts on behalf of the U.S. exporter
c. Income from U.S. services income is generally exempt from host country taxation
d. All of the above
Answer
Answer: d
QN68: Transfer prices do not affect or the absolute amount of gain or loss among related persons or “controlled group of ”
a. Single income; corporations
b. Combined income; corporations
c. Single income; partnerships
d. Combined income; partnerships
Answer
Answer: b
QN69: The United States has entered into a number of tax treaties with the following country:
a. India
b. China
c. New Zealand
d. All of the above
Answer
Answer: d
QN70: Which of the following are considered allowances?
a. Organizational costs
b. Personal and business expenses
c. Entertainment and travel expenses
d. All of the above
Answer
Answer: d
QN71: The following transfer pricing method is based on the allocation of profit between related parties based on the relative value of the contribution to the profit of each party:
a. Profit split method
b. Profit and cost plus method
c. Resale price and profit method
d. Comparable profits method
Answer
Answer: a
QN72: Arm’s length charge is determined by using which of the following:
a. Resale price method
b. Cost price method
c. Cost base method
d. All of the above
Answer
Answer: a
QN73: connected income may be extended beyond U.S.–source income to include certain types of foreign-source income.
a. Efficiently
b. Permanently
c. Effectively
d. Limited
Answer
Answer: c
QN74: A partnership is required to register its business name with the appropriate state agency under the following circumstance:
a. In all cases
b. In certain circumstances
c. Only if it operates under a fictitious name
d. Only if it uses the name of a similar business
Answer
Answer: c
QN75: Delaware has laws that are favorable to a business’s and .
a. External operations; management
b. International operations; management
c. External and internal operations; management
d. None of the above
Answer
Answer: b
QN76: Uncontrollable environmental forces include:
a. Exchange controls
b. Taxation
c. Inflation
d. All of the above
Answer
Answer: d
QN77: provide a preliminary indication of markets for a particular product in most countries.
a. Trade statistics
b. Foreign investment data
c. Statistical data
d. Data measurements
Answer
Answer: a
QN78: The difference between a systematic approach and a reactive approach is:
a. The systematic approach involves the selection of a product based on immediate market need, whereas the reactive approach is based on overall market demand.
b. A systematic approach involves the selection of a service based only on immediate market need, whereas a reactive approach is based on the selection based on overall market demand.
c. A systematic approach involves the selection of a product and service based on overall market demand, whereas a reactive approach is based on the selection on the basis of immediate market demand.
d. None of the above
Answer
Answer: c
QN79: In both cases (systematic or reactive), selection of the manufacturer (supplier) depends on a number of factors including:
a. Price
b. Quality and reliability
c. Proximity to home or office
d. All of the above
Answer
Answer: d
QN80: Lack of focus on a given product or market and absence of a long-term relationship with an importer are disadvantages of using:
a. Systematic approach
b. Reactive approach
c. a and b
d. None of the above
Answer
Answer: b
QN81: Which of the following are important factors to consider in selecting the export product?
a. Shifting spending patterns
b. Products to be included from the list
c. Emphasis on quantity and niche marketing
d. All of the above
Answer
Answer: a
QN82: International market research is needed because:
a. Export/investment decisions are often made with careful assessment of foreign markets and with a wide appreciation for different environments abroad.
b. Export/investment decisions are often made without careful and subjective assessment of foreign markets and with a wide appreciation for different environments abroad.
c. Export/investment decisions are often made without careful and objective assessment of foreign markets and with a limited appreciation for different environments abroad.
d. Export/investment decisions are often made without careful and objective assessment of foreign markets and with a wide appreciation for different environments abroad.
Answer
Answer: c
QN83: The purpose of international marketing research is to:
a. Identify and compare the size and potential of various markets and select the most desirable market for a given product or service
b. Reassess market changes that may require changes in a company’s strategy
c. a and b
d. None of the above
Answer
Answer: c
QN84: Some of the limitations to using secondary sources are that:
a. Information often meets and exceeds one’s specific needs
b. Similarities in the definition of terms or units of measure that make it difficult to categorize or compare the research data
c. Difficulties associated with the assessment of the accuracy of the information because little is known about research design or techniques used to gather the data.
d. Difficulties associated with data collection
Answer
Answer: c
QN85: In the early stages of assessment, secondary data are used to establish market size, level of trade, and .
a. Banking
b. Investment
c. Preferences
d. Tastes
Answer
Answer: b
QN86: Basic need potential is often determined by environmental conditions such as:
a. Climate
b. Topography
c. Natural resources
d. All of the above
Answer
Answer: d
QN87: Countries with high inflation rates should be carefully considered because they may limit:
a. The volume of imports by restricting the availability of foreign exchange
b. The volume of exports by restricting the availability of foreign exchange
c. The volume of money supply by restricting the availability of foreign exchange
d. The volume of exports, imports, and money supply by restricting the availability of foreign exchange
Answer
Answer: a
QN88: Exporting and importing of goods to and from politically unstable countries can be affected by:
a. Entry barriers
b. Limits on foreign remittances and/or ownership
c. Taxes and price controls
d. All of the above
Answer
Answer: d
QN89: The structure of an international business plan includes:
a. Executive summary
b. Financial plan
c. Target market
d. All of the above
Answer
Answer: d
QN90: World trade clubs provide:
a. Education programs on international trade and organization of promotional events
b. Advice on all aspects of exporting ranging from domestic to foreign regulations
c. Market research and promotion, shipping and documentation, financing sales, and appointment of overseas distributors
d. All of the above
Answer
Answer: a
QN91: The business contact programs provided by the Department of Commerce include:
a. ADS
b. NCUSA
c. CPI
d. OPT
Answer
Answer: a
QN92: Which of the following is not a tool used by exporters for overseas promotions?
a. Indirect mail
b. Trade missions
c. Advertising
d. All of the above
Answer
Answer: a
QN93: In Southeast Asia, what is the most effective way of promoting the sale of industrial goods?
a. Advertising
b. Trade missions
c. Direct mail
d. Personal selling
Answer
Answer: c
QN94: Which of the following techniques can an exporter use to advertise a product or service?
a. National media
b. Noncommercial publications
c. Nongovernment sponsored advertising
d. Foreign media
Answer
Answer: d
QN95: Trade fairs can be organized by:
a. Certain industries
b. Trade associations
c. Chamber of Commerce
d. All of the above
Answer
Answer: d
QN96: In the United States, which organization organizes various export promotion events?
a. Department of Commerce
b. American Exporters Association
c. Ex-Im Bank
d. Chamber of Commerce
Answer
Answer: a
QN97: is communicating with an audience by personal or nonpersonal media that are not explicitly paid for delivering messages.
a. Personal selling
b. Sales promotion
c. Publicity
d. The Internet
Answer
Answer: c
QN98: Which of the following is not a source of export counseling to U.S. exporters?
a. U.S. Department of Commerce
b. U.S. Export Assistance Centers
c. The Small Business Administration
d. U.S. Ex-Im Bank
Answer
Answer: d
QN99: Which of the following is not a common mistake made by potential exporters?
a. Failure to obtain qualified export counseling
b. Failure to print service, sale, and warranty messages in locally understood languages
c. Failure to provide readily available servicing for the product
d. Neglecting import business when the U.S. market booms
Answer
Answer: d
QN100: Which of the following is not a factor in the export decision?
a. Experience
b. Human resource and personnel
c. Production capacity
d. Financial capacity
Answer
Answer: b
