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Exam 3: B: Exploring Global Business

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Question 31

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The World Trade Organization (WTO) was established by GATT to oversee the provisions of the Uruguay Round.

A) True
B) False

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Question 32

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Devaluation increases the cost of foreign goods, while it decreases the cost of domestic goods to foreign firms.

A) True
B) False

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Question 33

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Trade restrictions limit choices for consumers but have no effect on the prices charged for the products.

Strategic alliances are partnerships formed to create competitive advantage on a worldwide basis.

An international organization that includes the United States and several other countries and whose goal is to reduce or eliminate tariffs and other barriers to world trade is commonly referred to as GATT.

If a country imports more than it exports, its balance of trade is said to be favorable.

A bill of lading is issued by the transport carrier to the exporter to prove that merchandise has been shipped.

An international bank that makes short-term loans to countries experiencing balance of payment deficits is called a multilateral development bank.

The total flow of money into a country less the total flow of money out of the country over some period of time is called the nation's balance of trade.

The International Monetary Fund (IMF) makes short-term loans to developing countries experiencing balance-of-payment deficits.

Trade restrictions usually have no immediate or long-term economic consequences.

When the United States recently imported $2,661 billion in merchandise and services and exported $2,103 billion, it had a trade deficit.

The total value of a nation's exports less the total value of its imports is known as the balance of payments.

The participants in the Kennedy Round have succeeded in reducing tariffs by less than 20 percent.

A tariff is a tax levied on a particular foreign product entering a country.

It is appropriate for a country to impose trade restrictions on exports that might endanger its national security.

Balance of payments is a much broader concept than balance of trade.

The United States has consistently enjoyed a trade surplus.

An important and practical issue for domestic firms dealing with foreign customers is securing payment.

The TPP was agreed upon in the 1970s by a small group of Central American countries.