Question 1

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When AB-InBev sells Budweiser beer made in St. Louis, MO, to Germany, the sales of its product would be classified as a U.S. __________.

Select one:

  1. countertrade arrangement
  2. export 

Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Learning Objective: 03-02 Explain the importance of importing and exporting; and understand key terms used in global business. Level of Difficulty: 1 Easy Topic: Trade Strategies Used in Reaching Global Markets

  1. import
  2. foreign aid shipment

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The correct answer is: export

Question 2

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Current trade data indicates that the nation of Bogusland exports more to other nations than it imports. Bogusland has:

Select one:

  1. an unfavorable balance of trade.
  2. a trade surplus.

A favorable balance of trade, or trade surplus, occurs when the value of the country’s exports exceeds that of its imports.

  1. a trade deficit.
  2. a low balance of trade.

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The correct answer is: a trade surplus.

Question 3

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Opportunities for college graduates in international business continue to decrease as it gets more expensive to travel abroad.

Select one:

True

False 

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Business graduates today have many opportunities to work for companies that participate in international trade. The consumer market for international trade is over 7 billion, as opposed to the market of over 317 million people in the U.S.

The correct answer is ‘False’.

Question 4

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With respect to free trade, many U.S. citizens prefer “fair trade, not free trade.”

Select one:

True 

False

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Many in the U.S. take the position: “fair trade, not free trade.” Free trade continues to be a hotly debated topic. Figure 3.2 in the textbook provides common pros and cons on this subject.

The correct answer is ‘True’.

Question 5

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Monique’s Unique Tile Boutique offers decorative tile from around the world. The owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer. Monique participates in ___________.

Select one:

  1. importing 

Importing is buying products from other countries.

  1. licensing
  2. dumping
  3. exporting

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The correct answer is: importing

Question 6

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Today, over 90% of the companies doing business globally believe it is important for their employees to have experience working in other countries.

Select one:

True 

False

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The correct answer is ‘True’.

Question 7

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People need to make a living. Under this circumstance, one of the best social programs a firm can offer is:

Select one:

  1. a job.
  2. a commitment to programs that promote green living.
  3. a high-end product line.
  4. flexible work hours.

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The correct answer is: a job.

Question 8

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Which of the following statements best describes a firm’s commitment to its customers?

Select one:

  1. The firm is responsible for offering domestic products to foreign customer markets.
  2. One’s social responsibility to customers is clear-cut.
  3. Customers will only support companies who make a visible effort to keep prices low.
  4. Firms that offer real value will develop a competitive advantage and gain customer trust.

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The correct answer is: Firms that offer real value will develop a competitive advantage and gain customer trust.

Question 9

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Corporate ________ covers issues such as setting minority hiring practices, manufacturing safe products, and minimizing pollution.

Select one:

  1. responsibility 
  2. philanthropy
  3. diversity
  4. structure and strategy

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The correct answer is: responsibility

Question 10

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If a business fails to meet its responsibilities to its employees, which of the following is likely to occur?

Select one:

  1. There is reduced employee turnover.
  2. Employees believe it is easier to get ahead.
  3. More jobs are created.
  4. d. Employees do the minimum needed to get by.

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The correct answer is: Employees do the minimum needed to get by.

Question 11

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Laws that protect us from fraud, theft and violence determine ethical behavior.

Select one:

True

False 

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Ethical behavior requires more than following the law, but following the law is an important first step. Legality is narrower.

The correct answer is ‘False’.

Question 12

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Ethical behavior focuses on treating others fairly.

Select one:

True 

False

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Ethical behavior focuses on proper relations with other people. An ethical person will treat others with honesty and sincerity. Perhaps the essence of this behavior is the Golden Rule, “Do unto to others as you would have them do unto you.”

The correct answer is ‘True’.

Question 13

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In a limited liability partnership, each partner’s risk of losing personal assets is:

Select one:

  1. unlimited.
  2. b. limited to losses that result from his/her own acts and omissions and the acts and omissions of those who work under his/her supervision.
  3. determined entirely by the maximum loss provision established by the articles of co-partnership.
  4. nonexistent.

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The correct answer is: limited to losses that result from his/her own acts and omissions and the acts and omissions of those who work under his/her supervision.

Question 14

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Compared to a sole proprietorship, which of the following is considered an advantage of a general partnership?

Select one:

  1. Ability to pool financial resources
  2. Unlimited liability for all owners
  3. Division of profits among owners
  4. Ease and flexibility in transferring shares of ownership to others

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The correct answer is: Ability to pool financial resources

Question 15

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It is usually easy to start and end a sole proprietorship.

Select one:

True 

False

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The correct answer is ‘True’.

Question 16

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Maria has a lot of self-confidence and business knowledge. She recently opened a bakery as a sole proprietor. She is expecting a high level of profits and is looking forward to:

Select one:

  1. the lower corporate tax rate paid by sole proprietorships.
  2. keeping all of the money she earns except for the taxes she is required to pay.

One of the advantages of a sole proprietorship is the retention of company profit. The owner can earn as much as possible and not have to share that money with anyone else except the government, in taxes.

  1. keeping all of the money she earns since she does not have to pay taxes as a sole proprietor.
  2. easily raising additional large sums of money from the capital markets since she is a sole proprietor.

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The correct answer is: keeping all of the money she earns except for the taxes she is required to pay.

Question 17

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Few people today start their own business.

Select one:

True

False 

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The correct answer is ‘False’.

Question 18

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Although sole proprietors do not pay any special taxes, as the owner of the business you are also an employee of the business, which requires you to:

Select one:

  1. pay income tax only one time each year.
  2. pay self-employment taxes.

Sole proprietors pay self-employment taxes such as Social Security and Medicare.

  1. pay for the right to get an employee identification number.
  2. file an income tax return for the business.

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The correct answer is: pay self-employment taxes.

Question 19

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According to economist Bruce Kirchhoff, small business failures are:

Select one:

  1. lower than traditionally reported.
  2. understated to keep small business creation enthusiasm.
  3. accurate and alarming.
  4. inconclusive.

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The correct answer is: lower than traditionally reported.

Question 20

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Most entrepreneurs are more interested in personal achievement than in power.

Select one:

True 

False

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The correct answer is ‘True’.

Question 21

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Anna recently left a large insurance firm and opened a home-based business preparing medical transcriptions for doctors. Based on recent statistics, she can expect:

Select one:

  1. a negative reaction from friends and family who wonder when she will get a real job.
  2. the emergence of affordable technology will make it less challenging for her to compete with larger firms offering the same service. 

Computer technology has leveled the competitive playing field enabling home-based businesses to look and act as big as their corporate competitors. E-based business activities allow small firms to reach new markets.

  1. the government will discourage her attempts to create a home-based business in the hopes that she will opt for locating in an enterprise zone.
  2. to find security, routine and a paycheck from her new enterprise.

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The correct answer is: the emergence of affordable technology will make it less challenging for her to compete with larger firms offering the same service.

Question 22

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State and city governments have promoted facilities where new businesses can open up shop and share common services such as secretarial, accounting, and legal services. Due to their remarkable success rate, _______________ continue to grow in popularity.

Select one:

  1. enterprise zones
  2. incubators 

Incubator facilities offer new businesses low-cost office space with shared receptionist/secretarial, legal, and accounting services.

  1. intrapreneurial development centers
  2. venture farms

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The correct answer is: incubators

Question 23

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Southwest College received a government grant to establish a business incubator. This facility will offer:

Select one:

  1. local government agencies assistance in obtaining funds for urban renewal.
  2. area businesses advice on employee benefits and ways to reduce taxes.
  3. venture capitalists an opportunity to identify new entrepreneurs.
  4. new businesses low-cost office space with basic business services. 

Incubators are created to reduce the start-up capital needed by new firms. Incubators offer assistance in the critical stage of early development with services such as accounting, legal advice, and secretarial help.

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The correct answer is: new businesses low-cost office space with basic business services.

Question 24

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Small businesses create about __________ percent of the new jobs in the United States.

Select one:

  1. 25
  2. 45
  3. 65 
  4. 85

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The correct answer is: 65

Question 25

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Entrepreneurs are motivated by the desire to earn a profit.

Select one:

True 

False

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The correct answer is ‘True’.

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