Test 3

Question 1

Pattern of imports and exports that occurs in the absence of trade barriers

Answer 1

Free Trade

Question 2

financial assistance to domestic producers in the form of cash payout, low interest loans, tax breaks, product price support, or other forms

Answer 2

Subsidies

Question 3

Designated geographic region through which merchandise is allowed to pass with lower customs duties and or fewer customs procedures

Answer 3

Foreign Trade Barriers

Question 4

Government tax levied on a product as it enters or leaves a country

Answer 4

Tariff

Question 5

Tariff levied as a percentage of the stated price of an imported product

Answer 5

Ad valorem Tariff

Question 6

Tariff levied as a specific fee for each unit (measured by number, weight) of an imported product

Answer 6

Specific tariff

Question 7

Tariff levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit

Answer 7

Compound tariff

Question 8

a limited or fixed number or amount of people or things, in particular.

Answer 8

Quota

Question 9

Unique version of export quota that a nation imposes on its exports usually at the request of an importing nation

Answer 9

Voluntary Export Restraint

Question 10

Lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota

Answer 10

Tariff Quota

Question 11

Complete ban on trade in one or more products with a particular country

Answer 11

Embargo

Question 12

Restrictions on the convertibility of a currency into other currencies

Answer 12

Currency controls

Question 13

Exporting of a product at a price either lower than the price that the product normally commands in its domestic market or lower than the cost of production

Answer 13

Dumping

Question 14

Additional tariff placed on an imported product that a nation believes is being dumped on its market

Answer 14

Anti dumping duty

Question 15

International organization that enforces the rules of international trade

Answer 15

World Trade Organization

Question 16

Purchase of physical assets or a significant amount of the ownership of a company in another country to gain a measure of management control

Answer 16

Foreign direct investment

Question 17

Investment that does not involve obtaining a degree of control in a company

Answer 17

Portfolio investment

Question 18

Theory stating that a company begins by exporting its product and then later undertakes foreign direct investment as the product moves through its life cycle

Answer 18

International product life cycle

Question 19

Theory stating that when an imperfection in the market makes a transaction less efficient than it could be, a company will undertake foreign direct investment to internalize the transaction and thereby remove the imperfection

Answer 19

Market imperfections

Question 20

Theory stating that firms undertake foreign direct investment when the features of a particular location combine with ownership and internationalize advantages to make a location appealing for investment

Answer 20

Eclectic theory

Question 21

Theory stating that a firm tries to establish a dominant market presence in an industry by undertaking foreign direct investment

Answer 21

Market Power

Question 22

National accounting system that records all receipts coming into the nation and all payments to entities in other countries

Answer 22

Balance of payments

Question 23

When a country exports more goods and services and receives more income from abroad than its imports and pays abroad

Answer 23

Current Surplus Account

Question 24

National account that records transactions involving the purchase and sale of assets

Answer 24

Capital Account