QUESTION Myra is a firm producing premium handbags for women. These bags are manufactured and patented in the country of Ceria. Manufacturers in the country of Argonia create counterfeit Myra bags and sell them in the local markets of Argonia. These bags are sold at almost similar prices to the original in other countries. Which […]
QUESTION Which of the following does NOT reinforce that the best interests of international business are served by a free trade stance? A. The increasing integration of the world economy B. The internationalization of production C. The trend toward greater protectionism D. The drawbacks of government intervention E. The dispersion of production activities ANSWER […]
QUESTION Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism? A. The slackness of enforcement agencies B. WTO’s noncommittal approach to antidumping laws C. Bilateral VERs which subvert antidumping laws D. The rather vague definition of what constitutes “dumping” E. Lack of consensus among […]
QUESTION Which of the following has been excluded from the agenda for the Doha round of WTO talks that began in 2001? A. Reducing barriers to cross-border investment B. Phasing out subsidies to agricultural producers C. Limiting the use of antidumping laws D. Attempts to tie trade to labor standards in a country E. Cutting […]
QUESTION The threat of antidumping action: A. helps the firm raise capital in the primary market. B. limits the ability of a firm to raise prices in response to high demand. C. enhances the firm’s ability to disperse its productive activities in an efficient manner. D. limits the ability of a firm to use aggressive […]
QUESTION When a firm exports its products to a foreign country, foreign direct investment occurs. Indicate whether the statement is true or false. ANSWER FALSE Foreign direct investment (FDI) occurs when a firm invests directly in facilities to produce or market a product in a foreign country. According to the U.S. Department of Commerce, […]
QUESTION The attractiveness of exporting increases in comparison to FDI or licensing when products have a low value-to-weight ratio. Indicate whether the statement is true or false. ANSWER FALSE The viability of an exporting strategy is often constrained by transportation costs and trade barriers. When transportation costs are added to production costs, it becomes […]
QUESTION By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing. Indicate whether the statement is true or false. ANSWER TRUE Transportation costs aside, some firms undertake foreign direct investment as a response to actual or threatened trade barriers such as import tariffs or […]
QUESTION Why is retaliation by government intervention a risky strategy? A. It encourages dumping by foreign companies. B. It could result in increased tariff barriers by the country that is being pressured. C. It may expose certain industries that are important for national security to foreign competition. D. It allows firms to sell goods in […]
QUESTION Which of the following is a provision of the Uruguay Round Agreement? A. A wide range of services were to be excluded from GATT fair trade and market access rules. B. Tariffs on industrial goods were to be raised by more than one-third, and tariffs were to be scrapped on more than 50 percent […]
