FBLA Global Business Practice Questions with Explanations
Questions
Business activities that involve more than one country are:
- International business
- Domestic business
- Local commerce within one community
- Intrastate trade
The growing interconnection of the world's economies, cultures, and populations is:
- Globalization
- Nationalization
- Protectionism
- Isolationism
A company with operations and facilities in many countries is a(n):
- Multinational corporation
- Domestic firm
- Sole proprietorship
- Local cooperative owned by its members
The country where a multinational company's headquarters is located is its:
- Home country
- Host country
- Third country
- Free trade zone
A country in which a foreign company operates is the:
- Host country
- Home country
- Origin country
- Mother country
Goods and services sold to buyers in other countries are:
- Exports
- Imports
- Tariffs
- Quotas
Goods and services bought from other countries are:
- Imports
- Exports
- Subsidies
- Embargoes
A country's ability to produce a good at a lower opportunity cost than another country is its:
- Comparative advantage
- Absolute advantage
- Trade surplus
- Market share
A country's ability to produce more of a good than another country with the same resources is:
- Absolute advantage
- Comparative advantage
- Competitive parity
- Free trade
The economic theory that a nation's wealth depends on exporting more than it imports and building gold reserves is:
- Mercantilism
- Comparative advantage
- Free trade
- Globalization
Countries that are already highly industrialized with high per capita income are:
- Developed countries
- Developing countries
- Least developed countries
- Emerging countries
Countries moving from agricultural to industrial economies with rapid growth are:
- Emerging markets
- Developed countries
- Command economies
- Traditional economies
In the acronym BRICS (Brazil, Russia, India, China, and one more founding-era member), the "S" stands for:
- South Africa
- Spain
- Sweden
- Saudi Arabia
Production, sales, and investment spread across the world with products designed for global markets describe:
- Globalization of markets
- Domestic expansion
- Isolationism
- Protectionism
Exporting a product to a nearby country that shares a language and culture is lower risk because of reduced:
- Psychic distance
- Comparative advantage
- Exchange rates
- Tariff schedules
A tax on imported goods is a(n):
- Tariff
- Quota
- Embargo
- Subsidy
A limit on the quantity of a product that can be imported is a(n):
- Import quota
- Tariff
- Embargo
- Exchange control
A government ban on trade with another country is a(n):
- Embargo
- Quota
- Tariff
- Sanction exemption
Government payments to domestic producers to help them compete with foreign firms are:
- Subsidies
- Tariffs
- Quotas
- Duties
Selling goods in a foreign market below their fair price or below cost is:
- Dumping
- Bartering
- Licensing
- Countertrade
Using government policies to protect domestic industries from foreign competition is:
- Protectionism
- Free trade
- Globalization
- Outsourcing
Trade between nations without tariffs or other barriers is:
- Free trade
- Protectionism
- Mercantilism
- Isolationism
Restrictions such as product standards, licensing requirements, or complex customs procedures that limit imports without a tax are:
- Nontariff barriers
- Tariffs
- Subsidies
- Floating exchange rates
A voluntary agreement by an exporting country to limit its exports to another country is a:
- Voluntary export restraint
- Countervailing tariff
- Embargo
- Subsidy
Arguments that a young industry needs protection until it can compete globally are the:
- Infant industry argument
- National security argument
- Comparative advantage theory
- Dumping argument
Economic penalties such as trade restrictions imposed on a country to change its behavior are:
- Sanctions
- Subsidies
- Tariff reductions
- Trade credits
A tariff that charges a fixed amount per unit, such as $5 per ton, is a:
- Specific tariff
- Ad valorem tariff
- Compound duty
- Protective quota
A tariff charged as a percentage of an import's value is a(n):
- Ad valorem tariff
- Specific tariff
- Embargo
- Import license
An imported product valued at $8,000 faces a 15% ad valorem tariff. The tariff is:
- $1,200
- $800
- $15
- $9,200
A permit required by the government to import or export certain goods is a(n):
- Trade license
- Letter of credit
- Bill of lading
- Certificate of origin
The global organization that sets trade rules and settles disputes among member nations is the:
- World Trade Organization
- International Monetary Fund (IMF)
- World Bank
- United Nations
The trade agreement that preceded the WTO, signed in 1947, was:
- GATT
- NAFTA
- USMCA
- The Marshall Plan
The trade agreement among the U.S., Mexico, and Canada that took effect in 2020 is the:
- USMCA
- NAFTA
- CAFTA-DR
- TPP
The economic and political union of 27 European countries is the:
- European Union
- North Atlantic Treaty Organization
- OPEC
- ASEAN
The common currency used by many EU member countries is the:
- Euro
- Pound sterling
- Franc
- Deutsche mark
The 2016 vote and 2020 departure of the United Kingdom from the European Union is known as:
- Brexit
- Grexit
- The Maastricht Treaty
- The Schengen Agreement
The agreement that allows passport-free travel among many European countries is the:
- Schengen Agreement
- Maastricht Treaty
- Treaty of Rome
- Brexit Accord
A regional organization of Southeast Asian nations that promotes economic cooperation is:
- ASEAN
- APEC
- OPEC
- NATO
An organization of oil-exporting nations that coordinates petroleum policies is:
- OPEC
- ASEAN
- WTO
- IMF
The international organization that promotes global monetary cooperation and lends to countries with balance-of-payments problems is the:
- International Monetary Fund
- World Bank
- WTO
- Organisation for Economic Co-operation and Development
The organization that provides loans and grants to developing countries for development projects is the:
- World Bank
- IMF
- WTO
- European Central Bank
A group of countries that remove trade barriers among themselves but keep separate barriers toward outsiders is a:
- Free trade area
- Customs union
- Common market
- Economic union
A group of countries that removes internal trade barriers and adopts common external tariffs is a:
- Customs union
- Free trade area
- Political union
- Cartel
The highest level of economic integration, with common economic policies and often a common currency, is an:
- Economic union
- Free trade area
- Customs union
- Bilateral agreement
An agreement between two countries is called:
- Bilateral
- Multilateral
- Regional
- Unilateral
The forum of 21 Pacific Rim economies that promotes free trade in the region is:
- APEC
- ASEAN
- OPEC
- NAFTA
The agreement that reduced trade barriers among the U.S., Central American countries, and the Dominican Republic is:
- CAFTA-DR
- USMCA
- Mercosur
- EU
The South American trade bloc that includes Brazil and Argentina is:
- Mercosur
- ASEAN
- APEC
- USMCA
Selling domestically produced goods to buyers in another country is:
- Exporting
- Licensing
- Foreign direct investment
- Franchising
Allowing a foreign company to use your patent, trademark, or technology in exchange for fees is:
- Licensing
- Exporting
- A joint venture
- A wholly owned subsidiary