QUESTION Although it normally involves much longer-term commitments, franchising is essentially the service industry version of: A. exporting. B. licensing. C. foreign direct investment. D. greenfield investment. E. diversifying. ANSWER B
Date: September 3rd, 2020
QUESTION Firms for which licensing is not a good option include those in: A. low-technology industries. B. global oligopolies. C. industries characterized by low cost pressures. D. industries where transportation costs are high. E. industries which need to have low control over foreign operations. ANSWER B
Date: September 3rd, 2020
QUESTION As with free trade in general, regional economic integration creates gain for consumers, but it can be challenging for some producers. Indicate whether the statement is true or false. ANSWER TRUE By regional economic integration we mean agreements among countries in a geographic region to reduce, and ultimately remove, tariff and nontariff barriers […]
Date: September 3rd, 2020
QUESTION In a free trade area, all barriers to the trade of goods and services among member countries are removed and a common external trade policy is adopted. Indicate whether the statement is true or false. ANSWER FALSE In a free trade area, all barriers to the trade of goods and services among member […]
Date: September 3rd, 2020
QUESTION A common market has no barriers to trade among member countries, includes a common external trade policy, and allows factors of production to move freely among members. Indicate whether the statement is true or false. ANSWER TRUE A common market has no barriers to trade between member countries, includes a common external trade […]
Date: September 3rd, 2020
QUESTION A political union addresses the issue of how to make a coordinating bureaucracy accountable to the citizens of member nations of an economic union. Indicate whether the statement is true or false. ANSWER TRUE The move toward economic union raises the issue of how to make a coordinating bureaucracy accountable to the citizens […]
Date: September 3rd, 2020
QUESTION The emphasis of the European Free Trade Association has been on free trade in consumer goods. Indicate whether the statement is true or false. ANSWER FALSE The emphasis of the European Free Trade Association (EFTA) has been on free trade in industrial goods. Agriculture was left out of the arrangement, each member being […]
Date: September 3rd, 2020
QUESTION In a customs union, a common currency is adopted. Indicate whether the statement is true or false. ANSWER FALSE A customs union eliminates trade barriers between member countries and adopts a common external trade policy. Establishment of a common external trade policy necessitates significant administrative machinery to oversee trade relations with nonmembers. It […]
Date: September 3rd, 2020
QUESTION Economic theories suggest that free trade and investment is a positive-sum game, in which all participating countries stand to gain. Indicate whether the statement is true or false. ANSWER TRUE Economic theories of international trade predict that unrestricted free trade will allow countries to specialize in the production of goods and services that […]
Date: September 3rd, 2020
QUESTION Which of the following is a major type of foreign investment risk that is insurable through government-backed programs? A. Lack of funds B. Risk of transaction loss C. Poor strategic tie-ups D. Risks of expropriation E. Losses due to natural calamities ANSWER D
Date: September 3rd, 2020
