Question 1

Which of the following best describes the concept of 'comparative advantage' in international trade?

Accepted Answer

A country should export goods and services it produces most efficiently and import those it produces less efficiently, even if it can produce everything more efficiently than its trading partners.

Question 2

Suppose Canada exports $$500 billion worth of goods and imports 450 $$billion worth of goods in a year. What is Canada's balance of payments for that year?

Accepted Answer

$$50$$ billion

Question 3

Which of the following is a disadvantage of licensing as a strategy for reaching global markets?

Accepted Answer

It can result in loss of control over brand or technology.

Question 4

A country that imposes a tax on imported goods to protect its domestic industries is using which of the following?

Accepted Answer

Tariff

Question 5

Which of the following is an example of a non-tariff barrier?

Accepted Answer

A requirement that imported electronics meet specific safety standards

Question 6

If a country sells goods in a foreign market at prices lower than those in its home market, this practice is known as:

Accepted Answer

Dumping

Question 7

Which of the following is NOT a benefit of free trade?

Accepted Answer

Job losses in certain sectors

Question 8

Which international organization acts as a 'referee' in global trade disputes and aims to reduce trade barriers?

Accepted Answer

World Trade Organization (WTO)

Question 9

A Canadian company wants to expand globally but has limited capital and wants to minimize risk. Which strategy is most appropriate?

Accepted Answer

Licensing

Question 10

Which of the following best describes the purpose of an import quota?

Accepted Answer

To restrict the number of certain products that can be imported

Question 11

Which of the following is a key feature of the European Union (EU)?

Accepted Answer

There are no tariff or non-tariff barriers among member countries

Question 12

Which of the following is a potential risk of Foreign Direct Investment (FDI)?

Accepted Answer

Exposure to political, legal, and economic risks

Question 13

A Canadian company forms a partnership with a Japanese firm to share expertise and enter the Japanese market. This is an example of:

Accepted Answer

Joint Venture

Question 14

Which of the following is a real-world example of a producers’ cartel?

Accepted Answer

Organization of Petroleum Exporting Countries (OPEC)

Question 15

Which of the following best describes 'countertrading'?

Accepted Answer

Multiple countries trade goods or services with each other instead of using money

Question 16

Which of the following is a likely outcome of trade protectionism?

Accepted Answer

Protection of domestic jobs

Question 17

If the Canadian dollar appreciates relative to the US dollar, what is the most likely effect on Canadian exports to the US?

Accepted Answer

Canadian exports to the US will become more expensive for US buyers, likely reducing demand.

Question 18

Which of the following is a con of franchising as a global market entry strategy?

Accepted Answer

Harder to maintain quality and brand consistency

Question 19

Which of the following is a reason why countries negotiate access to critical minerals through trade deals and alliances?

Accepted Answer

Critical minerals are essential for economic security and the transition to clean energy.

Question 20

Which of the following best describes the impact of globalization on Canadian businesses?

Accepted Answer

It creates new jobs and increases competition in both manufacturing and service industries.

Competing in Global Markets: International Trade and Canadian Business

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