Davis D270 Final Questions with Complete Verified Solutions 2024/2025, Exams of Business Administration

Download Davis D270 Final Questions with Complete Verified Solutions 2024/2025 and more Exams Business Administration in PDF only on Docsity! Davis D270 Final Questions with Complete Verified Solutions 2024/2025 1) The recent global economic crisis has led to which of the following? A) governments seeking to impose more constraints on capitalism B) governments seeking to eliminate constraints on capitalism C) governments seeking to increase the interdependence of developing economies D) governments seeking to eliminate the interdependence of developing economies A) governments seeking to impose more constraints on capitalism 2) Which of the following is most likely a true statement about the global economy since the 1980s? A) Socialist governments are intervening more in global exchanges. B) Wealthy countries are exercising total control over emerging markets. C) Developing countries are losing growing shares of their foreign-exchange reserves. D) Emerging economies are adopting the principles and practices of free markets. D) Emerging economies are adopting the principles and practices of free markets. 3) Kyle, an international manager for Apex Industries, has been given the task of analyzing the economies of three different emerging countries for the firm's potential expansion. Which of the following questions is LEAST relevant to Kyle's assignment? A) How much freedom will Apex have to run its foreign operations? B) What are the current economic policies related to development? C) What is the likelihood that Apex can fill manufacturing positions with locals? D) What factors in the country drive or hinder economic change? C) What is the likelihood that Apex can fill manufacturing positions with locals? 4) Managers at Morrison Manufacturing are considering expanding the firm's production overseas and want to ensure that the firm is located in a country with a high degree of economic freedom. Presently, which of the following locations would most likely offer Morrison the highest economic freedom? A) Mexico B) Hong Kong C) Venezuela D) North Korea B) Hong Kong 5) Since the late 1980s, the growing emergence of freer markets has been powered by the realization that ________. A) economic growth is directly related to economic freedom B) economic growth has a limited effect on the standard of living C) adoption of free market principles contributes to social injustices D) centrally planned economies are best designed to deliver progress A) economic growth is directly related to economic freedom 6) The Economic Freedom Index indicates that economic freedom is positively correlated with all of the following EXCEPT ________. A) life expectancy B) literacy C) environmental sustainability D) diversity D) diversity 7) The recent global credit crisis has interrupted the trend of national economies ________. A) rapidly adopting the command market model B) steadily adopting the free market model C) moving from the mixed to the command model D) turning away from the mixed model B) steadily adopting the free market model 8) History suggests that if the economic crisis worsens, we are likely to see more people question the ________. A) fall of communism B) legitimacy of capitalism C) practicality of mixed market economies D) correlation between economic freedom and prosperity B) legitimacy of capitalism 9) According to research, which of the following countries is the strongest supporter of free markets? 19) In a ________ economy, certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning. A) state-directed B) market C) command D) mixed D) mixed 20) Some countries opt for a mixed economic system in the belief that although an economic system should aspire to achieve the efficiencies created by free markets, it must also support policies to ________. A) destabilize poverty rates B) achieve low unemployment C) restrict economic growth D) inequitably distribute wealth B) achieve low unemployment 21) In the Economic Freedom Index, ________ exhibit high economic freedom whereas ________ exhibit little to no economic freedom. A) mixed economies; market economies B) command economies; market economies C) market economies; command economies D) centrally planned economies; command economies C) market economies; command economies 22) Which of the following countries is the best example of a mixed economic model? A) United States B) France C) United Kingdom D) Australia B) France 23) Country X is in the process of transforming from a command economy to a market economy. This process most likely involves ________. A) standardized procedures implemented by the state B) high economic growth rates for the long-term C) privatization of many factors of production D) violent political and legal upheaval C) privatization of many factors of production 24) In a country that practices state capitalism, all of the following are most likely to be handled by the state EXCEPT ________. A) leveraging control of the financial system B) developing national corporations C) supporting the local activities of foreign competitors D) systematically managing trade relations C) supporting the local activities of foreign competitors 25) Gross national income (GNI), the broadest measure of economic activity for a country, is defined as the ________. A) total of all consumption and investment that takes place in a national economy B) income generated in one country, regardless of who owns the productive assets C) total of all economic activity in one country less services, such as government administration, health services, and education D) income generated by both total domestic production and the international production activities of national companies D) income generated by both total domestic production and the international production activities of national companies 26) In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ________. A) be added to the GNI of the United States as well as to the GNI and GDP of Mexico B) not be added to the GNI of the United States but would be added to the GNI of Mexico C) only affect the computation of GDP and have no bearing on GNI D) be added to the GNI of the United States but not the GNI of Mexico D) be added to the GNI of the United States but not the GNI of Mexico 27) The measure of the value of production that occurs within a country's borders without regard to whether the production is done by domestic or foreign factors of production is its________. A) net national product (NNP) B) gross national product (GNP) C) gross domestic product (GDP) D) gross national income (GNI) C) gross domestic product (GDP) 28) To determine whether the standard of living within a country is rising or falling, economists would most likely use which of the following measures? A) per capita GNI B) GNI growth rate C) purchasing power parity D) degree of human development B) GNI growth rate 29) Eileen, a manager at an international restaurant chain, wants to know if it will be most cost effective to buy 1,000 pounds of sugar in Country X or in Country Y using U.S. dollars. Which of the following is Eileen most likely trying to determine? A) purchasing power parity B) economic growth rate C) gross domestic income D) gross national product A) purchasing power parity 30) The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country. A) Human Development Index B) Emerging Economic Stability C) Genuine Progress Indicator D) Net National Product A) Human Development Index 31) The Human Development Index measures the average achievements in a country on three basic dimensions of human development, including ________. A) promotion of cultural values B) quantity of free time C) extent of knowledge D) sustainability C) extent of knowledge B) The government of Country X borrowed money from other governments. C) The government of Country X spent more than it collected in revenues. D) The government of Country X received short-term credits from selling bonds. B) The government of Country X borrowed money from other governments. 42) Uneven income distribution ________. A) exists in almost every country B) is largely a problem for poorer nations C) primarily affects people in urban settings D) is limited to a small share of the world population A) exists in almost every country 43) Which of the following is most likely a FALSE statement about income inequality? A) The richest 1% of the world's population claims as much income as the bottom 57%. B) GNI is the most effective tool for estimating the relative wealth of a nation's citizens. C) Among industrialized nations, the U.S. has the largest inequality gap between rich and poor. D) Income inequality between metropolitan and rural areas threatens a country's social stability. B) GNI is the most effective tool for estimating the relative wealth of a nation's citizens. 44) The World Bank reports that approximately ________ percent of the world's population is poor. A) 50 B) 75 C) 80 D) 95 C) 80 45) The Gini coefficient estimates a country's ________. A) gross national product B) economic development C) political and legal risk D) income inequality D) income inequality 46) The ________ view calls for companies to develop low-cost, high-powered, resource- minimizing innovations that can be marketed to the billions of people living on less than a few dollars a day. A) Base of the Pyramid B) Hierarchy of Needs C) Happy Planet Index D) Gini coefficient A) Base of the Pyramid 47) Which of the following is a statement that summarizes all economic transactions between a country and the rest of the world during a given period of time? A) trade deficit B) Gini coefficient C) balance of payments D) purchasing power parity C) balance of payments 48) The two main categories in the balance of payments are the ________. A) merchandise exchange account and the services account B) external debt and the unilateral transfers account C) merchandise trade account and the capital account D) current account and the capital account D) current account and the capital account 49) In a country's balance of payments, the ________ tracks all trade activity in merchandise. A) capital account B) current account C) payment account D) deficit account B) current account 50) An economic system is the set of structures and processes that ________ in a country. A) guides the allocation of resources and shapes the conduct of business activities B) directs the movement of specific products to specific consumers C) sets the standards of competitive success for companies in the economy D) stipulates the roles and responsibilities of consumers A) guides the allocation of resources and shapes the conduct of business activities 51) Pender Pharmaceuticals is considering expanding overseas and is focusing primarily on the BRICs. Which of the following countries is one that Pender is considering? A) Indonesia B) Chile C) Russia D) Bangladesh C) Russia 52) Taylor Enterprises wants to expand its operations into Asia. Managers are focusing on countries with high degrees of economic freedom most likely because the firm is interested in a country with ________. A) minimal government intervention B) standardized minimum wages C) laws favoring sustainability D) state-run corporations A) minimal government intervention 53) Tatum Manufacturing recently opened a new facility in Hong Kong. The firm can most likely expect the Hong Kong government to ________. A) monitor market prices B) control natural resources C) ensure fair competition D) provide innovation incentives C) ensure fair competition 54) Presently, which of the following countries is best characterized as a pure example of a command economy? A) Russia B) Libya C) China D) Vietnam B) Libya 55) A firm with operations in Denmark can most likely expect all of the following EXCEPT ________. A) high taxes B) significant regulation C) tough job-protection laws D) minimal monetary policies C) shareholders D) customers B) competitors 5) Which stakeholder group primarily wants additional sales and increased productivity? A) customers B) shareholders C) society at large D) government B) shareholders 6) Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes? A) shareholders B) society C) employees D) customers B) society 7) Which of the following statements is most likely true regarding relationships between MNEs and stakeholders? A) An MNE typically serves all stakeholder groups equally at any given time. B) No individual stakeholder group is powerful enough to cause the demise of an MNE. C) All stakeholders of an MNE have the same short-term and long-term goals and interests. D) The inability to adequately meet the long-term needs of all stakeholders increases the probability of an MNE failing. D) The inability to adequately meet the long-term needs of all stakeholders increases the probability of an MNE failing. 8) Monique has recently been hired as an accounts supervisor at Ballston Enterprises. She wants to understand Ballston's values and its expectations for employee behavior. Which of the following would most likely provide Monique with this information? A) mission statement B) code of conduct C) vision statement D) employee contract B) code of conduct 9) All of the following are levels of moral development EXCEPT the ________. A) preconventional level B) autonomous level C) internalized level D) conventional level C) internalized level 10) Which level of moral development involves an individual learning role-conformity from peers, parents, and laws? A) conventional B) principled C) autonomous D) preconventional A) conventional 11) Which of the following statements is most likely true about the post-conventional level of moral development? A) Individuals learn what is moral but not why such behavior is moral. B) Individuals behave morally because they fear negative repercussions. C) Individuals learn how to conform to society's values through observation. D) Individuals behave morally because they believe such actions are right. D) Individuals behave morally because they believe such actions are right. 12) According to the teleological approach, individuals base moral decisions on ________. A) personal and social responsibilities B) consequences of an action C) cultural value systems D) opinions of peers B) consequences of an action 13) Which of the following most likely complicates ethical behavior for firms that expand overseas? A) local laws and values B) expatriate management C) unstable financial settings D) international codes of conduct A) local laws and values 14) Which of the following is a primary business objective for pursuing ethical behavior? A) avoiding industrial sanctions B) developing competitive advantages C) developing creative advertisements D) discouraging false commitments to the firm B) developing competitive advantages 15) Which of the following is a primary business objective for pursuing ethical behavior? A) replacing home-country technology with host-country technology B) minimizing federal investigations into corporate finances C) avoiding being perceived as a socially irresponsible firm D) imposing home-country behavior on the host country C) avoiding being perceived as a socially irresponsible firm 16) Encouraging ethical behavior for the purpose of developing competitive advantages will most likely result in all of the following for a firm EXCEPT ________. A) strategic accomplishment B) consumer commitment C) industry resolutions D) financial success C) industry resolutions 17) Bantam Enterprises, a multi-national enterprise, makes significant efforts to avoid being perceived as socially irresponsible. What is the most likely reason for this? A) Social irresponsibility can lead to labor strikes by international unions. B) Socially irresponsible companies usually have fewer exports and more imports. C) Cultural barriers increase for companies that are socially irresponsible, which hinders expansion into additional countries. D) Social irresponsibility can lead to negative publicity from nongovernmental organizations, which could hurt a company's reputation. D) Social irresponsibility can lead to negative publicity from nongovernmental organizations, which could hurt a company's reputation. 18) Ethical dilemmas tend to be ________ for MNE managers than for domestic managers. A) more complicated B) contradicts demands for increased globalization 28) The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________. A) utilitarianism B) extraterritoriality C) absolute advantage D) relative advantage B) extraterritoriality 29) According to Transparency International, companies from which of the following countries are more likely to pay bribes? A) China B) Japan C) Singapore D) Belgium A) China 30) What is the primary concern regarding anti-corruption measures in the EU? A) resistance to an official anti-fraud commission B) inability to adopt a corruption definition C) lack of uniform laws across nations D) failure to conduct internal auditing C) lack of uniform laws across nations 31) Which of the following is NOT affected by the Foreign Corrupt Practices Act? A) companies registered in the U.S. B) foreign firms operating in U.S. territory C) foreign firms quoted on a U.S. stock exchange D) foreign companies managed by U.S. expatriates D) foreign companies managed by U.S. expatriates 32) Which of the following statements describes an inconsistency of the FCPA? A) Facilitation payments are classified as bribery. B) Facilitation payments are excluded from the FCPA's definition of bribery. C) Payments to officials who are not directly responsible for carrying out the law are legal. D) Payments to foreign officials who carry out the law are considered illegal by provisions of the FCPA. B) Facilitation payments are excluded from the FCPA's definition of bribery. 33) A 1998 U.S. law that outlaws bribery payments by U.S. firms to foreign government officials is known as the ________. A) Anti-Bribery Act of 2004 B) Foreign Corrupt Practices Act C) Zero Tolerance Initiative D) Sarbanes-Oxley Act B) Foreign Corrupt Practices Act 34) Which of the following is permitted by the Foreign Corrupt Practices Act? A) a bribe paid by foreign firms operating in U.S. territories B) a bribe paid by U.S. firms operating in a foreign country that permits bribes to be paid C) a payment to a foreign government official to influence a customs official D) a payment to a customs official to clear legitimate merchandise D) a payment to a customs official to clear legitimate merchandise 35) The OECD Convention against bribery is an example of a(n) ________. A) bilateral agreement developed for the EU B) agreement that targets the demand side of bribery C) agreement that targets the supply side of bribery D) UN Convention dominated by developing countries C) agreement that targets the supply side of bribery 36) Which of the following is a voluntary effort by 150 multinational construction and natural- resources companies to end bribery? A) Foreign Corrupt Practices Act B) Partnering Against Corruption Initiative C) OLAF (European Commission Anti-Fraud Office) D) Sarbanes-Oxley Act B) Partnering Against Corruption Initiative 37) Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as ________. A) competitive advantage B) the Kyoto Protocol C) sustainability D) externality C) sustainability 38) The 1997 Kyoto Protocol is best described as an agreement that requires ________. A) all members of the United Nations to reduce their greenhouse gas emissions by 5.2 percent B) the United States and Japan to control greenhouse gas emissions by 8% below 1995 levels C) the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990 levels D) the signatory countries to reduce greenhouse gas emissions by 80% by 2050 C) the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990 levels 39) Firms that operate in countries that have adopted the Kyoto Protocol are required to either reduce emissions or ________. A) purchase carbon credits from other firms B) file petitions to appeal the requirement C) cease manufacturing operations D) pay fines to the U.N. A) purchase carbon credits from other firms 40) How has the Kyoto Protocol affected U.S. companies operating in Europe? A) U.S. companies are changing the way they do business in order to comply with new emissions standards in Europe. B) The Kyoto Protocol has not affected U.S. companies with subsidiaries in Europe because the U.S. has not signed the Kyoto Protocol. C) Before U.S. companies can open any more European subsidiaries, the U.S. government must sign the Kyoto Protocol. D) Because the United States is not a party to the Kyoto Protocol, U.S. companies may not operate in European countries that have signed the Kyoto Protocol. A) U.S. companies are changing the way they do business in order to comply with new emissions standards in Europe. 41) Medco Pharmaceuticals charges a market price for heart medication to distributors in Italy and a discounted price for the same medication to distributors in Bangladesh. Medco is most likely using ________. A) discounted pricing B) skimmed pricing C) penetrated pricing D) tiered pricing D) tiered pricing 42) Some countries reverse engineer pharmaceutical products ________. A) because they know that generic products are inherently better than branded products B) to lower the cost of certain drugs to the domestic market C) as a way to charge higher prices in domestic markets D) to comply with international patent laws B) to lower the cost of certain drugs to the domestic market 43) The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) ________. A) allows rich countries to produce generic versions of patented drugs without having to pay royalties to the patent holder B) permits developing countries to import generic products from other countries if they don't have C) relying on nonprofit NGOs to develop guidelines D) adhering to industry standards and norms A) ensuring that employees understand the code by requiring confirmation in writing 55) What is the primary problem associated with Anglo American PLC's ART program? (not on test) A) unknown side effects to drugs and treatment B) rising costs of medications and procedures C) poor treatment adherence by employees D) lack of sufficient insurance coverage C) poor treatment adherence by employees 56) What is the primary reason that Anglo American PLC developed its ART program? A) comply with government standards B) maintain a healthy workforce C) abide by union demands D) reduce employee benefits B) maintain a healthy workforce 57) Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following would be the best approach for Quantum? A) improving conditions at the subcontract facilities B) developing an external ethics code for foreign partners and letting them worry about compliance. C) requiring local governments to alter their labor policies D) leaving the market and focusing on domestic production A) improving conditions at the subcontract facilities 58) Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following guidelines enforced by Quantum would LEAST likely be supported by the International Labor Organization? A) establishing bridge schools B) monitoring workplace safety C) allowing children ages 10-15 to work a maximum of 4 hours per day D) prohibiting abusive labor conditions C) allowing children ages 10-15 to work a maximum of 4 hours per day 1) Trade protectionism will most likely affect which aspect of a company's operations? A) selecting employees B) investing short-term capital C) acquiring foreign supplies D) relocating personnel overseas C 2) The term protectionism when applied to international trade refers to ________. A) governmental restrictions and competitive support actions to affect trade flows B) payments to dock workers to prevent pilferage of imported shipments C) border checks to prevent entry of illegal aliens D) methods used to prevent intellectual property theft A 3) Why should managers have an understanding of trade protectionism? A) Trade protectionism targets factor endowments, thus affecting the best country to locate production. B) Trade protectionism affects a company's ability to sell abroad and ability to compete at home. C) Trade protectionism affects the number of people permitted to practice a specific profession. D) Trade protectionism prevents companies' enactment of merger and acquisition agreements. B 4) Managers should understand the effect of trade protectionism because ________. A) trade protectionism may limit the number of people permitted to practice a specific profession B) trade protectionism requires the payment of high insurance rates to transport goods internationally C) trade protectionism may prevent companies' enactment of merger and acquisition agreements D) trade protectionism may make it difficult for a company to buy what it needs from foreign suppliers D 5) The government of Country X imposes import restrictions on steel to help the domestic steel industry in depressed areas. What is the most likely result of such restrictions? A) damaging other industries in Country X B) devaluing the currency of Country X C) lowering steel prices in Country X D) triggering boycotts in Country X A 6) Assume a government places restrictions on a specific product from a specific foreign country. What would be the government's most likely concern about the foreign country's response? A) the foreign producers raising the prices of their exports B) the foreign country restricting its own imports C) the foreign country restricting its exports in that industry D) the foreign producers seeking other markets B 7) Assume a government is considering import restrictions on sugar because sugar imports are hurting the domestic industry. Which of the following groups is LEAST likely to speak out on the subject? A) politicians in areas that grow sugar B) employees of sugar companies C) sugar company owners D) sugar consumers D 8) What is the most likely reason that consumers rarely protest import restrictions that raise the prices they pay for a specific product? A) They reason that if the import restrictions are removed, the foreign producers will raise their prices to those of the domestic producers anyway. B) Many countries prohibit consumers to band together to influence political actions. C) Typically, although the added costs to consumers for a given product are high in aggregate, they are fairly trivial for most individual consumers. D) They reason that if they do something to hurt domestic employment for one product, the displaced workers will then do something that will hurt their own employment. C 9) Unemployed workers are most apt to form a pressure group to support ________. A) export restrictions B) import restrictions C) price limitations D) import subsidies B 10) Successful trade retaliation is most likely achieved ________. A) on agricultural products B) on manufactured products C) by a large trading country D) by a small trading country C 11) Imports can stimulate exports by ________. A) redistributing the work force 21) Which term refers to restricting imports in order to boost domestic production and consumption of goods that would otherwise be imported? A) import substitution B) terms-of-trade C) most-favored nation D) in-sourcing A 22) Export-led development refers to ________. A) a country's efforts to promote its exports in order to reduce its trade deficits B) a policy to promote domestic production of goods that would otherwise be imported C) a program to promote industries with export potential D) decreases in infrastructure development due to the loss of revenue from export tariffs C 23) Which of the following best explains why the experience of countries such as Taiwan and South Korea are used to support export-led development policies? A) their low inflation B) their increased FDI C) their industry diversity D) their rapid economic growth D 24) The relationship between import substitution policies and export-led development policies is best characterized by which of the following? A) Import-substitution policies are more likely to lead to production of mature products, whereas export-led development policies result in production of growth products. B) The two are hard to distinguish because production under import substitution may eventually be exported. C) Production under import substitution policies, as opposed to export-led development policies, is more likely to be located in urban areas. D) Production under import substitution policies, as opposed to export-led development policies, is likely to be more labor-intensive. B 25) Advocates of the comparable access argument for trade protection primarily assert that domestic industries ________. A) will deteriorate in countries that have lower import restrictions than their trading partners B) should be required to implement export-led development policies on foreign competitors C) are entitled to the same access to foreign markets as foreign industries have to their markets D) are forced to lower prices for domestic consumers because of foreign import restrictions C 26) It is sometimes contended that by imposing import controls a country might be able to increase its exports. This contention is premised on ________. A) the country's simultaneous currency depreciation, which decreases the price of its exports B) using the import taxes to institute efficiency measures in potential export industries C) raising domestic prices in one industry so that the excess domestic profits in that industry can compensate for the cost of dumping products from another industry into foreign markets D) getting other countries to maintain or relax their current import restrictions instead of escalating restrictions in a trade war D 27) Country X wants to eliminate its balance of trade deficit while simultaneously keeping prices low for imported essentials. Which of the following methods would most likely achieve these dual objectives? A) devaluing its currency B) enacting selective import restrictions C) using tight monetary policies to deflate price levels D) spurring productivity increases through general tax breaks for industry B 28) All of the following are reasons a country might institute import restrictions to improve its balance of trade position with other countries EXCEPT to ________. A) maintain essential industries B) reduce imports and encourage exports C) get comparable access for its companies D) bargain away restrictions by other countries A 29) Country X is withholding goods from international markets in an attempt to raise prices abroad. Such actions will be most effective for Country X if the nation ________. A) supports the development of substitutions B) provides domestic industries with tax breaks C) receives low-interest loans from foreign banks D) holds a monopoly on the product or resource D 30) Countries most likely establish export restrictions to ________. A) retaliate against foreign import controls B) raise prices in foreign markets C) encourage substitute products D) reduce domestic production B 31) Export restrictions have a tendency to ________. A) favor domestic consumers B) protect employment in the export-restricted industries C) lower prices in foreign markets D) encourage the development of substitutes in the restricting country A 32) All of the following are potential problems of using export controls EXCEPT which one? A) There is an incentive for other countries to develop production of their own. B) Domestic producers may have less incentive to increase output. C) Prices go up in the country imposing the controls. D) There is more incentive for smuggling. C 33) Exporting below cost or below the home country price is called ________. A) countertrade B) an export-led development policy C) a strategic trade policy D) dumping D 34) There are several reasons for a company to sell products abroad at either below cost or below the price in the home country. Which of the following is one of these reasons? A) encouraging foreign consumers to try new products B) improving the exporting country's terms of trade C) gaining imports that are sold below cost D) following import substitution objectives A 35) Countries sometimes fear that foreign producers are pricing their exports artificially low. This fear is most likely based on the assumption that ________. A) foreign companies will lack the earnings to repay their foreign debt B) insufficient earnings will be available to improve product technology C) foreign producers will charge exorbitant prices after putting competitors out of business D) developing countries will be unable to maintain critical industries needed in times of war C 36) According to the optimum tariff theory, a foreign producer will most likely ________. A) ship highly taxed goods internationally on a per-unit basis B) lower its export prices if the importing country imposes an import tax on its products