KKKF4134 QUIZ NO 1 10TH OCT 2013

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The concept of free trade means: buyers and sellers contract with each other and offer some goods at no cost. goods and services can be traded freely across borders without political and/or economic barriers. there is no exchange of currency for these products. there is no exchange of currency, but the trading partners determine the value of the product and perform a bartering process to exchange goods. Comparative advantage means ?

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The best way for a nation to ensure full employment is to be totally selfsufficient rather than relying on other nations to obtain goods and services. Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce efficiently from other nations. The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships. A nation should produce those goods for which domestic demand is comparatively strong, and should import those goods for which domestic demand is comparatively weak. A favorable balance of trade occurs when the value of:

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imports equal the value of expo the cash inflows equal the value of the cash outflows. the value of imports is less than the value of exports. the value of the dollar is greater than the value of the Euro.

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The _____________ is the total value of a nation's exports compared to its imports measured over a specific period of time. A B C D balance of payments balance of trade surplus balance of trade deficit balance of trade

military expenditures. __________ is an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell the parent company's product or service to others in a given territory in a specified manner. A B C D balance of payments balance of trade surplus balance of cash flows balance of trade 6 __________ is the practice of selling a product in foreign countries for a lower price than the good is sold in the producing country. Outsourcing. Licensing. A B C D franchising contract manufacturing Import sourcing export trading 8 9 . A B C D Franchising Contract manufacturing Import trading Export trading When a company's strategy is __________ the firm makes arrangements for a foreign manufacturer to produce the product. foreign aid. and foreign investment. A B C D Deflating Countertrading Inflating Dumping 7 Granting a foreign company the right to manufacture your product or to use your firm's trademark in return for a fee is called: A B C D A joint venture. A foreign subsidiary. plus money flows coming from other factors such as tourism. The domestic company's label and/or trademark are attached to the completed product. and money leaving the country for imports.5 The __________ is the difference between money flowing into a country from exports.

monopolistic. without sharing the cost of risk. oligopoly. oligopoly. oligipoly. A B C D multinational cooperative shared venture global franchise strategic alliance Key economic indicators for a country A B C D GDP and Price Indexes GDP. monopoly 11 12 . monopoly Perfect.10 A __________ represents a long-term partnership between two or more companies established to help each firm build competitive market advantages. Price Indexes and unemployment rates GDP Price Indexes 4 types of competition in free market A B C D Perfect. monoplastic. monopolic Open market. oligopoly. monopolistic. monopoly Open market. monopolistic.