Understanding Canadian Business 10Th Canadian Edition By William G Nickels – Test Bank

Understanding Canadian Business 10Th Canadian Edition By William G Nickels – Test Bank

Chapter 03

Competing in Global Markets

True / False Questions

1. Importing is the selling of products to another country.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-01 The Dynamic Global Market

2. Exporting involves the selling of products to another country.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-01 The Dynamic Global Market

3. One reason countries trade with other countries is that even technologically advanced nations cannot produce all the products their people want and need.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-02 Why Trade with Other Nations?

4. Free trade is the movement of goods and services among nations without political or economic barriers.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-02 Why Trade with Other Nations?

5. Global trade includes the exchange of goods and services across national borders.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-02 Why Trade with Other Nations?

6. Absolute advantage is the basis for most global trade.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

7. Comparative advantage theory states that a country should sell to other countries those products that it produces most efficiently and buy from other countries those products it cannot produce as efficiently.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

8. Canada has a comparative advantage in coffee and shoes.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

9. A country has an absolute advantage if it has a monopoly in the production of a specific product or is able to produce it more efficiently than all other nations.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

10. Today there are few examples of absolute advantage in global markets.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

11. According to the theory of comparative advantage, a country should buy from other countries those goods it produces most efficiently.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

12. The comparative advantage theory states that all nations should strive to become self-sufficient in order to enjoy the highest standard of living.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

13. The theory of absolute advantage explains most of today’s global trade.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 03-01 Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Topic: 03-03 The Theories of Comparative and Absolute Advantage

14. Flynn Graphics is a small Canadian firm that began selling its products in the global market a few years ago. Flynn’s global approach is unusual, since the trend has been for small firms to focus on domestic markets, leaving global markets to larger firms.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 03-02 Explain the importance of importing and exporting; and define key terms used in global business.
Topic: 03-04 Getting Involved in Global Trade

15. Anything that can be imported into Canada can be sold within Canada.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of importing and exporting; and define key terms used in global business.
Topic: 03-05 Importing Goods and Services

16. Exports account for about 5% of Canadian jobs.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 03-02 Explain the importance of importing and exporting; and define key terms used in global business.
Topic: 03-06 Exporting Goods and Services

17. Canada in 2009 registered its first favourable balance of trade with the rest of the world.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 03-02 Explain the importance of importing and exporting; and define key terms used in global business.
Topic: 03-07 Measuring Global Trade

18. A favourable balance of trade is also known as a trade surplus.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of importing and exporting; and define key terms used in global business.
Topic: 03-07 Measuring Global Trade

19. A favourable balance of trade occurs when the value of a country’s imports exceeds the value of its exports.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of importing and exporting; and define key terms used in global business.
Topic: 03-07 Measuring Global Trade

20. The balance of payments measures the inflows and outflows of money from tourism, foreign aid, military expenditures and foreign investments as well as flows resulting from exports and imports.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of importing and exporting; and define key terms used in global business.
Topic: 03-07 Measuring Global Trade