Quiz 3: Doing Business in Global Markets
Business
Q 1Q 1
Today, over 90% of the companies doing business globally believe it is important for their employees to have experience working in other countries.
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Q 7Q 7
One reason countries trade with other countries is that even technologically advanced nations cannot produce all the products their people want and need.
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Q 8Q 8
Free trade is the movement of goods and services between nations without political or economic barriers.
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True False
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Q 12Q 12
Comparative advantage theory states that a country should sell to other countries those products that it produces most efficiently and buy from other countries those products it cannot produce as efficiently.
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True False
Q 13Q 13
A country has an absolute advantage if the production of a specific product is more efficient than all other nations.
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True False
Q 14Q 14
Today, there are more countries that have some form of absolute advantage in a product or service, than years ago.
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True False
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Q 17Q 17
Opportunities for college graduates in international business continue to decrease as it gets more expensive to travel abroad.
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Q 18Q 18
An example of a U.S. import would be the purchase of oil by U.S. companies from Saudi Arabia.
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True False
Q 19Q 19
According to the theory of comparative advantage, a country should buy from other countries those goods it produces most efficiently.
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True False
Q 20Q 20
In order to enjoy the highest standard of living possible, comparative advantage theory states that all nations should strive to become self-sufficient.
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Q 21Q 21
Products made in Canada are sold in the U.S. because these two nations agree to eliminate economic and political barriers between nations. They participate in free trade.
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Q 22Q 22
After finishing college, Nathan joined his uncle's company in Miami, FL, a company that buys bauxite, copper, and other minerals from the country of Chile, and brings them into the U.S. Everyday, he brokers trades with mines in Chile. His uncle's company is in the export business.
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True False
Q 23Q 23
In southern California, there are banana plantations. These plantations cannot produce all the bananas consumed by persons in the U.S. The fact that the U.S. grows and sells bananas gives it a comparative advantage in bananas. It is not an absolute advantage and that is why we choose to import bananas from other countries, as well.
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True False
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Q 25Q 25
Many foreign students in U.S. colleges and universities have discovered profitable opportunities by importing goods from their home countries into the United States.
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Q 26Q 26
International trade is not limited to multinational corporations. Small businesses do about 30% of all exporting out of the U.S.
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True False
Q 27Q 27
Just about anything that can be sold in the United States can also be sold to buyers in other countries.
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True False
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Q 29Q 29
If your business has an outstanding product, exporting offers a quick, easy, no-hassle way to improve your profitability.
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Q 31Q 31
A favorable balance of trade occurs when the value of a country's imports exceeds the value of its exports.
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True False
Q 32Q 32
A favorable balance of trade occurs when the value of a country's exports exceeds the value of its exports.
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Q 33Q 33
The balance of payments measures the inflows and outflows of money from tourism, foreign aid, military expenditures and foreign investments as well as flows resulting from exports and imports.
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Q 37Q 37
Even though the U.S. exports a vast amount of goods globally, it exports a much lower percentage of its products than other countries do.
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Q 38Q 38
Dumping is the practice of selling products in foreign markets at lower prices than what domestic firms are charging for the same product.
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True False
Q 39Q 39
In order to prevent dumping, U.S. law stipulates that foreign firms selling similar products as domestic firms to U.S. customers must charge at least 10% more than what U.S. firms charge.
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True False
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Q 41Q 41
Compared to many other industrialized countries, the United States has historically exported a lower percentage of its products than other countries do.
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True False
Q 42Q 42
Compared to many other industrialized countries, the United States has historically exported a much higher percentage of its products than other countries do.
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True False
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Q 44Q 44
A favorable balance of trade occurs when the value of a nation's exports exceeds its imports.
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True False
Q 45Q 45
In any given year, the United States' cash outflow to other nations exceeds its cash inflow from other nations.
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True False
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Q 47Q 47
As the most powerful economy in the world, the United States does not need to concern itself with having an unfavorable balance of payments.
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True False
Q 48Q 48
The country of Hasastan exports $250 of goods and services and imports $170 of goods and services. Hasastan has an unfavorable balance of trade of $80.
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Q 49Q 49
If visitors from Germany spend money at Florida's Walt Disney World, it will increase the U.S.'s unfavorable balance of payments.
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True False
Q 50Q 50
A Chinese steel manufacturer is selling certain types of steel in the United States at a price significantly lower than it sells the same steel in its home market. This practice may be a violation of U.S. law.
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True False
Q 51Q 51
Japanese auto manufacturers, such as Toyota and Nissan, have invested billions of dollars in the United States by building new factories, warehouses, and offices. These investments increase favorably the balance of payments for the United States.
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True False
Q 52Q 52
When the U.S. provides foreign aid to Israel and Egypt, a balance of payments outflow occurs.
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True False
Q 53Q 53
The value of Chinese exports coming to the United States is greater than the value of goods China buys from the U.S. This results in a U.S. trade deficit with China.
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True False
Q 54Q 54
The country of New Florentina mines more fluorite each year than it needs for its own manufacturing purposes. Recently, a neighboring country complained that its manufacturing sites could buy fluorite from New Florentina cheaper than they could buy it from its own mines. A government trading expert's claim that New Florentina is dumping fluorite onto its neighbor's market is probably accurate.
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True False
Q 55Q 55
When competing in global markets, business organizations utilize a variety of strategies to reach foreign buyers.
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Q 56Q 56
Through licensing, domestic firms give foreign manufacturers/producers the right to produce their product and use their trademark in exchange for royalties.
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True False
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Q 59Q 59
An advantage of licensing is that licensors spend little or no money to produce and market their products. These costs are born by the licensees.
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True False
Q 60Q 60
The U.S. government is reducing Export Assistance Centers due to businesses' lack of interest in their support.
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True False
Q 61Q 61
Export trading companies assist businesses in reaching buyers, and dealing with customs, documentation, and payment.
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True False
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Q 63Q 63
One advantage of licensing as a strategy to enter the global market is the sharing of trade secrets.
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True False
Q 64Q 64
While franchising is popular in the United States, it is not an accepted strategy for firms in the global market.
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Q 65Q 65
One advantage of franchising is that the parent corporation does not need to concern itself with adapting to the culture of another country.
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True False
Q 66Q 66
Contract manufacturing is when a firm pays foreign manufacturers to produce its product. The foreign manufacturer places the domestic company's label on the products.
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Q 69Q 69
A joint venture is a partnership in which two or more companies join to undertake a major project. All parties commit financing and risk to the project.
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Q 70Q 70
According to current U.S. laws, American firms are prohibited from participating in joint ventures with foreign firms.
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Q 71Q 71
The purpose of forming strategic alliances is to share the costs of marketing new products and services to several countries.
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True False
Q 72Q 72
A disadvantage of creating a foreign subsidiary is the loss of control over technology and expertise used in the production of the product.
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True False
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Q 75Q 75
Any corporation that exports at least 50% of its total output can be classified as a multinational corporation.
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True False
Q 76Q 76
Firms with a physical presence in several different nations are considered multinational corporations.
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True False
Q 77Q 77
Sovereign wealth funds (a form of foreign direct investment) are investment funds controlled by governments that hold large stakes in foreign companies.
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True False
Q 78Q 78
As a form of franchising, sovereign wealth funds are getting very little attention as a strategy for doing business in foreign markets.
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True False
Q 79Q 79
One characteristic of an international joint venture is all parties sharing the risk of a major project.
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True False
Q 80Q 80
A firm desiring to enter a foreign market with a limited investment should consider licensing.
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Q 81Q 81
When Nestlé, a Swiss company, purchased Ralston Purina, a U.S. company, Ralston Purina became a foreign licensee.
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Q 82Q 82
A firm may export everything it produces overseas and yet not be considered a multinational.
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Q 83Q 83
Contract manufacturing is a low-cost way for GAP to outsource the production of its clothing designs.
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Q 84Q 84
Strategic alliances almost always result in one company taking over the financial interests of another company.
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True False
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Q 87Q 87
Leigh has created a technique for drying flowers that retains the vibrant color of certain flowering plants. Although out of style in the U.S., dried flower arrangements are still highly sought after in several European and Asian nations. It is difficult to preserve the ingredients that go into her formula for more than a month. She decides to partner with firms in other nations to make and sell the formula, but you suggest she license the formula to foreign companies and agree to royalties when they create the formula and sell it. Your advice makes better sense.
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True False
Q 88Q 88
The Nissan automobile assembly plant in Tennessee is an example of foreign direct investment in the United States.
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Q 89Q 89
Kodak contracts with a firm in Taiwan to manufacture Kodak digital cameras. This is an example of a joint venture.
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Q 90Q 90
The All-Sports Gaming Company has avoided contract manufacturing abroad due to the significant start-up costs in buying land and setting up its own manufacturing plants.
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True False
Q 91Q 91
The Tsingtao Brewing company pays a fee to AB-InBev for the right to brew and distribute Budweiser in China. Tsingtao is the licensor and the fee paid is a royalty.
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True False
Q 92Q 92
The purchase of U.S.-based Anheuser-Busch by Belgian brewer InBev is an example of foreign direct investment.
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True False
Q 93Q 93
An example of foreign direct investment would be Pepsi granting a Japanese firm the use of its formula and trademark, for a fee.
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True False
Q 94Q 94
General Electric's (GE) website noted, "Russia has been one European country in which GE has made significant investments. GE is one of the largest foreign companies in Russia, operating multiple businesses including an equipment fleet with more than 1,500 large units." With physical presence in Russia, Argentina, Australia, Belgium, Greece, Kenya, Canada and other countries, GE is an example of a multinational company.
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True False
Q 95Q 95
Ozark Bikes, Inc., has information that its bicycles will sell in Vietnam. In order to sell its products in Vietnam, the Vietnamese government requires Ozark Bikes to enter into a partnership (also known as a joint venture) with a domestic firm. Both firms will assume costs and risk in the venture.
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True False
Q 96Q 96
In recent years, the government of Saudi Arabia has invested over $900 billion in foreign companies, including several U.S. companies. This move constitutes the creation of a sovereign wealth fund, an emerging type of foreign direct investment.
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True False
Q 97Q 97
Sociocultural, economic, and legal/regulatory hurdles cause significant challenges in global trade.
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True False
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Q 99Q 99
Successful multinational corporations disregard cultural differences between countries where they own property and perform business transactions.
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Q 100Q 100
Sociocultural differences that affect global businesses include customs, language, and religion.
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True False
Q 101Q 101
In the past, foreign companies have adapted to U.S. culture more easily than U.S firms have adapted to foreign cultures.
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True False
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Q 103Q 103
Effective marketing strategies focus on the product and ignore the sociocultural differences in the global environment.
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True False
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Q 106Q 106
The Foreign Corrupt Practices Act of 1978 created an advantage for American businesspeople to compete in global markets.
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Q 107Q 107
An exchange rate is the value of one nation's currency relative to the currencies of other nations.
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Q 109Q 109
Under a system of floating exchange rates, the value of a country's currency is determined by government regulation.
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Q 110Q 110
Devaluation refers to a decline in the value of a nation's currency relative to other currencies.
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Q 111Q 111
Bartering is the exchange of goods or services for other goods or services with no exchange of money traded.
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Q 112Q 112
Countertrading is a form of exchange where firms will put certain products "on the counter" offering them to foreign customers at a cheaper price than what they would offer them to domestic customers.
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Q 113Q 113
Efficient currency exchange markets have eliminated countertrade in global business transactions.
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Q 116Q 116
The introduction of standardized international laws regulating business organizations has greatly simplified global trade.
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Q 117Q 117
The same proven management styles used by companies in their domestic operations can be employed in their foreign subsidiaries.
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Q 119Q 119
From a sociocultural perspective, foreign companies have experienced a good amount of success in adapting their products and services to the U.S. market.
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True False
Q 120Q 120
When it comes to ethics, successful American businesspeople are encouraged to follow the policy of "when in Rome, do as the Romans."
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True False
Q 121Q 121
Since patent and copyright laws are the same in all nations, they are not of much impact to firms that compete globally.
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True False
Q 122Q 122
If you travel to Mexico and the exchange rate is 12 pesos for one U.S. dollar, the peso is said to have strength against the dollar because you can get so many more pesos than you can dollars.
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Q 123Q 123
American businesspersons often fail to adapt to foreign markets because they feel that American culture is superior to other cultures in the world.
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Q 124Q 124
Differences in electrical systems throughout the world can impair a U.S. firm's ability to sell its products to other countries.
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Q 125Q 125
Recently a news article described the bootlegging of music originally recorded by popular celebrities in the U.S. It seems that a recording made in the U.S. can be copied within a couple of hours and sold abroad. The U.S. government is able to readily prosecute foreign companies involved in these illegal actions.
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True False
Q 126Q 126
A United States firm recently won a large contract with a company in Bangladesh by providing government officials and company officials with American cars and promises to provide monetary gifts in exchange for the business. Fortunately, U.S. law, under the Foreign Corrupt Practices Act, permits U.S. companies to operate in this manner.
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True False
Q 127Q 127
When studying abroad last year, Reilly found that his U.S. dollars did not stretch as far as he had hoped. Each time he exchanged U.S. dollars for euros, he gave up more U.S. dollars in exchange for less euros. Obviously, the dollar had strength against the euro.
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True False
Q 128Q 128
The Ozark Bike Company recently entered into an agreement with a large Japanese retailer to distribute its bicycles in Japan. Ozark Bike Company sees itself in a favorable position because the yen is gaining strength compared to the U.S. dollar making it cheaper for Japanese customers to buy U.S. products.
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True False
Q 129Q 129
A few years ago, a well-known celebrity who promoted a line of clothing was accused of supporting child labor in a Honduras manufacturing site where the clothes were made. Although the celebrity's image was tarnished, he immediately was able to close down the operation due to a violation of international law.
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True False
Q 130Q 130
Idle Time Gaming, Inc., needed silicon wafers that it knew could be mass-produced efficiently by Silicon City, Inc., a start-up firm in India. The Indian company needed MSG (metallurgical grade silicon) in order to make the wafers, which it knew it could get from a Chinese firm. The Chinese firm (mostly owned by the Chinese government) agreed to supply the silicon to the Indian company if it could get a certain quantity of gaming hardware from Idle Time. This beneficial exchange is described as countertrading.
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True False
Q 131Q 131
Johanna Breese, a graduate student from Carnegie Mellon, connected with the culture of Madagascar when she created lamba hoany (a native garment) with artful messages to save the more than 150 rare species of animals that inhabit Madagascar. In contrast to many Americans trying to do business abroad, Johanna successfully adapted her message to the native culture when she imprinted it on the native garment.
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True False
Q 132Q 132
Trade protectionism is the use of government regulations to encourage the import of goods and services.
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True False
Q 133Q 133
Countries often use trade protectionism measures to protect their domestic industries from foreign competition.
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Q 138Q 138
Restrictive standards that detail exactly how a product must be sold in a country are examples of protective tariffs.
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True False
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Q 140Q 140
The main goal of the General Agreement on Tariffs and Trade (GATT) was to reduce trade restrictions among world nations.
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True False
Q 141Q 141
The World Trade Organization (WTO) was established to mediate trade disputes among nations.
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True False
Q 142Q 142
One goal of the World Trade Organization (WTO) is to increase national subsidies on agricultural products.
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True False
Q 143Q 143
A common market is a group of countries that have no internal tariffs among member nations, yet have a common external tariff.
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True False
Q 144Q 144
A major goal of the Mercosur common market consisting of several South American countries is to develop a common currency.
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True False
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Q 146Q 146
CAFTA permits the United States, Canada, and Mexico to reduce trade barriers with one another while maintaining independent trade agreements with other countries.
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True False
Q 147Q 147
Since the approval of the North American Free Trade Agreement (NAFTA), the value of U.S. exports to Mexico and Canada has increased.
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True False
Q 148Q 148
Opponents of the North American Free Trade Agreement (NAFTA) warned that it would have serious economic consequences such as the loss of U.S. jobs.
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True False
Q 149Q 149
According to the theory of mercantilism, a country should develop policies that encourage a favorable balance of trade.
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True False
Q 150Q 150
The principle of mercantilism encouraged nations to keep economics separate from politics.
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True False
Q 151Q 151
If a protective tariff is placed on an imported product, the added cost will go to the government.
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True False
Q 152Q 152
The complete ban on the sale of Cuban cigars in the United States is an example of an import quota.
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True False
Q 153Q 153
Imported wines such as Pinot Noirs from France or Italy often sell at a higher price than wine from Napa Valley, California. This is due to the protective tariff importers pay for the foreign wine.
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True False
Q 154Q 154
The purpose of enacting some type of protectionist policy toward foreign goods is to limit competition from abroad, particularly when the country has domestic companies that produce and sell the same products and services.
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True False
Q 155Q 155
The North American Free Trade Agreement (NAFTA) requires member nations to negotiate uniform trade agreements with nonmember nations.
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True False
Q 156Q 156
With the achievements of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), nearly all barriers to trade expansion are finally removed.
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True False
Q 157Q 157
The objectives of the North American Free Trade Agreement (NAFTA) include allowing free immigration among Canada, Mexico, and the U.S.
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True False
Q 158Q 158
A more recent free-trade agreement among Cost Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the U.S. is known as the Central American Free Trade Agreement. Its strategy is to open new markets for all member countries and to lower tariffs among participating nations.
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True False
Q 159Q 159
On a number of issues, the strategy behind common markets is debatable, but GATT is certain that such alliances do not prohibit individual member nations from expanding globally.
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True False
Q 160Q 160
One of the rules of a common market is that all participating nations will uphold a common tariff on goods and services that are imported from countries that are not members of the trading bloc. Goods imported from nonmember countries are more expensive than goods coming from member countries.
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True False
Q 161Q 161
If two nations have a dispute over an international patent, the World Trade Organization may be asked to mediate and provide a decision within one year's time.
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True False
Q 162Q 162
The nation of New Maraguay has a small commercial airplane industry that is struggling to keep up with the two large international commercial airplane manufacturers. The other nations in its trading bloc have agreed on an import quota on commercial airplanes, which limits the number of planes that any country in the trading bloc can buy from other airplane manufacturers. This strategy is necessary to help the New Maraguay's airplane manufacturer while it is in its infancy.
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True False
Q 163Q 163
A small Italian grocery store in a large city sells five different kinds of feta cheese: Bulgarian, French, Danish, Greek, and a domestic cheese from Oregon. The domestic cheese sells for less than $2.00 per pound, while all the international cheeses are priced at over $4.00 per pound. Clearly, there is an embargo on international food products.
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True False
Q 164Q 164
The country of New Florentina requires that all imported beverages be contained in clear, well-labeled recyclable glass bottles. Several beverage producers refuse to trade with New Florentina because the cost of glass bottles cuts into their profits to the point where it just isn't worth it. New Florentina has created a nontariff barrier.
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True False
Q 165Q 165
With all its perception of opportunity, the expansion of global trade is still plagued by terrorism, nuclear proliferation, rogue states, and other issues.
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True False
Q 166Q 166
China and Russia present enormous trading opportunities. However, due to political risks in those counties, foreign direct investment is halted.
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True False
Q 167Q 167
While Asia represents an important source of U.S. imports, few export opportunities exist for U.S. firms to sell goods and services to Asian consumers.
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True False
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True False
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Q 170Q 170
Profitable opportunities in global markets are diminishing for small and medium-sized businesses.
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True False
Q 171Q 171
Offshore outsourcing is another term used to describe the act of U.S. firms selling their domestically manufactured goods to foreign customers.
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True False
Q 172Q 172
A "second wave" of offshore outsourcing involves sizable numbers of skilled, well-educated, middle-income workers in service-sector jobs.
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True False
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Q 174Q 174
The second wave of offshore outsourcing is having a more negative effect on the U.S. job market.
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True False
Q 175Q 175
Only large firms have the resources needed to successfully compete in the global environment.
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True False
Q 176Q 176
As a market for U.S. exports, China represents the only major business opportunity on the continent of Asia.
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True False
Q 177Q 177
China's one-party political system, its past human rights abuses, and issues related to counterfeiting of products continue to concern some U.S. firms about doing business there.
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True False
Q 178Q 178
In the past few decades, U.S. manufacturers shifted focus from manufacturing and assembling products, to the design and architecture of products. Now, a new shift: the offshore outsourcing of design and architecture is proving to be an even more serious disruption to the U.S. economy.
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True False
Q 179Q 179
Yesterday, Frank was trying to use his new laptop features, with only a negligible amount of success. His warranty said that he had three months of free technical support, so he promptly called the tech support number. After several minutes, he finally got through to someone who spoke English (the same language he speaks), but the dialect was still difficult to understand. He shook his head as he tried to listen carefully to every word the guy at the help desk provided, and thought to himself, "There are some pros and cons to outsourcing. I'm not certain the service is adding value for the customer."
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True False
Q 180Q 180
Telewhiz, Inc., just contracted with a firm in the Philippines to provide customer service for its smartphone customers. Although there were cheaper labor markets that Telewhiz could have tapped, customers have reported that they understand English-speaking Filipino people better than English-speaking people in other countries. As an outsourcing option, it is a good compromise.
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True False
Q 181Q 181
As you round out your final year of college, you are trying to decide on the last two business electives you need to take. You are leaning toward international marketing and international financing because you recall reading that Forrester Research estimates that more than 3 million jobs could move to global markets in the next 10 years.
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True False
Q 182Q 182
You sell paint products and accessories for painters. Recently, you were in contact with merchants from India who have taken an interest in your products and are willing to talk more about entering into a contractual deal to purchase your goods. This opportunity may be just the thing to get your business out of its slump, because you learned from your Introduction to Business class that very few barriers exist between U.S. and Indian markets.
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True False
Q 183Q 183
____________ is the selling of products to another country.
A) In-trading
B) Exporting
C) Importing
D) Dumping
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Multiple Choice
Q 184Q 184
_____________ is buying products from another country.
A) Importing
B) Outsourcing
C) Retailing
D) Exporting
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Multiple Choice
Q 185Q 185
The largest importer in the global market today is:
A) Japan.
B) Russia.
C) Germany.
D) United States.
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Multiple Choice
Q 186Q 186
In volume of exports, the two leading nations are:
A) U.S. and China.
B) U.S. and Canada.
C) China and Germany.
D) China and France.
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Multiple Choice
Q 187Q 187
The world market is approximately ______________.
A) 7 billion potential customers
B) 300 million potential customers
C) 200 billion potential customers
D) 30 billion potential customers
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Multiple Choice
Q 188Q 188
Which of the following continents is home to the largest percentage of the world's population?
A) Africa
B) Europe
C) North America
D) Asia
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Multiple Choice
Q 189Q 189
A nation has a ___________ in the production of a good or service if it can produce that good or service more effectively or efficiently than it can produce other goods.
A) supreme advantage
B) primary efficiency
C) qualified advantage
D) comparative advantage
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Multiple Choice
Q 190Q 190
__________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries.
A) Comparative advantage
B) Absolute advantage
C) Complete advantage
D) Dumping advantage
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Multiple Choice
Q 191Q 191
The theory of comparative advantage exists because:
A) there are too many products and services to choose from today.
B) customers are always comparing the quality of service from companies in the same industry.
C) no nation can produce all the products its people want and need.
D) free-trade agreements became the trend during the past 15 years.
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Multiple Choice
Q 192Q 192
One advantage of free trade is:
A) jobs are shifted to low-wage global markets.
B) service jobs are moved overseas.
C) advanced production operations are built in low-wage countries.
D) innovation for new products occurs which keeps firms competitively challenged.
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Multiple Choice
Q 193Q 193
The concept of free trade means:
A) buyers and sellers contract with each other and offer some goods at no cost.
B) goods and services can be traded freely across borders without political and/or economic barriers.
C) there is no exchange of currency for these products.
D) there is no exchange of currency, but the trading partners determine the value of the product and perform a bartering process to exchange goods.
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Multiple Choice
Q 194Q 194
Why does it make sense to trade with other nations?
A) After producing all the product and service its people want and need, a nation can sell the excess products to the world.
B) Some nations have lots of natural resources and technological know-how. They have an ethical obligation to offer the rest to other nations.
C) Other nations need foreign currency.
D) A nation will produce what it can produce most efficiently and effectively and buy from other nations what they can produce most efficiently and effectively.
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Multiple Choice
Q 195Q 195
Which of the following statements best describes the theory of comparative advantage?
A) The best way for a nation to ensure full employment is to be totally self-sufficient rather than relying on other nations to obtain goods and services.
B) Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce efficiently from other nations.
C) The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships.
D) A nation should produce those goods for which domestic demand is comparatively strong, and should import those goods for which domestic demand is comparatively weak.
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Multiple Choice
Q 196Q 196
The tiny nation of Tinian is extremely efficient in the mining of tin. However, its climate and terrain makes it difficult to produce corn. According to the theory of comparative advantage, Tinian should:
A) produce both tin and corn in order to remain self-sufficient.
B) watch the global market to see which product is bringing the highest price.
C) import the resources needed to produce corn.
D) concentrate its production on tin and buy corn from an efficient producer.
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Multiple Choice
Q 197Q 197
The theory of _______________ states that a nation should produce and sell goods to other countries that it produces most efficiently, and buy goods from other nations that they produce more efficiently.
A) comparative advantage
B) absolute advantage
C) mercantilism
D) bilateral advantage
Free
Multiple Choice
Q 198Q 198
Free trade between nations generally results in:
A) industrialized nations gaining at the expense of developing nations.
B) an increase of jobs in developed nations.
C) mutually beneficial exchange relationships.
D) higher prices for imported goods.
Free
Multiple Choice
Q 199Q 199
A free-trade agreement is likely to result in:
A) an increase in imported goods and services.
B) an absolute advantage.
C) less competition.
D) productivity increases in all product categories, for all participating nations.
Free
Multiple Choice
Q 200Q 200
Peru and Bolivia account for almost 97% of the production of quinoa seed, and most of it is sold to the U.S., Japan, and other wealthy nations. According to a former Colorado State agronomist who helped introduce the product into the U.S. several years ago, "This food is about the most perfect you can find for human diets." Although there are other areas where the seed will grow (including higher elevations in Colorado), the majority of the quinoa sold in the U.S. is imported from Peru and Bolivia. These two nations have a(n) ________________ in the production of quinoa.
A) absolute advantage
B) comprehensive advantage
C) comparative advantage
D) tertiary advantage
Free
Multiple Choice
Q 201Q 201
Carrie, a U.S. resident, says that her home computer was made in Japan. Carrie purchased a(n):
A) imported item.
B) exported item.
C) protected good.
D) generic good.
Free
Multiple Choice
Q 202Q 202
Household Appliances, Inc., has a manufacturing plant near Chicago. The company specializes in compact washers and dryers for countries where consumers have less living space. Household Appliances participates in the global market through:
A) importing.
B) dumping.
C) exporting.
D) balancing trade.
Free
Multiple Choice
Q 203Q 203
China has approximately 95% of the world's Neodymium, a rare earth metal used in consumer and military electronics and contemporary technology. The fact that this is a necessary metal for the production of many products we use today-everything from smartphones to smart bombs-means China can almost name its price! Which of the following describes this situation?
A) China has a near absolute advantage in Neodymium.
B) China has a comparative advantage in Neodymium.
C) China's rare earth industry is considered perfect competition.
D) China's rare earth industry participates in monopolistic competition.
Free
Multiple Choice
Q 204Q 204
Many of the toy products sold in the United States are imported from Taiwan because the Taiwanese can produce these products more efficiently than U.S. companies. This is an example of:
A) bilateral advantage.
B) comparative advantage.
C) absolute advantage.
D) unilateral advantage.
Free
Multiple Choice
Q 205Q 205
Climate and terrain in several South American countries are conducive to growing coffee efficiently. While other countries can grow coffee, they are not as efficient and effective at coffee growing because of short seasons and climate concerns. This fact would lead you to believe that South American countries have a(n) __________ advantage in the production of coffee.
A) comparative
B) absolute
C) unprotected
D) progressive
Free
Multiple Choice
Q 206Q 206
The only deposits of a rare and sought-after mineral known as Yuksporite are found in Russia. Since no other nation has deposits of Yuksporite, Russia has a(n)__________ in this mineral.
A) protected advantage
B) diversified benefit
C) absolute advantage
D) relative internal benefit
Free
Multiple Choice
Q 207Q 207
First Engineering, a large U.S.-based mechanical engineering firm, is considering entering the global market. Upon careful analysis of the global market, they will find that global trade:
A) opportunities are diminishing.
B) is dominated by emerging, developing countries.
C) is big business today and is expected to be more important in the future.
D) is likely to be severely restricted in the future by nontariff trade barriers.
Free
Multiple Choice
Q 208Q 208
After finishing college, Nathan joined his uncle's company in Miami, FL, a(n) _______ of bauxite, copper, and other minerals from the Chile. Every day, he brokers trades with mines in Chile to buy and transport these minerals into the U.S.
A) exporter
B) quota manager
C) importer
D) domestic trader
Free
Multiple Choice
Q 209Q 209
Fred Bergsten of the Institute for International Economics estimates that every $1 billion of U.S. exports:
A) replaces 250 service sector jobs with 25 manufacturing jobs in the U.S.
B) causes lost revenues for the U.S. federal government.
C) results in reduced profits for U.S. businesses.
D) generates over 7,000 jobs in the U.S.
Free
Multiple Choice
Q 210Q 210
A favorable balance of trade occurs when the value of:
A) imports equals the value of exports.
B) the cash inflows equals the value of the cash outflows.
C) imports is less than the value of exports.
D) the dollar is greater than the value of the euro.
Free
Multiple Choice
Q 211Q 211
An unfavorable balance of trade occurs when the value of:
A) imports equals the value of exports.
B) imports exceeds the value of exports.
C) cash inflows is equal to the value of cash outflows.
D) exports exceeds the value of imports.
Free
Multiple Choice
Q 212Q 212
The _____________ is the total value of a nation's exports compared to its imports measured over a specific period of time.
A) balance of payments
B) balance of trade surplus
C) balance of trade deficit
D) balance of trade
Free
Multiple Choice
Q 213Q 213
The __________ is the difference between money flowing into a country from exports, and money leaving the country for imports, plus money flows coming from other factors such as tourism, foreign aid, military expenditures, and foreign investment.
A) balance of payments
B) balance of trade surplus
C) balance of cash flows
D) balance of trade
Free
Multiple Choice
Q 214Q 214
Which of the following is included when calculating a country's balance of payments?
A) Foreign aid
B) Domestic unemployment
C) Domestic inflation rates
D) Foreign inflation rates
Free
Multiple Choice
Q 215Q 215
Which of the following is considered when calculating a country's balance of payments?
A) military expenditures
B) state unemployment
C) domestic inflation rates
D) foreign inflation rates
Free
Multiple Choice
Q 216Q 216
Since 1975, the U.S. has had a(n) ____________.
A) export surplus
B) import surplus
C) trade surplus
D) trade deficit
Free
Multiple Choice
Q 217Q 217
__________ is the practice of selling a product in foreign countries for a lower price than the good is sold in the producing country.
A) Deflating
B) Countertrading
C) Inflating
D) Dumping
Free
Multiple Choice
Q 218Q 218
When AB-InBev sells Budweiser beer made in St. Louis, MO, to Germany, the sales of its product would be classified as a U.S. ____________.
A) countertrade arrangement
B) export
C) import
D) foreign aid shipment
Free
Multiple Choice
Q 219Q 219
Even though the U.S. exports a large ___________ of goods and services, it exports a much lower __________ of its products than many other countries do.
A) percentage; amount
B) amount; percentage
C) amount; value
D) percentage; percentage
Free
Multiple Choice
Q 220Q 220
An important principle for firms desiring to export is:
A) sell to countries with high standards of living.
B) keep in mind that American methods are probably always best.
C) find a need in the global market and fill it.
D) if your product sells well in the U.S. it will sell well globally.
Free
Multiple Choice
Q 221Q 221
As a business strategy, the strategy behind "dumping" is to ____________.
A) gain a foothold in a new market
B) better utilize e-commerce opportunities
C) avoid trade protectionist laws
D) achieve eligibility for foreign aid
Free
Multiple Choice
Q 222Q 222
The value of goods imported into France exceeds the value of French exports. This indicates that France:
A) has an exchange rate decrease.
B) utilizes high tariffs.
C) has a budget deficit.
D) has a trade deficit.
Free
Multiple Choice
Q 223Q 223
Current trade data indicates that the nation of Bogusland exports more to other nations than it imports. Bogusland has:
A) an unfavorable balance of trade.
B) a trade surplus.
C) a trade deficit.
D) a low balance of trade.
Free
Multiple Choice
Q 224Q 224
Japanese automobile producers sold more of their Japanese production overseas than they sold in Japan. Their business strategy emphasizes:
A) importing.
B) licensing.
C) dumping.
D) exporting.
Free
Multiple Choice
Q 225Q 225
Monique's Unique Tile Boutique offers decorative tile from around the world. The owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer. Monique participates in _____________.
A) importing
B) licensing
C) dumping
D) exporting
Free
Multiple Choice
Q 226Q 226
Last year, the nation of Tigerland imported goods totaling $500 million and exported products totaling $386 million. Tigerland experienced a(n):
A) unfavorable balance of trade.
B) favorable balance of trade.
C) trade surplus.
D) benefit from membership in a free trade zone.
Free
Multiple Choice
Q 227Q 227
Last year, the nation of Kwansai reported that it had a favorable balance of trade even though it imported $11 billion worth of goods. This indicates that Kwansai:
A) exported $11 billion worth of goods.
B) exported more than $11 billion worth of goods.
C) overpriced the value of its exports.
D) exported less than $11 billion worth of goods.
Free
Multiple Choice
Q 228Q 228
Reviewing the recent experience of the United States in global markets reveals that the U.S has:
A) a merchandise trade surplus with the rest of the world.
B) a large trade deficit with China.
C) avoided becoming a debtor nation.
D) attracted very little foreign direct investment.
Free
Multiple Choice
Q 229Q 229
The nation of Redland reported that its imports for the previous year were $4 billion greater than its exports. During the same period, Redland reported a favorable balance of payments. This information suggests:
A) Redland has made an error in their reporting. The nation must have had a balance of payments deficit since more money flowed out of Redland for imports than flowed into the country for its exports.
B) Redland's gold reserves have increased in value.
C) money inflows from tourism, foreign aid, foreign investment and other sources more than offset Redland's trade deficit.
D) Redland devalued their currency to obtain a more favorable exchange rate.
Free
Multiple Choice
Q 230Q 230
The president of Auto Parts of America testified before Congress, urging them to limit the flow of imported automobile parts into the United States. He contended that these imports were priced lower than foreign producers were charging for them in their own countries. He believes foreign producers are:
A) dumping.
B) exercising trade deficits.
C) promoting free trade.
D) exhibiting ethnocentricity.
Free
Multiple Choice
Q 231Q 231
Nikkei Bike Parts testified before Congress defending the company against an accusation that it was dumping parts on the U.S. market. In her testimony, the president claimed _________________. Using traditional guidelines, Congress determined that Nikkei was not dumping.
A) Nikkei includes 10% overhead costs and an 8% profit margin in the price of all the parts they export to the U.S.
B) Japan runs a trade deficit with the U.S. in bike parts.
C) Nikkei is a staunch supporter of free trade.
D) Nikkei sells more bike parts in Europe than it does in the U.S.
Free
Multiple Choice
Q 232Q 232
Granting a foreign company the right to manufacture your product or to use your firm's trademark in return for a fee is called:
A) joint venture.
B) foreign subsidiary.
C) licensing.
D) outsourcing.
Free
Multiple Choice
Q 233Q 233
The fee paid to a firm in a licensing agreement that gives another firm the right to manufacture their product or use its trademark is called:
A) a joint venture.
B) a royalty.
C) a licensee.
D) an outsource agreement.
Free
Multiple Choice
Q 234Q 234
A major advantage of licensing is:
A) these arrangements almost always lead to a joint venture.
B) the bulk of the revenues gained by the licensee come back to the licensor.
C) your company name does not need to be associated with the product in a foreign country.
D) very little cost to the licensor.
Free
Multiple Choice
Q 235Q 235
A disadvantage of licensing is:
A) it's very costly for the licensor.
B) the licensee can decide to end the contract at a moment's notice.
C) your company's image is never permitted to be associated with the product, even though you are the developer.
D) the licensee may decide to use the expertise you have developed, break the agreement, and begin producing the product on his/her own.
Free
Multiple Choice
Q 236Q 236
The federal government created ___________ to help small and medium-sized businesses get involved in exporting.
A) the World Trade Organization
B) Federal Export Loan Banks
C) Export Assistance Centers
D) the Federal Trade Promotion Commission
Free
Multiple Choice
Q 237Q 237
_______________ are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.
A) Export trading companies
B) Licensees
C) Strategic alliances
D) Keiretsu
Free
Multiple Choice
Q 238Q 238
Export trading companies:
A) enter into joint ventures with firms wanting to export goods and services.
B) are government-owned businesses that help companies go global.
C) connect sellers in the U.S. with buyers in other nations, and help with customs, documentation and payments.
D) are similar to a corporation that sells franchises.
Free
Multiple Choice
Q 239Q 239
__________ is an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell the parent company's product or service to others in a given territory in a specified manner.
A) Franchising
B) Contract manufacturing
C) Import trading
D) Export trading
Free
Multiple Choice
Q 240Q 240
When a company's strategy is __________, the firm makes arrangements for a foreign manufacturer to produce the product. The domestic company's label and/or trademark are attached to the completed product.
A) franchising
B) contract manufacturing
C) import sourcing
D) export trading
Free
Multiple Choice
Q 241Q 241
A __________ is a partnership in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project.
A) multinational cooperative
B) joint venture
C) franchisee transfer
D) recruit affiliation
Free
Multiple Choice
Q 242Q 242
A __________ represents a long-term partnership between two or more companies established to help each firm build competitive market advantages, without sharing the cost of risk.
A) multinational cooperative
B) shared venture
C) global franchise
D) strategic alliance
Free
Multiple Choice
Q 243Q 243
An advantage of forming a joint venture is:
A) no shared costs or risk.
B) a perpetual arrangement.
C) it's a good strategy for entering new markets where you have never had a presence.
D) it's a great way to enter new markets without divulging any marketing or management strategy to the other member of the joint venture.
Free
Multiple Choice
Q 244Q 244
A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a:
A) licensor.
B) joint venture.
C) foreign subsidiary.
D) host company.
Free
Multiple Choice
Q 245Q 245
When foreign firms build production facilities in the United States, they are engaging in:
A) exporting.
B) foreign direct investment.
C) importing.
D) countertrading.
Free
Multiple Choice
Q 246Q 246
A risk unique to firms with direct investment in a foreign county is the potential takeover of the firm's assets by the government of that country. This takeover is called a(n):
A) hostile takeover.
B) political bias.
C) appropriation.
D) expropriation.
Free
Multiple Choice
Q 247Q 247
The __________________ is a firm that has made sizeable investments and has a physical presence in several foreign countries as a manufacturer and marketer of products and services.
A) trade cartel
B) multinational corporation
C) host company
D) import trading company
Free
Multiple Choice
Q 248Q 248
A fast-growing form of foreign direct investment is ______________, which are government-controlled investments in foreign companies.
A) sovereign wealth funds
B) multinational wealth funds
C) government mutual funds
D) government wealth management derivatives
Free
Multiple Choice
Q 249Q 249
A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n):
A) export trading company.
B) international brokerage house.
C) keiretsu.
D) global trade bank.
Free
Multiple Choice
Q 250Q 250
A benefit of contracting with export trading companies is:
A) They are the experts in establishing trading partners abroad, and negotiating all the details in retaining customers.
B) They are experts in staying out of the financial transactions of establishing new markets.
C) They will always assume the risk if your product does not sell to the foreign customer.
D) They keep you legal because they serve as the franchisor and make certain that your products meet ISO requirements.
Free
Multiple Choice
Q 251Q 251
One of the purposes of Export Assistance Centers is to:
A) help multinational corporations reach agreements with foreign governments.
B) provide subsidies to domestic firms hurt by dumping by foreign firms.
C) provide trade-finance support for small and medium-sized firms involved in direct exporting.
D) encourage domestic firms to become more competitive by forming keiretsu-like organizations, much like those found in Japan.
Free
Multiple Choice
Q 252Q 252
When entering a foreign market, Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer. This is an example of:
A) licensing.
B) franchising.
C) foreign direct investment.
D) foreign subsidiaries.
Free
Multiple Choice
Q 253Q 253
Licensing is a popular strategy because:
A) It boosts domestic market revenues.
B) The licensee has incentive to work hard and succeed because he/she has borne the cost.
C) Licensees spend little or no money to produce and market their products.
D) There are seldom any long-term contractual requirements.
Free
Multiple Choice
Q 254Q 254
Using contract manufacturing as a strategy to reach global markets offers firms the advantage of:
A) expert and experienced laborers.
B) reduced financial risks.
C) increased volatility.
D) currency stability.
Free
Multiple Choice
Q 255Q 255
Companies may have several reasons for creating joint ventures. Which of the following statements is one reason why firms may decide to form a joint venture?
A) They may wish to contract manufacture with each other.
B) They will save time to market if they pool their technological know-how.
C) These arrangements are always less risky than strategic alliances.
D) These arrangements avoid the temptation to tap into marketing and management expertise of the parent companies.
Free
Multiple Choice
Q 256Q 256
For a firm to be considered a multinational corporation, which of the following conditions must be true?
A) It must have manufacturing facilities and a physical presence in several countries.
B) Its marketing arm must be based at the company's world corporate headquarters.
C) Stock ownership must be domestic.
D) All transactions must be financed by the International Monetary Fund.
Free
Multiple Choice
Q 257Q 257
A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs). Why do these investments by governments with surplus cash flows worry trade experts?
A) SWFs invest in high-risk start-ups with no proven history of producing goods and services that developing or developed countries need. They may likely undermine the years of development of growing economies.
B) SWFs have a greater risk of going bankrupt than other investments because governments are not good at running businesses.
C) Some fear that governments investing their SWFs in large firms may gain control of natural resources, sensitive technologies, and the decision making of management.
D) Some trading experts believe that SWFs are supported by terrorist organizations, and their strategy is an indirect way to undermine the creation of U.S. jobs.
Free
Multiple Choice
Q 258Q 258
The Dabble Corporation wants to begin exporting its products. The company needs advice about how to get started, as well as trade-finance support. The federal government has established _____________ to help companies like Dabble Corporation.
A) the World Trade Commission
B) Export Assistance Centers
C) export trading companies
D) Federal Reserve Banks
Free
Multiple Choice
Q 259Q 259
The quinoa seed is in high demand in wealthier countries such as the U.S. and Japan. Approximately 97% of all quinoa production comes from small farmers in Bolivia and Peru who farm at high elevations. The seed is considered highly nutritious and is sold to markets in other countries. The seed is now considered an important __________ for Bolivia and Peru.
A) foreign direct investment
B) quota
C) export
D) import
Free
Multiple Choice
Q 260Q 260
Pepsi Cola entered into a long-term contract with a South African beverage company. The contract calls for the South African firm to produce and market Pepsi Cola in South Africa. Pepsi will receive royalties on each case of beverage sold. This is an example of:
A) licensing.
B) a joint venture.
C) a foreign subsidiary.
D) foreign direct investment.
Free
Multiple Choice
Q 261Q 261
McGowan Corporation of Ireland and Enomoto Enterprises based in Japan recently produced a new electric car with rechargeable batteries that can be driven at high speeds for long distances. They have shared the investment, each contributing important technological expertise to the effort. These firms entered into a(n) ____ to build this car.
A) joint venture
B) multinational cartel
C) industrial countertrade agreement
D) multinational limited partnership
Free
Multiple Choice
Q 262Q 262
Boasting a $1.6 billion Ketchup brand, the Heinz Company is flying high with a 44% increase in its sales of Indonesian-based ABC, a soy sauce company that it owns. ABC is a _____________ of Heinz.
A) licensed venture
B) joint venture
C) export trading company
D) foreign subsidiary
Free
Multiple Choice
Q 263Q 263
Nike _________________ its products in foreign countries, where labor is cheap and production sites are owned by other companies. This strategy allows Nike to experiment in new markets without incurring large start-up costs involved with building their own production facilities.
A) contract franchises
B) pays governments to market
C) globally licenses
D) contract manufactures
Free
Multiple Choice
Q 264Q 264
If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a:
A) global franchise.
B) a global joint venture.
C) foreign subsidiary.
D) contract manufacturer.
Free
Multiple Choice
Q 265Q 265
Which of the following statements is the most accurate observation regarding multinational corporations?
A) Rather than manage manufacturing and marketing facilities overseas, most multinational corporations attempt to enter global markets by exporting domestically produced goods.
B) Most multinational corporations are small- to medium-sized firms.
C) Because of political and economic concerns, most multinational corporations choose to ignore investment opportunities in China and Russia.
D) Only those firms with a physical presence in different nations qualify as multinational corporations.
Free
Multiple Choice
Q 266Q 266
Emerson, Inc., reported that it owns and operates 265 companies worldwide with 23% of its sales coming from Europe, 18% from Asia, 46% from the U.S., and 13% from other parts of the world. Clearly, Emerson exemplifies ________________.
A) a sovereign wealth fund
B) a multinational corporation
C) a foreign subsidiary
D) an expropriated organization
Free
Multiple Choice
Q 267Q 267
Adam's Apple Corporation ships all of the apples from its orchards in Washington to a single buyer in Japan. The firm's entire profits are derived from this international transaction. Adam's Apple Corporation:
A) is an example of a multinational corporation.
B) is not a multinational corporation.
C) is contributing to the U.S. balance of trade deficit.
D) will benefit greatly from the establishment of NAFTA.
Free
Multiple Choice
Q 268Q 268
ExxonMobil Corporation refines and markets its petroleum products in many different nations. In addition, Exxon's stockholders and managers come from many different nations. If some of the nations where it operates decided to take over the assets of the company, this act would constitute:
A) patent infringement.
B) expropriation.
C) illegal activity.
D) hostile takeover.
Free
Multiple Choice
Q 269Q 269
Which of the following terms describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?
A) Culture
B) Ethnocentricity
C) Institutional society
D) Social myopia
Free
Multiple Choice
Q 270Q 270
____________ describes an attitude held by some American businesspeople that American culture is superior to all others.
A) Primary culture
B) Ethnocentricity
C) Cultural institutionalism
D) Social myopia
Free
Multiple Choice
Q 271Q 271
Ethnocentricity means:
A) "When in Rome, do as the Romans!"
B) You believe your culture is superior to others.
C) Cultural awareness.
D) A trend toward accepting other cultures and trying various foods and religions to see if they fit your lifestyle.
Free
Multiple Choice
Q 272Q 272
Which of the following sociocultural forces can have a significant impact on global business operations?
A) Religion
B) Universal sales standards
C) Single-phase marketing
D) Global marketing
Free
Multiple Choice
Q 273Q 273
Which of the following represents the value of one nation's currency relative to the currencies of another country?
A) Euro rate
B) Currency rate
C) Exchange rate
D) Standard of living
Free
Multiple Choice
Q 274Q 274
Global financial markets operate under a system of ___________, where the supply and demand for various currencies dictate their value at any moment in time.
A) living rates
B) foreign good rates
C) floating exchange rates
D) live trading rates
Free
Multiple Choice
Q 275Q 275
__________ is the exchange of merchandise or services for other merchandise or services without the exchange of money.
A) Exporting
B) Bartering
C) Importing
D) Factoring
Free
Multiple Choice
Q 276Q 276
Due to a nation's weak currency, people may have to fall back on ____________.
A) exporting
B) bartering
C) importing
D) factoring
Free
Multiple Choice
Q 277Q 277
__________ is lowering the value of a nation's currency relative to other currencies.
A) Revaluation
B) Deflation
C) Devaluation
D) Negative valuation
Free
Multiple Choice
Q 278Q 278
_______ is a complex form of bartering in which several countries may be involved, each trading products and services for the products and services of another country.
A) Venture bartering
B) Global monetarism
C) Countertrading
D) Global counter-exchange
Free
Multiple Choice
Q 279Q 279
Under the floating exchange rate system, the value of a country's currency is determined by:
A) the monetary authorities of that country.
B) the United Nations Committee on Floating Currencies.
C) the currency's supply and demand in the global market.
D) countertrading.
Free
Multiple Choice
Q 280Q 280
The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials, to secure business contracts is the _____________.
A) Foreign Corrupt Practices Act
B) Foreign Anti-trust Act
C) Multinational Collusion Law
D) Global Good Conduct Law
Free
Multiple Choice
Q 281Q 281
Which of the following statements describes laws and regulations in global markets?
A) No central system of law exists.
B) The World Trade Organization reigns supreme and dictates law for all global markets.
C) Most trading partners will default to the laws that govern the seller's home country.
D) With the exception of labor relations, most laws are pretty standard across global markets.
Free
Multiple Choice
Q 282Q 282
To understand legal and regulatory conditions and be successful in global markets it's often useful to contact:
A) the local Better Business Bureau.
B) local businesspeople in the host countries.
C) the Regional Economic Development Trading Desk (REDTD).
D) the Organization for Economic Cooperation and Development (OECD).
Free
Multiple Choice
Q 283Q 283
People from other nations sometimes comment on the ethnocentric attitudes of U.S. businesspeople. This indicates that American businesspeople:
A) follow the philosophy of "when in Rome, do as the Romans."
B) quickly accept the suggestions and ideas of others.
C) believe that American culture is superior to all others.
D) celebrate the many ethnic groups that make up American life.
Free
Multiple Choice
Q 284Q 284
A sociological challenge that must be overcome in order to be successful in the global market is:
A) a lack of cultural understanding.
B) an overly anxious desire to please at all cost.
C) inequality of global natural resources.
D) wealth management.
Free
Multiple Choice
Q 285Q 285
_________________ differences such as insufficient electrical power and transportation systems can present special problems for U.S. firms when attempting to enter global markets.
A) Physical and environmental
B) Legal and regulatory
C) Economic
D) Governmental
Free
Multiple Choice
Q 286Q 286
Casey is typical of many U.S. businesspeople. Casey feels the U.S. culture defines the model for the rest of the world, and that the "American way" of doing things is the best. Casey is guilty of:
A) ethnic plagiarism.
B) ethnocentricity.
C) culture shock.
D) counter culture.
Free
Multiple Choice
Q 287Q 287
In order to level the playing field in trade between the U.S. and China, U.S. policymakers have called upon China's government to allow the yuan to float freely, as other world currencies. Through government regulation, China maintains an undervalued currency, which results in:
A) more buying power for Chinese consumers who want to purchase U.S. goods and goods from other countries.
B) maintaining robust Chinese exports and a favorable balance of trade for China.
C) developing better relations with industrialized countries who want to increase the value of their exports.
D) stability and strength of the Chinese yuan against the U.S. dollar and the euro.
Free
Multiple Choice
Q 288Q 288
Workers in the nation of Argenia prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This __________ difference between Argenian workers and U.S. workers represents a management challenge for firms trading in the global market.
A) geo-political
B) economic
C) sociocultural
D) regulatory
Free
Multiple Choice
Q 289Q 289
A Mexican firm has agreed to trade petroleum to an American importer in return for U.S.-made computers. This arrangement is an example of:
A) a letter of credit arrangement.
B) a nontariff trade.
C) arbitrage.
D) barter.
Free
Multiple Choice
Q 290Q 290
Idle Time Gaming, Inc., needed silicon wafers that it knew could be mass-produced efficiently by Silicon City, Inc., a start-up firm in India. The Indian company needed MSG (metallurgical grade silicon) in order to make the wafers, which it knew it could get from a Chinese firm. The Chinese firm agreed to supply the silicon to the Indian company if it could get a certain quantity of gaming hardware from Idle Time. This beneficial exchange is described as:
A) beneficial contracting.
B) contract manufacturing.
C) third Party purchasing.
D) countertrading.
Free
Multiple Choice
Q 291Q 291
An influential foreign government official approaches your firm requesting a large sum of money. In return for this bribe, the official promises that your firm will receive preferential treatment in future government contracts. You refuse the request, explaining that the _________ Act of the United States prohibits you from making such payments.
A) Federal Trade Commission
B) Sherman Anti-trust
C) Foreign Corrupt Practices
D) Celler-Kefauver
Free
Multiple Choice
Q 292Q 292
U.S. recording studios are feeling the pinch in profits due to the fact that artists' music is copied and sold overseas within 24 hours of the music selling in the U.S. market. As a student who is now aware of the challenges businesses face in global trade, which of the following statements do you think is an accurate representation of this situation?
A) The copying and selling of the artist's original music is illegal and enforceable by international copyright law.
B) The copying and selling of the artist's music is legal due to the fact that the Internet has changed copyright laws.
C) U.S. copyright laws do not necessarily apply globally.
D) Copyright laws only protect the artist, but not the recording studios.
Free
Multiple Choice
Q 293Q 293
A United States firm recently won a large contract with a company in Malaysia, by providing the foreign nation's government officials with American cars and a promise of additional monetary gifts. Clearly, this procedure:
A) violates the Foreign Corrupt Practices Act.
B) violates the Fair and Balanced Competitive Practices Act.
C) defines the common business practices of the foreign nation and should be respected.
D) defines the terms of the business contract, and as long as both parties sign, the agreement is binding.
Free
Multiple Choice
Q 294Q 294
When studying abroad last year, Blake found that his U.S. dollars did not stretch as far as he had hoped. Each time he exchanged U.S. dollars for euros, he gave up more U.S. dollars in exchange for less euros. The exchange rate indicates:
A) the dollar has gained strength against the euro.
B) the euro is weak against the U.S. dollar.
C) the euro has gained strength against the dollar.
D) the demand for dollars is stronger than the demand for euros.
Free
Multiple Choice
Q 295Q 295
The Ozark Bike Company recently entered into an agreement with a large Japanese retailer to distribute its bicycles in Japan. Ozark Bike Company sees itself in a favorable position because:
A) the yen is gaining strength compared to the U.S. dollar, making it cheaper for Japanese customers to buy U.S. products.
B) the yen is down against the U.S. dollar, making it cheaper for Japanese customers to buy U.S. products.
C) it was traditionally against Japanese culture to ride bicycles, so the U.S. bike company would be dealing with a niche market.
D) the Japanese do not permit foreign direct investment. U.S. companies will make all the bikes in the U.S., which creates more jobs on U.S. soil.
Free
Multiple Choice
Q 296Q 296
Rosa's aunt was taking a cruise to Brazil. She suggested to Rosa that she would be glad to buy her some jewelry while in port in Rio de Janeiro because the exchange rate would be to her benefit. This means:
A) The currency in Rosa's home country is weak against the Brazilian currency.
B) The currency in Rosa's home country will be almost equal to the Brazilian currency; otherwise it would not be a good exchange.
C) The currency in Rosa's home country is devalued.
D) The currency in Rosa's home country has strength against the Brazilian currency.
Free
Multiple Choice
Q 297Q 297
Hennessy Hardware, a U.S. retailer, buys much of its inventory from Asian countries. Hennessy Hardware would benefit if the value of the dollar ________ relative to the currencies of the countries from which Hennessy imports.
A) rose
B) fell
C) remained constant
D) floated unpredictably
Free
Multiple Choice
Q 298Q 298
Jake's family business sells and installs tile in bathrooms and kitchens. He is convinced that heater coils under bathroom floor tiles is the best thing since sliced bread. In his effort to avoid domestic competition, he sets his sights on the vast Chinese market. Much to his surprise, most Chinese people do not yet have indoor plumbing and are accustomed to government-run communal baths. Jake realizes that his global marketing effort is hampered by:
A) legal and regulatory constraints.
B) cultural constraints.
C) physical and environmental constraints.
D) the floating exchange rate.
Free
Multiple Choice
Q 299Q 299
Brett, a U.S. student, is preparing for a trip to Thailand in the near future. He read in The Wall Street Journal that the dollar has strength against the Thai baht. Which of the following would be an exchange that would indicate this currency situation?
A) 10 U.S. dollars for 1 baht.
B) 1 U.S. dollar for 1 baht.
C) 1 U.S. dollar for .22 baht.
D) 1 U.S. dollar for 34.78 baht.
Free
Multiple Choice
Q 300Q 300
Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of:
A) negotiated rate adjustments between the U.S. government and the World Trade Organization.
B) decisions made by the Federal Reserve Board of Governors in order to implement monetary policy.
C) fluctuations in the world price of gold.
D) changes in the supply of and/or demand for dollars in the global currency market.
Free
Multiple Choice
Q 301Q 301
If global trade experts predict that the value of the dollar will soon fall, it will result in:
A) both the prices of imported goods rising and prices of U.S. goods sold overseas rising, as well.
B) prices of imported goods rising, but prices of U.S. goods sold overseas falling.
C) prices of imported goods falling and prices of U.S. goods sold overseas falling, as well.
D) prices of imported goods falling, but prices of U.S. goods sold overseas rising.
Free
Multiple Choice
Q 302Q 302
___________ is the use of government regulations to limit the import of goods and services.
A) Trade protectionism
B) Fiscal policy
C) Countertrade policy
D) Monetary policy
Free
Multiple Choice
Q 303Q 303
Trade protectionism:
A) Always leads to a favorable balance of trade.
B) Is the use of government regulations to limit the import of goods and services.
C) Is not a barrier to global trade.
D) Encourages dumping by foreign industries in the home country.
Free
Multiple Choice
Q 304Q 304
______________ was an 18th-century belief that a nation should try to sell more goods to other nations than it buys from them.
A) Capitalism
B) Comparative advantage
C) Mercantilism
D) Inflation
Free
Multiple Choice
Q 305Q 305
The two basic types of tariffs are:
A) goods and services.
B) general and limited.
C) comparative and absolute.
D) revenue and protective.
Free
Multiple Choice
Q 306Q 306
A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.
A) protective
B) restrictive
C) progressive
D) revenue
Free
Multiple Choice
Q 307Q 307
________ tariffs are designed to raise money for the government.
A) Regulatory
B) Revenue
C) Price
D) Profit
Free
Multiple Choice
Q 308Q 308
In an effort to protect domestic jobs, some countries will place a limit on the number of certain types of products that can be imported. These limits are called:
A) revenue tariffs.
B) protective tariffs.
C) import quotas.
D) tariffs.
Free
Multiple Choice
Q 309Q 309
A(n) __________ refers to a complete ban on importing or exporting of products from a specific country.
A) absolute tariff
B) health quarantine
C) quota
D) embargo
Free
Multiple Choice
Q 310Q 310
Some governments initiate restrictive standards that detail exactly how a product must be sold in a country. Trade experts call these restrictions ________________.
A) monetary tariffs
B) countertrade policies
C) nontariff barriers
D) export constraint policies
Free
Multiple Choice
Q 311Q 311
The purpose of the General Agreement on Tariffs and Trade (GATT) is to:
A) facilitate global trade.
B) create common market arrangements in specific geographical regions.
C) negotiate an end to civil wars.
D) establish a set of international property right laws.
Free
Multiple Choice
Q 312Q 312
The __________ represents the first attempt to establish a truly global mediation center to resolve international trade disputes.
A) International Trade Court
B) World Trade Organization
C) Global Trade Commission
D) United Nations Arbitration Center
Free
Multiple Choice
Q 313Q 313
With GDP totaling more than $624 billion, the common market known as COMESCA is:
A) a subset of the Mercosur trading bloc.
B) a subset of the European Union.
C) composed of Southern African and Eastern African nations.
D) composed of Ecuador, San Simeon, Chile, and Argentina.
Free
Multiple Choice
Q 314Q 314
The European Union created a single monetary unit to replace the national currencies of 12 member nations. This common currency is known as the:
A) e-dollar.
B) pound.
C) mercosur.
D) euro.
Free
Multiple Choice
Q 315Q 315
The three countries participating in NAFTA are:
A) Canada, Panama, and the United States.
B) Mexico, Panama, and the United States.
C) Canada, Nicaragua, and Mexico.
D) Canada, Mexico, and the United States.
Free
Multiple Choice
Q 316Q 316
The common market arrangement that groups Brazil, Argentina, Paraguay, Uruguay, Chile, and Bolivia is called the:
A) South American Six.
B) World Trade Organization (WTO).
C) Latin Free Trade Zone.
D) Mercosur.
Free
Multiple Choice
Q 317Q 317
Another name for a common market is:
A) FTA.
B) trading bloc.
C) continental community.
D) economic cooperative.
Free
Multiple Choice
Q 318Q 318
Traders in the 18th century were encouraged to focus on selling their nation's goods in the global market to create a favorable balance of trade. Nations attempted to sell more goods to other nations than they bought from other nations. This approach to global trading is called:
A) ethnocentrism.
B) mercantilism.
C) protectionism.
D) isolationism.
Free
Multiple Choice
Q 319Q 319
The impetus behind trade protectionism is:
A) to limit accelerated growth of GDP that would cause inflation to escalate.
B) to facilitate the belief that it will keep one's nation disease free.
C) to increase the positive economic consequences of one's trade position.
D) solely for the protection of nuclear attack.
Free
Multiple Choice
Q 320Q 320
Although embargos are enacted upon both imports and exports, this form of trade protectionism is often the result of:
A) physical and environmental limitations on trade.
B) nontariff barriers.
C) currency fluctuations.
D) political disagreements between nations.
Free
Multiple Choice
Q 321Q 321
The benefits of protective tariffs are:
A) they increase the revenues of the government that has implemented them.
B) they decrease the cost of the product to the consumer (end-user).
C) they help develop friendlier trade relations with loyal trading partners. Both parties are protected.
D) they protect domestic jobs by encouraging cost-sensitive consumers to purchase domestic products.
Free
Multiple Choice
Q 322Q 322
The U.S. government continues to be committed to free-trade agreements, as evidenced by the more recent passage of CAFTA. The future goal of U.S. free-trade advocates is:
A) to make South and Central American nations the textile hubs of the world, while the U.S. focuses on the advancement of services.
B) a large free-trade area that would include all nations of South and North America.
C) unmonitored free trade across all international borders.
D) standardized import quotas among participating nations.
Free
Multiple Choice
Q 323Q 323
U.S. firms that produce sophisticated military hardware are prohibited from exporting that equipment to "unfriendly" governments, such as Iran. This complete ban on exporting sensitive technology to specific countries is an example of a(n):
A) import quota.
B) boycott.
C) tariff.
D) embargo.
Free
Multiple Choice
Q 324Q 324
The U.S. and China continue to spar over sociocultural issues, such as human rights, and economic and financial issues, such as the value of the Chinese yuan against the U.S. dollar. U.S. diplomats assert that these differences continue to bolster China's favorable balance of trade and increase the U.S. trade deficit. The trade protectionist policy exhibited by the Chinese is similar to an economic policy known as ____________ that was followed during the 17th and 18th centuries. This policy resulted in a flow of money to the country that sold the most globally.
A) trade embargoing
B) countertrading
C) profiteering
D) mercantilism
Free
Multiple Choice
Q 325Q 325
The U.S. government has announced a 5-million-pound annual limit on beef imported from Argentina. This type of trade restriction is called a(n):
A) embargo.
B) revenue tariff.
C) import quota.
D) export cap.
Free
Multiple Choice
Q 326Q 326
Denmark requires foreign companies that sell butter in Denmark to sell it in cubes, not tubs. This type of requirement is known as a:
A) protective tariff.
B) revenue tariff.
C) quota.
D) nontariff barrier.
Free
Multiple Choice
Q 327Q 327
Responding to pressure from political lobbyists representing the U.S. steel industry, the U.S. government levies a tax on steel products imported from Europe. This is an example of a(n):
A) protective tariff.
B) revenue tariff.
C) quota.
D) embargo.
Free
Multiple Choice
Q 328Q 328
Labor unions and businesses in the heavy equipment industry have asked the U.S. Congress to place a tax on imported equipment in order to make it more expensive. They hope that this will allow U.S. producers to be more competitive. The U.S. heavy equipment industry appears to be seeking a(n):
A) injunction.
B) revenue tariff.
C) nontariff barrier.
D) protective tariff.
Free
Multiple Choice
Q 329Q 329
Having recently found sources of oil on their own land, the infant nation of Lancerland enacted a tariff on imported petroleum in order to raise money for their new government. This trade restriction is an example of a(n) ________ tariff.
A) revenue
B) protective
C) percentage
D) fixed
Free
Multiple Choice
Q 330Q 330
Norvada is a small nation that has followed protectionist policies for many years. Which of the following would be an example of a nontariff barrier established by Norvada?
A) Establishment of a tax levied on imported goods so that foreign products are more expensive than competing domestic goods.
B) Establishment of a tax levied on imported goods designed primarily to raise money for the government.
C) Establishment of restrictive quality standards requiring foreign firms to make expensive modifications to their products before they can be exported to Norvada.
D) Participation in the Uruguay Round of GATT negotiations.
Free
Multiple Choice
Q 331Q 331
A small Italian grocery store sells five varieties of feta cheese. It offers Bulgarian, French, Danish, Greek, and one that is processed and sold from Tillamook, Oregon. The domestic variety sells for $1.99/pound, while all the others sell for more than $2.99/pound, and the Greek variety is priced at $6.99/pound. The domestic variety is much cheaper because:
A) customers always perceive the domestic varieties to be of lower quality than the imported varieties.
B) the value of the dollar never favors imported goods.
C) imported cheese producers often pay protective tariffs on these goods, which ultimately raises the price at the grocery store.
D) the distributors of these imports refuse to buy the cheese in large enough quantities to enjoy economies of scale.
Free
Multiple Choice
Q 332Q 332
A major concern voiced by U.S. critics of the North American Free Trade Agreement (NAFTA) was that it would result in:
A) higher prices for consumer goods.
B) loss of jobs in the U.S. economy.
C) national security problems.
D) increased illegal immigration from Mexico.
Free
Multiple Choice
Q 333Q 333
One objective of NAFTA is:
A) increase trade barriers between the countries involved.
B) decrease investment opportunities in the countries involved.
C) promote conditions of fair competition for the three trading partners.
D) improve working conditions in Central America.
Free
Multiple Choice
Q 334Q 334
France, Italy, Denmark, and Luxembourg are all members of the EU. Which of the following statements is an accurate description of trade between these nations?
A) France and Italy are permitted to engage in free trade due to their proximity to each other, however, Luxembourg only has free trade with Belgium, and Denmark only has free trade with Switzerland, Sweden, and Germany.
B) The EU has abolished customs duties at internal borders for these and other member nations and put in place a uniform system for taxing imports. Internal border controls subsequently disappeared.
C) Customs officers that collect tariffs are now found at the internal borders of all EU member nations.
D) France, Italy, Denmark, and Luxembourg are four nations strongly considering abandoning the EU common market. The global trading bloc has proved inefficient in these nations' attracting global business.
Free
Multiple Choice
Q 335Q 335
The outlook for growth in global trade appears to be:
A) less optimistic than in the past.
B) more interesting yet more challenging every day.
C) unclear and lacking focus.
D) nonexistent.
Free
Multiple Choice
Q 336Q 336
Global trade with China is:
A) too risky and not worth the effort.
B) illegal based on World Trade Organization (WTO) rulings.
C) an emerging business opportunity for several companies.
D) dependent upon the success of multinational corporations.
Free
Multiple Choice
Q 337Q 337
Many business experts contend that __________ will likely be the growth market of the future.
A) Asia
B) Africa
C) South America
D) the Middle East
Free
Multiple Choice
Q 338Q 338
The "second wave" of offshore outsourcing refers to:
A) moving jobs to South America in addition to China.
B) moving skilled service jobs such as those in accounting offshore.
C) moving jobs to India in addition to China.
D) moving manufacturing jobs offshore.
Free
Multiple Choice
Q 339Q 339
When U.S. firms choose to hire skilled and unskilled workers in other countries to produce goods and services, rather than producing them in the United States, we refer to this as __________.
A) offshore procurement
B) domestic outsourcing
C) foreign distribution
D) offshore outsourcing
Free
Multiple Choice
Q 340Q 340
As students think about a career in the business world today, which of the following is a good strategic suggestion?
A) Study a foreign language.
B) Secure a job with a large multinational corporation.
C) Stay away from franchising due to the saturation of this form of business globally.
D) Avoid spending a lot of time studying fluctuations in currencies because a global currency is imminent.
Free
Multiple Choice
Q 341Q 341
Which of the following nations has joined the U.S., Japan, and the EU as a key driver of the world economy?
A) Thailand
B) Brazil
C) Russia
D) China
Free
Multiple Choice
Q 342Q 342
Trade experts' concerns about trading with China include:
A) its small population size compared to other nations, which puts doubt in businesspeople's minds about the worthiness of the investment.
B) its political system, counterfeiting activities, and human rights abuses.
C) its ties with organized labor unions.
D) its economic philosophy that has changed from free market to command economy.
Free
Multiple Choice
Q 343Q 343
Although it has experienced persistent social unrest, multinationals have shown interest in Russia due to:
A) its cultural compatibility to the West.
B) the consistent strength of its currency compared to U.S. and Japanese currencies.
C) the size of its natural resources.
D) its current abolishment of religious freedom.
Free
Multiple Choice
Q 344Q 344
Which of the following is an advantage of offshore outsourcing?
A) Companies can create efficiencies by hiring low-wage employees.
B) Wages increase in the home country.
C) Product quality improves permitting firms to charge more for their products.
D) Communication between the company and its customers improves.
Free
Multiple Choice
Q 345Q 345
Which of the following statements is a good prediction of future occurrences in global markets?
A) Fortunately, safety issues will become less of a concern as developing nations begin to participate in global trade at a faster pace.
B) It is doubtful that service and technical jobs such as accounting, legal representation, or financial management will become part of offshore outsourcing.
C) China will continue to be the only viable global trader in Asia for several years to come.
D) With the strong growth in technical talent globally, offshore outsourcing should continue to increase.
Free
Multiple Choice
Q 346Q 346
As surgical procedures become extremely costly (upwards of $100,000 per surgery), which of the following health benefits strategies is being considered, if not implemented, by American companies? According to the Making Ethical Decisions box:
A) U.S. companies are asking employees to seek out foreign medical students who are trained in the U.S. and willing to perform surgeries at a discount price.
B) U.S. companies are asking employees to choose between taking a trip abroad or proceeding with expensive surgical procedures. The company is willing to pay for a trip, which may cost about $10,000, rather than a surgery, which may cost $100,000.
C) Patients who elect to have surgeries performed abroad are finding the quality of these surgeries to be sub-standard compared to the quality and care they receive in the U.S. The lesson is to think twice about a company whose benefits prescribe that you have your surgeries abroad.
D) U.S. companies are willing to pay for surgical procedures performed in nations such as Mexico, South Korea, and Thailand, as opposed to the same procedure in the U.S. The difference in cost is significant, and the expertise and accommodations are similar if not better.
Free
Multiple Choice
Q 347Q 347
Jill works as a flight attendant for an international airline. While in China, it is convenient for Jill to find look-alikes in famous brands of watches, purses, clothing, and golf clubs. In fact, she does her Christmas shopping there and even buys good quality items for auctioning at her son's pre-school events back in the U.S. Jill's actions:
A) demonstrate a continual problem with product piracy in China.
B) demonstrate how expensive it is to trade with China. Persons who travel there are really the only ones who can benefit from China trade.
C) demonstrate the low level of economic development in China, and the fact that only tourists can afford to purchase name brand goods in that nation.
D) demonstrate the World Trade Organization's encouragement of China to increase its production of counterfeit goods because there is a high demand for these globally.
Free
Multiple Choice
Q 348Q 348
Explain and provide examples of the difference between comparative and absolute advantage in global markets.
Free
Essay
Free
Essay
Q 350Q 350
Explain and provide at least one example of how socio-cultural differences can create trade difficulties in world markets.
Free
Essay
Q 351Q 351
Explain and provide at least one example of how legal and regulatory forces impede global trade.
Free
Essay
Free
Essay
Q 353Q 353
Mini-Case
Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contacts, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames.
A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"!
-Initially, Rhett believed he should maintain his production facilities within the United States and simply export his designer eyeglass frames to foreign sellers. However, he lacked expertise in exporting. Rhett decided to see if the federal government could provide any help by contacting a(n):
A) World Trade Center.
B) Export Assistance Center.
C) Federal Reserve Bank.
D) U.S. Export Savings Bank.
Free
Multiple Choice
Q 354Q 354
Mini-Case
Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contacts, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames.
A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"!
-Although he is confident of success, Rhett is concerned that social, cultural and economic differences in other nations may create some problems. He believes he should adapt his approach to these differences rather than trying to force the "American way" on foreign consumers. Rhett's attitude suggests that he wants to avoid a(n) ___________ approach to business.
A) ethnocentric
B) flexible
C) ethical
D) countercultural
Free
Multiple Choice
Q 355Q 355
Mini-Case
Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contacts, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames.
A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"!
-Rhett heard predictions that the value of the U.S. dollar is likely to decline substantially over the next six months. This should:
A) hurt his overseas efforts since his prices will be very high.
B) stop overseas efforts because dollars will not be negotiable.
C) help his overseas efforts since his prices will be lower.
D) force him into accepting no other currency except the dollar.
Free
Multiple Choice
Q 356Q 356
Mini-Case
Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contacts, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames.
A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"!
-Rhett spoke with a Korean company that said it might be interested in producing his products in their market. They would pay him a royalty for what they sold and would bear all the start-up expenses of this effort. This Korean company is proposing a:
A) subsidiary agreement.
B) joint venture.
C) export trading company.
D) licensing agreement.
Free
Multiple Choice
Q 357Q 357
Mini-Case
Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contacts, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames.
A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"!
-The company was informed by the Japanese Ministry of Trade that they could only export 1.5 million pairs of eyeglasses to the Japanese market during a given year. The Japanese have imposed a(n):
A) revenue tariff.
B) embargo.
C) import quota.
D) limit order.
Free
Multiple Choice
Q 358Q 358
Mini-Case
Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contacts, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames.
A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"!
-Next year, in order to cut both time and cost in getting new styles to global markets, Rhett plans to _________________ a few lines. Rhett will send his designs to manufacturers in Saipan, Bangladesh, and Turkey who will produce the eyeglasses in facilities in their respective countries. This will not only reduce the cost of labor, it will help Rhett reach regional markets in a timely manner.
A) license
B) contract manufacture
C) franchise
D) subsidize
Free
Multiple Choice