Question 1

Indirect exporting but not direct exporting involves sales through sales agents or to foreign distributors.

Accepted Answer

False

Question 2

A transfer of technology is governed by an international licensing agreement.

Accepted Answer

A transfer of technology can be governed by an international licensing agreement, which outlines the terms and conditions for the use and transfer of technology across borders.

Question 3

A home country refers to the country under whose laws the investing corporation was created or is incorporated.

Accepted Answer

A home country refers to the country of origin of the investing corporation, typically where it was created or incorporated.

Question 4

Foreign investment refers to the ownership and active control of ongoing business concerns.

Accepted Answer

Foreign investment involves the ownership and active control of ongoing business concerns in a foreign country.

Question 5

Customs brokers are government inspection officials who regulate the shipment of goods in and out of the country.

Accepted Answer

Customs brokers are not government inspection officials, but rather private individuals or firms who are licensed and regulated by the government to facilitate the import and export of goods on behalf of clients. However, they do work closely with government agencies such as the customs department to ensure compliance with regulations and smooth movement of goods across borders.

Question 6

Global sourcing is the term commonly used to describe the process by which a firm attempts to locate and purchase goods or services on a worldwide basis.

Accepted Answer

Global sourcing involves finding and purchasing goods or services from around the world.

Question 7

The three forms of international business are exporting,importing,and licensing.

Accepted Answer

The three forms of international business are exporting, importing, licensing, franchising, joint ventures, and wholly owned subsidiaries.

Question 8

Trade consists of the import and export of goods or services.

Accepted Answer

Trade means exchanging goods or services between two entities (individuals or countries), and import and export are the two main components of trade. Therefore, the statement is true.

Question 9

Intellectual property rights are valuable assets that can be licensed for use to others through a document collection international sales contract.

Accepted Answer

An international sales contract typically pertains to the sale of goods, not the licensing of intellectual property rights. Licensing of intellectual property is usually handled through a separate licensing agreement.

Question 10

The U.S.has maintained a trade surplus in services.

Accepted Answer

According to data from the U.S. Bureau of Economic Analysis, the United States has consistently maintained a trade surplus in services, which includes industries such as finance, healthcare, and technology. In 2019, the U.S. trade surplus in services was approximately $233 billion.

Question 11

Comparative advantage exists if the costs of production and price received for the goods allow the goods to be sold for a higher price in a foreign country than at home.

Accepted Answer

This is the definition of comparative advantage - the ability to produce a good at a lower opportunity cost than another country, and therefore being able to sell it at a higher price in a foreign market.

Question 12

Because they tend to be more insidious,nontariff barriers are generally a greater barrier to trade than are tariff barriers.

Accepted Answer

Nontariff barriers, such as quotas, licensing requirements, and technical regulations, can be more difficult to identify and overcome than simple tariff barriers, making them a greater challenge to international trade.

Question 13

International licensing agreements are contracts by which the holder of intellectual property grants certain rights in that property to a foreign firm for a specified period of time.

Accepted Answer

International licensing agreements are indeed contracts where the owner of intellectual property grants certain rights to a foreign firm for a specific period of time.

Question 14

The premise that suggests nations should concentrate their efforts on producing those goods that they can make most efficiently with minimal effort and waste is called comparative advantage.

Accepted Answer

The answer of The premise that suggests nations should concentrate...

Question 15

Indirect exporters commonly employ the services of export trading companies and export management companies.

Accepted Answer

Indirect exporters often use the services of export trading companies and export management companies to facilitate their exports. These companies act as intermediaries between the manufacturer and foreign buyers and provide a range of services such as market research, logistics support, and documentation assistance.

Question 16

Exporting is the shipment of goods or rendering of services to a foreign buyer located in a foreign country.

Accepted Answer

Exporting is indeed the shipment of goods or rendering of services to a foreign buyer located in a foreign country.

Question 17

A host country refers to the country under whose laws the investing corporation was created or is headquartered.

Accepted Answer

A host country refers to the country in which an investing corporation operates or has invested, not necessarily the country where it was created or is headquartered.

Question 18

The U.S.'s largest trading partner is Canada.

Accepted Answer

According to U.S. Census Bureau data, Canada is the largest trading partner of the United States in terms of both exports and imports.

Question 19

Small and medium-size companies have little to contribute to the international marketplace.

Accepted Answer

This statement is false. Small and medium-size companies can contribute significantly to the international marketplace by offering unique products and services, providing employment opportunities, and contributing to local economies. Many successful global companies such as Ikea and Ben & Jerry's started as small businesses.

Question 20

Nontariff barriers have a significant influence on how firms make their trade and investment decisions.

Accepted Answer

Nontariff barriers, such as regulations, standards, and licensing requirements, can have a significant impact on the cost and ease of conducting international business, and can affect a firm's decision to enter or exit a particular market. Therefore, it is true that nontariff barriers have a significant influence on how firms make their trade and investment decisions.

Quiz 1: Introduction to International Business