Chapter 4 Answer Key

Fill in the Blanks:

1. Selling items produced in the same countries is Domestic Transaction
2. The selling of items produced in other countries is International Transaction
3. By participating in a international transaction your contributing to the Global economy
4. Tariffs also called Custom Duties
5. Social Costs include offshore outsourcing, human rights, or labour abuses.
6. Tariff Barriers are often the subject of international negotiations.
7. The process of developing land, cities, businesses, and communities is Sustainable
Development.
8. The The Five P’s of international business are product, price, proximity, preference, and
promotion.
9. The Landed Cost is the actual cost for the imported purchased item.
10. The WTO was established in 1995 to govern international trade.
11. An excise tax is a tax on the manufacturer, sale, or consumption of the particular product
within the country.
12. If the country earns more from exports than it pays for imports, there is a trade surplus.
13. A balance of trade is the relationship between the countries total imports and total
exports.
14. Trade Deficit is when a country pays more for imports than it earns from exports.
15. Indirect Exporting means the goods moved from the exporter to an intermediary and
then on to the importer.
16. Direct Exporting means the exporter deals directly with the importer and does not use a
intermediary.
17. Countries must come to a Trade Agreement in order to reduce trade barriers.
18. Consumers for goods created in other countries are a sign of global dependency.
19. Canada-U.S. trade agreement stands for FTA.
20. A Bilateral trade agreement involves two parties or two countries.
Matching:
1. Global dependency
2. Social costs
3. Global product
4. Domestic transaction
5. International labour organization
6. Tariffs
7. Excise tax
8. NAFTA
9. Trade Surplus
10. Trading bloc
11. Direct exporting
12. Group of Eight
13. WTO
14. GATT
15. Landed costs
True and False:
1. False
2. False
3. True
4. True
5. True
6. False
7. False
8. True
9. True
10. False
11. True
12. True
13. False
14. True
15. True
16. True
17. True
18. False
19. False
20. False

Multiple Choice
1. A, Trade of goods in one country compared to the trade of goods throughout multiple
countries.
2. C, trading goods with another country.
3. C, social costs
4. A, Preference
5. A, Environmental Degradation
6. A, When a country earns more from exports than it pays for imports.
7. B, To stop money from flowing out the country and loss of jobs.
8. C, A tax put on imported goods.
9. B, When indirect exporting is used.
10. A, Machinery/Industrial goods.
11. C, Other Products.
12. C, All of the above.
13. A, United States
14. B, 1948
15. A, FTA
16. B, Mexico
17. B, World Trade Organization
18. B, Barriers that are standards of the quality of imported goods.
19. B, Under 16
20. A, Global Economy.