Test Your Knowledge About Global Business And Economics! Trivia Quiz

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  • 1/37 Questions

    Which of the following measures the extent to which a government equitably provides its people with a long and healthy life, an education, and a decent standard of living?

    • Category development index
    • Gross national product index
    • Human development index
    • Purchasing power index
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About This Quiz

Test Your Knowledge About Global Business And Economics! Business is the act of selling and buying goods and services, and in the world today, there are some businesses that have made an impact on the world economy. By taking this quiz, you will get just how much you know about the world economy, do give it a shot!

Test Your Knowledge About Global Business And Economics! Trivia Quiz - Quiz

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  • 2. 

    The condition that results when the value of a nation's exports is greater than the value of its imports is called ________.

    • A trade deficit

    • A trade surplus

    • Mercantilism

    • Dumping

    Correct Answer
    A. A trade surplus
    Explanation
    A trade surplus occurs when a nation's exports exceed its imports, meaning that it is selling more goods and services to other countries than it is buying from them. This can result in an increase in the nation's foreign reserves and can be seen as a positive indicator of economic strength.

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  • 3. 

    The GDP per capita of a country is lower than that of France. if the GDP per capita of the country is adjusted for PPP, the country's revised GDP is higher than that of France. which of the following is most likely true about the country?

    • The cost of living in the country is higher than that of France.

    • The cost of living in the country is lower than that of France

    • The cost of living in the country is approximately equal to that of France

    • The cost of living in the country has increased over the past decade

    Correct Answer
    A. The cost of living in the country is lower than that of France
    Explanation
    If the GDP per capita of a country is lower than that of France, but the country's revised GDP is higher than that of France when adjusted for PPP, it suggests that the cost of living in the country is lower than that of France. This means that the country is able to produce more goods and services for a lower cost, resulting in a higher GDP when adjusted for purchasing power parity.

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  • 4. 

    Nations having the poorest infrastructures and lowest personal incomes are called _____

    • Developed countries

    • Newly industrialized countries

    • Emerging markets

    • Developing countries

    Correct Answer
    A. Developing countries
    Explanation
    Developing countries refers to nations with poor infrastructure and low personal incomes. These countries are still in the process of improving their economic and social conditions. They typically have a lower level of industrialization and rely heavily on agriculture and primary industries. The term "developing" signifies their ongoing efforts to progress and achieve higher standards of living for their citizens.

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  • 5. 

    When a country's currency is weak the price of its

    • Exports on the world markets declines and the price of imports increases

    • Exports and imports on world markets declines

    • Exports and imports on world markets increases

    • Exports on the world markets increases and the price of imports declines

    Correct Answer
    A. Exports on the world markets declines and the price of imports increases
    Explanation
    When a country's currency is weak, the price of its exports on the world markets declines. This is because a weak currency makes the country's goods and services cheaper for international buyers, leading to a decrease in export prices. On the other hand, the price of imports increases because a weak currency makes it more expensive to purchase goods and services from other countries. Therefore, a weak currency leads to a decline in export prices and an increase in import prices on the world markets.

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  • 6. 

    The likelihood that a society will undergo governmental changes that negatively affect local business activity is known as ________.

    • Volatility risk

    • Systemic risk

    • Political risk

    • Credit risk

    Correct Answer
    A. Political risk
    Explanation
    Political risk refers to the likelihood that a society will undergo governmental changes that negatively affect local business activity. It includes factors such as changes in government policies, regulations, political instability, and geopolitical events that can impact the business environment. Volatility risk refers to the potential for investment values to fluctuate unpredictably. Systemic risk refers to the risk of widespread financial instability. Credit risk refers to the risk of default on debt payments.

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  • 7. 

    The GDP per capita of a country is higher than that of Thailand. If the GDP per capita of the country is adjusted for PPP, the country's revised GDP is lower than that of Thailand. Which of the following is most likely true about the country?

    • There are fewer goods available for purchase in the country than in Thailand.

    • The cost to buy everyday goods in the country is approximately the same as in Thailand

    • It costs less to buy everyday goods in the country than in Thailand

    • It costs more to buy everyday goods in the country than in Thailand

    Correct Answer
    A. It costs more to buy everyday goods in the country than in Thailand
    Explanation
    If the GDP per capita of a country is higher than that of Thailand but the country's revised GDP is lower than that of Thailand when adjusted for PPP, it indicates that the cost of goods in the country is higher compared to Thailand. This implies that it costs more to buy everyday goods in the country than in Thailand.

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  • 8. 

    A Better Mousetrap, Inc., is a manufacturing company that sells pest control systems. Recently the company launched an innovative mousetrap with a unique design that has been selling well in the  U.S. market. Senior vice president Marc Wallace recommends expanding sales overseas as a way  to increase company revenues In reviewing his fulfillment process, Jack realizes that different customers opt for different types of shipping based on their preferences. Which of the following would most likely help Jack provide better shipping service to his customers?

    • Introduce overnight delivery but at a very high cost

    • Reduce costs by implementing a cheaper but slower delivery method

    • Implement a universal delivery method to capitalize on efficiency gains

    • Offer customers a choice of delivery methods with different speeds and costs

    Correct Answer
    A. Offer customers a choice of delivery methods with different speeds and costs
    Explanation
    Offering customers a choice of delivery methods with different speeds and costs would most likely help Jack provide better shipping service to his customers. This allows customers to select the delivery option that best suits their preferences and needs, whether they prioritize speed or cost. By offering this flexibility, Jack can cater to a wider range of customer preferences and enhance their overall satisfaction with the shipping service.

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  • 9. 

    GMI is a fast-growing U.S. company that wants a production system that makes each of its product's two components in the location where the cost of production is lowest. The components will then be taken to maquiladoras for final assembly. GMI purchased an existing company in Brazil to produce component A and built a subsidiary in Thailand to produce component B. GMI's investments are examples of ________.

    • Foreign direct investment

    • Portfolio investment

    • Merger

    • Horizontal integration

    Correct Answer
    A. Foreign direct investment
    Explanation
    GMI's investments in purchasing an existing company in Brazil and building a subsidiary in Thailand demonstrate foreign direct investment. This is because GMI is directly investing in and controlling the production of the components in different countries, with the goal of taking advantage of the lowest production costs in each location. This type of investment involves a significant level of ownership and control over the foreign assets, which aligns with GMI's strategy in this scenario.

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  • 10. 

    Susan is the CEO of Grape Fizz, a global drinks-manufacturing company. She wishes to set up production facilities in other countries and has been advised to assess the political system of each country before she does so. Susan decides not to set up production facilities in Konesia because it's business laws are vague and are often interpreted according to the convenience of the government. Bribery is a common feature in conducting business deals there and a refusal to pay up is not an option. What kind of government does Konesia have?

    • Democratic

    • Theocratic

    • Totalitarian

    • Pluralist

    Correct Answer
    A. Totalitarian
    Explanation
    Based on the information provided, Konesia can be inferred to have a totalitarian government. This is because the business laws are vague and subject to interpretation by the government, indicating a lack of transparency and rule of law. The presence of bribery as a common feature suggests a lack of accountability and a system where the government has significant control and influence over business dealings. In a totalitarian government, there is typically a single ruling party or leader who exercises absolute control over all aspects of society, including the economy.

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  • 11. 

    The danger of trade dependency is that ________

    • It often leads to the exploitation of developed countries

    • Political turmoils in a country might affect all dependent countries

    • The countries involved in trade often get into rivalry over trade tariff issues

    • It is difficult to end trade activities with current trade partners and find new trade partners

    Correct Answer
    A. Political turmoils in a country might affect all dependent countries
    Explanation
    Trade dependency refers to a situation where a country heavily relies on trade with other countries for its economic growth and stability. The given answer suggests that one of the dangers of trade dependency is that political turmoils in a country can have a ripple effect and impact all the countries that are dependent on it for trade. This is because political instability can disrupt the functioning of the government, create economic uncertainties, and lead to trade disruptions. As a result, all the countries that are dependent on trade with that country may suffer from the consequences of political turmoils, such as decreased trade volumes, increased trade barriers, and economic instability.

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  • 12. 

    The lowering of taxes in the U.S. by it's government is an example of the       

    • Fiscal policy

    • Monetary policy

    • Social policy

    • Foreign affairs policy

    Correct Answer
    A. Fiscal policy
    Explanation
    The lowering of taxes in the U.S. by its government is an example of fiscal policy. Fiscal policy refers to the government's use of taxation and spending to influence the economy. By lowering taxes, the government is aiming to stimulate economic growth and encourage consumer spending. This policy can help boost business investment, increase disposable income, and stimulate overall economic activity.

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  • 13. 

         is the process of identifying and selecting an organization's objectives and deciding how the organization will achieve those objectives

    • Stratification

    • Planning

    • Economic transition

    • Value chain analysis

    Correct Answer
    A. Planning
    Explanation
    Planning is the process of identifying and selecting an organization's objectives and deciding how the organization will achieve those objectives. It involves setting goals, determining the actions needed to achieve those goals, and allocating resources accordingly. Planning helps organizations to anticipate and prepare for future challenges, make informed decisions, and align their efforts towards the desired outcomes. It is a crucial step in the management process and helps organizations to stay focused and organized in their pursuit of success.

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  • 14. 

    Developing a market-potential indicator for an emerging market is useful for a company planning on ________.

    • Exporting

    • Licensing

    • Licensing

    • Acquisitions

    Correct Answer
    A. Exporting
    Explanation
    Developing a market-potential indicator for an emerging market is useful for a company planning on exporting because it helps them assess the potential demand and profitability of their products or services in that market. By analyzing factors such as market size, growth rate, competition, and consumer preferences, the company can make informed decisions about entering and operating in the market. This indicator enables the company to identify opportunities, understand market dynamics, and develop effective strategies to successfully sell their products or services in the emerging market.

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  • 15. 

                                            is an activity under the monetary policy of a nation. 

    • Increasing taxes

    • Lowering taxes

    • Increasing government spending

    • Selling government securities

    Correct Answer
    A. Selling government securities
    Explanation
    Selling government securities is an activity under the monetary policy of a nation. This refers to the sale of bonds or other financial instruments issued by the government to the public or financial institutions. By selling government securities, the government can control the money supply in the economy. When the government sells securities, it reduces the amount of money in circulation, which helps to curb inflation and control interest rates. Therefore, selling government securities is a tool used by central banks to implement monetary policy.

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  • 16. 

    The key element of political risk of greatest concern for global companies is ________.

    • The cost of transporting materials and goods

    • Unforeseen political change

    • Currency and liquidity problems

    • Letting past political events blind future opportunities

    Correct Answer
    A. Unforeseen political change
    Explanation
    Unforeseen political change is the key element of political risk that global companies are most concerned about. This refers to unexpected shifts in political conditions, such as changes in government, policies, regulations, or geopolitical events, that can have a significant impact on business operations and profitability. These changes can create uncertainty, disrupt supply chains, lead to increased costs, and even result in the loss of assets or investments. Therefore, global companies prioritize understanding and managing the risks associated with unforeseen political change to safeguard their operations and mitigate potential negative consequences.

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  • 17. 

    GMI's purchase of the Brazilian company is best classified as a(n) ________

    • Greenfield investment

    • Portfolio investment

    • Acquisition

    • Demerger

    Correct Answer
    A. Acquisition
    Explanation
    The correct answer is acquisition. This is because GMI's purchase of the Brazilian company indicates that GMI is acquiring the company, implying that they are taking ownership and control of the company. This is different from a greenfield investment, which involves starting a new venture from scratch, and a portfolio investment, which involves investing in a company's stocks or securities without gaining control. A demerger refers to the separation of a company into two or more entities, which is not applicable in this scenario.

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  • 18. 

    Happyland, a country of about 48 million people with beautiful beaches, vast natural resources, and a highly skilled labor force, is encouraging foreign direct investment flows. The country has been exporting textiles, computer hardware, and software. The net result of trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad Looking at Happyland's international trade situation, the country is experiencing a ________.  

    • Current account deficit

    • Capital account deficit

    • Current account surplus

    • Capital account surplus

    Correct Answer
    A. Current account surplus
    Explanation
    Based on the information provided, Happyland is exporting more goods and services and receiving more income from abroad than it is importing and paying abroad. This indicates that the country is experiencing a current account surplus. A current account surplus means that the country's exports and income from abroad are greater than its imports and payments abroad, resulting in a positive balance in the current account.

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  • 19. 

    If Happyland is successful at attracting foreign investment, transactions involving those investments would appear in the country's ________

    • Capital

    • Services

    • Income payments

    • Merchandise

    Correct Answer
    A. Capital
    Explanation
    If Happyland is successful at attracting foreign investment, transactions involving those investments would appear in the country's capital. This is because foreign investments typically involve the transfer of capital from one country to another. Capital refers to financial assets or resources that are used to generate income or produce goods and services. Therefore, transactions related to foreign investments would be recorded under the capital account in the country's balance of payments.

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  • 20. 

    Twenty-six nations of Moonland region, have decided to cooperate with one another to eliminate trade barriers among them and create the Moonland Union. They are not sure, however, to what extent they want to cooperate. As the first stage of cooperation, the countries agree to remove all barriers to trade among themselves. Each country determines its own barriers against nonmembers. At this stage, Moonland Union can be described as a ________.

    • Free trade area

    • Political union

    • Common market

    • Customs union

    Correct Answer
    A. Free trade area
    Explanation
    At this stage, the Moonland Union can be described as a free trade area because the countries have agreed to eliminate trade barriers among themselves. However, they have not yet established a common external trade policy or a common currency, which are characteristics of a customs union or a common market. Additionally, there is no indication that the countries have formed a political union or have integrated their political systems. Therefore, the correct answer is a free trade area.

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  • 21. 

           is the process of identifying an selecting an organization's objectives and deciding how the organization will achieve those objectives.

    • Strafication

    • Planning

    • Economic transition

    • Value chain analysis

    Correct Answer
    A. Planning
    Explanation
    Planning is the process of identifying and selecting an organization's objectives and deciding how the organization will achieve those objectives. It involves setting goals, determining the actions and resources needed to achieve those goals, and creating a roadmap for implementation. Planning helps organizations to prioritize and allocate resources effectively, make informed decisions, and ensure that all efforts are aligned towards the achievement of the desired objectives.

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  • 22. 

    ________ refers to management of the physical flow of products from the point of origin as raw materials to end users as finished products.

    • Operations research

    • Logistics

    • Warehousing

    • Environmental scanning

    Correct Answer
    A. Logistics
    Explanation
    Logistics refers to the management of the physical flow of products from the point of origin as raw materials to end users as finished products. It involves coordinating and organizing various activities such as transportation, storage, and distribution to ensure that products reach their intended destination efficiently and effectively. Logistics plays a crucial role in supply chain management and is essential for businesses to meet customer demands and maintain a competitive advantage.

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  • 23. 

    The French government buying its own securities on the open market is part of the        of France

    • Fiscal policy

    • Monetary policy

    • Industrial policy

    • Investment policy

    Correct Answer
    A. Monetary policy
    Explanation
    The French government buying its own securities on the open market is part of the monetary policy. This is because the purchase of securities by the government affects the money supply and interest rates in the economy. By buying its own securities, the government increases the money supply, which can stimulate economic growth and lower interest rates. This is a tool used by central banks to manage the economy and control inflation.

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  • 24. 

    Which of the following systems of production is used by GMI?

    • Job

    • Craft

    • Rationalized

    • Customized

    Correct Answer
    A. Rationalized
    Explanation
    GMI uses the rationalized system of production. This system focuses on efficiency and standardization, using specialized machinery and standardized processes to produce goods in large quantities. It aims to minimize costs and maximize output by eliminating unnecessary steps and reducing variability in the production process. This approach allows GMI to achieve economies of scale and meet high demand efficiently.

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  • 25. 

    Transactions involving the export of Happyland's textile and computer products are included in its ________

    • Capital

    • Merchandise

    • Services

    • Income payments

    Correct Answer
    A. Merchandise
    Explanation
    Transactions involving the export of Happyland's textile and computer products are included in its merchandise. This is because merchandise refers to goods that are produced and traded, such as products that are bought and sold in commerce. In this case, Happyland's textile and computer products are being exported, indicating that they are being traded internationally, making merchandise the appropriate category to include these transactions.

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  • 26. 

    Which step of the market-screening process involves determining the income elasticity of the Zulu doll?

    • Selection of the market

    • Assessment of the national business environment

    • Measurement of market potential

    • Identification of the basic appeal for markets

    Correct Answer
    A. Measurement of market potential
    Explanation
    Measurement of market potential involves determining the income elasticity of the Zulu doll. Income elasticity measures the responsiveness of demand for a product to changes in income. By assessing the income elasticity of the Zulu doll, a company can determine how sensitive the demand for the doll is to changes in income levels. This information is crucial in understanding the market potential for the product and making informed decisions about entering or expanding into a particular market.

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  • 27. 

    Freeland's protection of its national identity is an example of which of the following?

    • Political motive

    • Economic motive

    • Cultural motive

    • Systematic motive

    Correct Answer
    A. Political motive
    Explanation
    Freeland's protection of its national identity can be seen as a political motive because it involves the government's actions and policies aimed at preserving and promoting the distinct cultural, social, and political characteristics of the country. This can include measures such as implementing laws to protect national languages, promoting national symbols and traditions, and regulating immigration to maintain a certain demographic composition. The focus on national identity is driven by political considerations, such as maintaining social cohesion, preserving sovereignty, and fostering a sense of unity and pride among citizens.

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  • 28. 

    GMI's subsidiary for component b in Thailand is best described as a(n) _______

    • Greenfield investment

    • Portfolio investment

    • Acquisition

    • Merger

    Correct Answer
    A. Greenfield investment
    Explanation
    A greenfield investment refers to the establishment of a new subsidiary or business from scratch in a foreign country. In this case, GMI's subsidiary for component b in Thailand is described as a greenfield investment, suggesting that GMI has set up a new business entity in Thailand specifically for producing component b.

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  • 29. 

    The first step in the screening process for potential markets and sites is to        

    • Select favorable market or site

    • Measure the market or site potential

    • Identify the basic appeal of a market

    • Assess the national business environment

    Correct Answer
    A. Assess the national business environment
    Explanation
    The first step in the screening process for potential markets and sites is to assess the national business environment. This step involves evaluating the overall conditions and factors that could impact the success of a business in a particular country or region. By assessing the national business environment, companies can gain insights into factors such as economic stability, political climate, legal and regulatory framework, infrastructure, and cultural considerations. This information is crucial in determining whether a market or site is favorable and aligns with the company's goals and objectives.

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  • 30. 

    Which of the following statements is true about country image and its effects on global companies?

    • Products made in emerging countries are evaluated more positively than products made in developed countries

    • If a country's image is positive in one product class, it tends to be positive in all other product classes as well

    • It embodies all important facets of a nation's business environment.

    • An image, once formed, seldom changes over time

    Correct Answer
    A. It embodies all important facets of a nation's business environment.
  • 31. 

    Which of the following variables involved in market-potential analyses allows managers to rank countries from the largest to the smallest, regardless of a particular product?

    • Market growth rate

    • Market intensity

    • Market size

    • Market consumption capacity

    Correct Answer
    A. Market size
    Explanation
    Market size is the correct answer because it allows managers to rank countries based on their overall market potential, regardless of the specific product being considered. Market size refers to the total size of the market in terms of the number of potential customers or the total value of sales. By comparing market sizes, managers can determine which countries have the largest markets and prioritize their resources accordingly. This variable is independent of any specific product and provides a broad perspective on market potential.

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  • 32. 

    If these twenty-six nations continue to eliminate all barriers to trade among themselves and set a common trade policy against nonmembers, they would create a ________.

    • Free trade area

    • Preferential trading area

    • Customs union

    • Political union

    Correct Answer
    A. Customs union
    Explanation
    A customs union is a type of trading bloc in which member countries eliminate barriers to trade among themselves and adopt a common trade policy against nonmembers. This means that member countries would have a common external tariff on goods imported from nonmember countries. In this scenario, the twenty-six nations would create a customs union if they continue to eliminate trade barriers among themselves and establish a common trade policy against nonmembers.

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  • 33. 

    Which of the following steps of the market screening process involves examining the cost of transporting goods?

    • Identification of basic appeal of a market

    • Assessment of the national business environment

    • Measurement of market or site potential

    • Selection of the market or site

    Correct Answer
    A. Assessment of the national business environment
    Explanation
    The correct answer is "assessment of the national business environment". This step involves examining various factors that can impact the cost of transporting goods, such as infrastructure, logistics, and transportation networks. By assessing the national business environment, a company can determine the feasibility and cost-effectiveness of entering a particular market based on transportation costs.

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  • 34. 

    Eurobonds are popular because ________

    • They are less risky than traditional bonds

    • They are always denominated in euros

    • Governments of nations in which they are sold do not regulate them

    • European companies are considered very stable

    Correct Answer
    A. Governments of nations in which they are sold do not regulate them
    Explanation
    Eurobonds are popular because governments of nations in which they are sold do not regulate them. This means that there are no restrictions or limitations imposed by the government on these bonds, making them more attractive to investors. Additionally, this lack of regulation may also imply that the bonds have more flexibility in terms of terms and conditions, which can be beneficial for both issuers and investors.

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  • 35. 

    Freeland is a semi-closed economy whose government believes in protecting national identity and becoming a self-sustaining country. The government's priority is to protect local jobs and provide opportunities to Freeland's emerging industries to flourish without the threat of external competition Which of the following motives is least likely attributed to Freeland's restriction on free trade?

    • Political motives

    • Economic motives

    • Social motives

    • Cultural motives

    Correct Answer
    A. Social motives
    Explanation
    Freeland's restriction on free trade is least likely attributed to social motives. The government's priority is to protect local jobs and promote the growth of emerging industries, which align more with economic motives. Additionally, the government aims to protect national identity and become self-sustaining, suggesting cultural motives. However, there is no mention of social motives in the given information, making it the least likely attribution.

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  • 36. 

    Locating production facilities within regional markets is popular because             

    • Regional markets offer greater range of resources needed for production

    • It provides duty free access to every consumer in a trade bloe 

    • The marketing strategies applied at the regional market level will also be applicable at the global level

    • It simplifies political and economic activites

    Correct Answer
    A. Regional markets offer greater range of resources needed for production
    Explanation
    Locating production facilities within regional markets is popular because regional markets offer a greater range of resources needed for production. This means that companies can easily access raw materials, skilled labor, and other necessary inputs for their production processes. By being close to these resources, companies can reduce transportation costs and ensure a steady supply of inputs. Additionally, being located within regional markets allows companies to take advantage of local infrastructure and support systems, further enhancing their production capabilities. Overall, this strategy helps companies optimize their production processes and improve efficiency.

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  • 37. 

    Which of the following will most likely force international companies to cancel proposed investments?

    • Low rates of inflation

    • Increasing budget deficits

    • Rising productivity levels

    • An appreciating currency

    Correct Answer
    A. Low rates of inflation
    Explanation
    Low rates of inflation can force international companies to cancel proposed investments because it indicates a lack of demand and economic growth. When inflation is low, it suggests that consumer spending is weak and there is less potential for companies to make profits from their investments. Additionally, low inflation may also indicate a stagnant economy, which further discourages companies from investing. Therefore, international companies are more likely to cancel proposed investments in countries with low rates of inflation.

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Quiz Review Timeline (Updated): Mar 21, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 13, 2016
    Quiz Created by
    Rafiq Taylor

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