Ch. 3 Quiz - The Global Economy

Which of the following is a major export of the United States?

• Cocoa

• Chemicals

• Tea

• Crude Rubber

If the Euro is valued at 1.25 of the US Dollar and you exchange 10 US Dollars, how many Euros will you receive?

• 125 Euros

• 12.50 Euros

• 1.25 Euros

• 10 Euros

Describe the difference between a home economy and a host economy as they relate to multinational companies.

• A home economy is where a multinational company is headquartered, while a host economy is another country where it operates.

• A home economy is where a multinational company operates, while a host economy is where it is headquartered.

• Both home and host economies refer to the same concept in multinational operations.

• A host economy is where a multinational company is headquartered, while a home economy is where it operates.

Trade barriers expand trade between countries.

• True

• False

A trade surplus is when a country imports more than it exports.

• True

• False

The trade barrier that places a tax on imported goods is a(n) ________.

• Quota

• Embargo

• Tariff

• Free Trade Agreement

A country imports $6 billion in goods/services each year and exports $3 billion in goods and services, therefore it is operating at a $3 billion trade deficit.

• True

• False

What are the benefits of a country being a part of an economic community like the EU?

• Increased trade opportunities

• Loss of national sovereignty

• Higher tariffs on imports

• Isolation from global markets

Define export.

• To send goods or services to another country for sale.

• To import goods or services from another country.

• To produce goods domestically.

• To consume goods within the country.

Which of the following organizations was originally created to help countries rebuild after WWII and now gives aid to underdeveloped countries to improve infrastructure?

• WTO

• IMF

• World Bank

• United Nations