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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: EasyLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: HardLearning 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 NavigationDifficulty: HardLearning 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 NavigationDifficulty: MediumLearning 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 NavigationDifficulty: EasyLearning 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