Question 1: One effect of the North American Free Trade Agreement (NAFTA) is:

• an increase in trade among the NAFTA member nations
• an increase in the number of low-wage jobs in the United States
• a decrease in trade among NAFTA member nations
• an increase in trade restrictions among the member nations

Question 2: A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese. This is an example of ________.

• an exchange control
• an import quota
• a protective tariff
• dumping

Question 3: A trade deficit occurs when ________.

• imports are sold at low profits
• foreign-aid payments exceed exports
• imports exceed exports
• there is a net flow of money into a country

Question 4: Los Angeles-based PMI Telecom purchases cell phones manufactured in Asia and sells them in the United States. PMI is engaging in the international business activity known as ________.

• exporting
• importing
• countertrade
• dumping

Question 5: Dumping _________ domestic consumers and _________ domestic producers.

• harms, benefits
• harms, harms
• benefits, harms
• benefits, benefits

Question 6: A balance of payments deficit occurs when ________.

• the net inflow of money from abroad exceeds the net outflows of money to other countries
• imports exceed exports
• the net outflow of money from a country exceeds the net inflow of money from abroad
• exports exceed imports

Question 7: An absolute advantage occurs when a country can maintain ________.

• a monopoly by outlawing foreign imports
• a monopoly by levying high taxes on imports
• a monopoly by being the lowest-cost producer of a good or service
• its advantage by producing a good or service more efficiently

Question 8: During the past decade, which of the following countries has experienced the greatest annual rate of GDP growth?

• United States
• China
• Canada
• Japan

Question 9: A country with a balance of payments surplus means ________.

• monetary inflow exceeds monetary outflow
• monetary outflow exceeds monetary inflow
• imports exceed exports
• exports exceed imports

Question 10: The ________ industry represents the greatest percentage of minority-owned businesses.

• Finance
• Service
• Retail
• transportation

Question 11: If business owners in a partnership wish to limit liability, they have the option to ________.

• pledge funds
• divide into sole proprietorships
• set up a limited partnership
• withhold funds

Question 12: Many businesses fail during the early years because of ________.

• niche marketers
• inadequate financing
• unmotivated owners
• poor planning

Question 13: The majority of all U.S. firms employ:

• more than 5,000 employees
• 1,000 to 3,000 employees
• 3,000 to 5,000 employees
• 500 or fewer employees

Question 14: If you are considering starting your own business, a key priority for you should be to:

• get a loan from your local bank
• incorporate your business.
• learn the basics of business.
• apply for a Small Business Administration loan.

Question 15: McDonalds offers a contractual business arrangement in various countries around the world. McDonalds is an example of a(n) international ____________.

• franchise
• acquisition
• Merger
• not-for-profit corporation

Question 16: If you are a highly independent individual used to having your own way, the best business format for you is a ________.

• partnership
• corporation
• sole proprietorship
• limited liability corporation

Question 17: ________ newly-launched businesses fail within two years after commencing operations.

• Less than one in ten
• About one of every three
• About half of all
• Almost all

Question 18: Louis works as an artist for a major textile company and created an innovation for producing designs. The company will implement Louis's idea as part of its ________ strategy.

• skunkworks
• angel investment
• seed capital
• entrepreneurship

Question 19: Which of the following is an example of a country with a factor-driven economy with an average of over 10% of its adults starting or managing a new business?

• Thailand
• United States
• Bangladesh
• Hong Kong

Question 20: After starting a web design company while still in college, Rodrigo sold the company after graduation. He then opened a computer repair shop; and most recently, he has started a marketing firm that specializes in social media. Rodrigo is an example of a(n):

• serial entrepreneur.
• social entrepreneur.
• lifestyle entrepreneur.
• classic entrepreneur.

Question 21: Franz and Arlene had an idea for a different type of ice cream. They struggled to open their own small business, and later, to expand production and distribution. Their products are distributed nationwide and their sales continue to increase. Franz and Arlene are examples of ________.

• serial entrepreneurs
• classic entrepreneurs
• change agents
• social entrepreneurs

Question 22: Financial success ________.

• rarely results from starting a business
• is part of the appeal of becoming an entrepreneur
• plays little role in motivating people to become entrepreneurs
• is virtually guaranteed if people work hard enough starting their own businesses

Question 23: Lisa is trying to start a new business. A women's business network puts her in touch with an investor who is willing to invest in her company in exchange for an equity stake. This investor is a(n) ________.

• angel investor
• franchiser
• venture capitalist
• entrepreneur

Question 24: What makes entrepreneurs unique is their overwhelming desire to ________.

• become successful
• utilize their creative energy
• manage employees
• make their business grow

Question 25: Information technology can help entrepreneurs in all of the following ways EXCEPT:

• provide improved customer service.
• ensure financial success.
• work quickly and efficiently.
• project a professional image.