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Chapter 4 and 5

Chapter 4/5 Questions World Trade

If a nation has the ability to produce a product at lower cost than other countries, that nation has a comparative advantage.
Although it is rare, a country that is the sole producer of a product has: an absolute advantage
Specialization of production among nations: allows ea. nation to focus on producing what it's best,consumers have access to most effic producers of goods & services they want to buy, & is the basis of intern'l trade & is major means of raising the standard of living for people throughout the world.
What does NOT affect the U. S. balance of payments? congressional budget actions
U. S. firms operating abroad must conform to: U. S. law., international regulations, and host country law.
As a result of U. S. ability to grow wheat, there is a surplus. What is the most profitable short-term method to handle the surplus? export the wheat
At the end of the year, a country with limited resources determined that the amount of goods it imported was approximately 30 percent more than the amount of domestically produced goods it exported. The country has experienced: an unfavorable balance of trade.
To help reverse an unfavorable balance of payments, a country might: start a campaign to encourage foreign tourists.
Business firms that invest in foreign countries may be contributing to their own country’s: unfavorable balance of payments.
Obstacles to international trade that occur due to uncertain transportation, poor communications systems, and unreliable utility systems are examples of: weak infrastructure.
The price of imported goods is increased by a devaluation of a nation’s currency
A floating exchange rate: varies according to market conditions
The international business arrangement whereby Saudi Arabia sells oil to Japan in return for fresh water would be an example of: countertrade.
The lender of last resort for troubled nations is the: International Monetary Fund (IMF).
A tax on imports is a(n): tariff.
A foreign firm given the right to right to produce, sell, or utilize a trademark, patent, or process in exchange for royalty payments is a(n): license holder.
The Small Business Administration defines a small business as: ALL ARE TRUE a. independently owned and managed. b. a firm that is not dominant in its industry. c. a firm that meets industry-specific size standards for income or number of employees
The federal government agency that is set up to work with small businesses is the: SBA.
Which of the following industries tends to attract small business? ALL ARE TRUE a. retailing b. agriculture c. services d. construction
Home-based businesses: leverage the internet and the availability of technology to communicate.
A description of the firm’s target market and marketing plan, as well as detailed financial forecasts is known as: the financial and marketing section.
A description of why the company was founded and what it intends to do accomplish its goals is known as: mission and vision.
The section of the business plan that acknowledges and outlines a strategy for dealing with uncertainty is known as: assessment of risks.
The who, what, where, when, why, and how are answered in: the executive summary
The most widely used form of business ownership is: sole proprietorship
Additional capital is most easily obtained if the form of ownership is a: corporation.
Limited financial liability is the most important advantage of which form of ownership? corporation.
A corporation in which employees share in whatever profit their company earns is known as: employee-owned corporations.
These types of firms are known as the backbone of American business: family-owned business
These types of organizations are commonly found in sectors such as museums, libraries, and hospitals: not-for-profits.
When a group of wheat farmers collectively purchases a grain elevator, this is an example of: cooperative ownership.
If the city of Los Angeles owns a parking garage on Main Street, the garage is said to be: privately owned.
These types of firms result when private investors are unwilling to invest in a high-risk project: cooperative ownership.
These types of firms are commonly found among agricultural businesses: cooperatives.
When two or more firms combine to form one company, we say that the firms have: merged.
When one firm purchases the property and assumes the liabilities of another firm, there has been a(n): acquisition.
If a sporting goods manufacturer combines with a firm that operates sporting goods retailers, this would be an example of: a vertical merger.
If this sporting goods manufacturer combined with a food company, this would be an example of: a conglomerate merger.
If this sporting goods manufacturer combines with a manufacturer of tennis nets, this would be an example of: a divestiture.
One advantage of purchasing a franchise is: the franchisee gets a tested business model.
When managers or a group of stockholders buy up all of a firm’s stock, the firm then becomes: a privately owned corporation.
When two firms in the same industry merge, it is called a(n): horizontal merger.
horizontal merger. alien corporation.
Stockholders who have a prior claim to dividends and assets are known as: preferred stockholders.
The tier of management responsible for coordinating the day-to-day operations of a firm is: supervisory management.
The purpose of a business plan should be to: a. all ARE TRUE b. create a document that can be shown to potential investors, lenders, or suppliers. c.decide upon the business’s organization& structure. d.spell out marketing and financial plans. e.clarify the entrepreneur’s ideas for a business.
If one firm acquires the property and assumes the obligations of another, it is called a(n): acquisition.
Employee ownership: ALL ARE TRUE a. is situation in which a firm’s workers buy shares of stock in the business. c. means employees can share in whatever profits their company earns. d. is growing.
When a government agency or unit owns and operates an organization, it is known as: public ownership.
The formal document that must be submitted to the state in order to form a corporation is known as: a corporate charter
The group who is elected by stockholders and who hires top management is called: the Board of Directors
The owners of a corporation are known as the stockholders
To ensure that small businesses receive a reasonable portion of government procurement contracts, certain government contracts (or portions of those contracts) are reserved for small businesses in what are known as: set-aside programs.
Business incubators: are generally sponsored by local community agencies. b. provide shared space and services for new small businesses. c. often offer management counseling and in-house mentors. ALL ARE TRUE
Created by: tiffanie1719



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