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
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