Chapt 3

A(n)_______buys goods in one country and sells them to buyers in another country.

trading company

A country whose consumers are less likely to purchase nonessential products because they have a low per-capita income is considered to be a

less-developed country

Less developed countries are characterized by a

low per-capita income

APEC

which was established in 1989, promotes open trade and economic and technical cooperation among 21 member nations and represents approximately 47% of world trade, and 60% of world GDP.

The_____was established by the world's industrialized nations in 1946 to loan money to underdeveloped and developing countries.

world bank

absolute advantage

Assume that Indonesia is the only country that can produce tapestry fabrics. If this were true, then Indonesia would have a(n) ______related to the production of these fabrics

Eventually, the EU plans to eliminate all trade barriers between

EU member nations

The advantage that exists when a country has a monopoly on producing a specific product is called

absolute advantage

International business

refers to the buying, selling, and trading of goods and services across national boundaries.

Tariff

A country may attempt to protect its own domestic industries by imposing a(n) _____, a type of tax, on imported products.

Which trade alliance, established in 1967, promotes trade and economic integration among ten member nations in Southeast Asia?

ASEAN

What are two ways ASEAN differs from the EU?

ASEAN does not have fully free labor flows between member nations. ASEAN does not have a common currency.

Which unit of the U.S. Department of Commerce offers small and mid-sized U.S. firms practical knowledge about international markets and industries?

Commercial Service

Simpson's Window Coverings, based in Chicago, hired a company in Taiwan to sew all of the window treatments for 15 hotels that Simpson contracted with. The company in Taiwan also includes a label indicating the Simpson name. What is this an example of?

Contract manufacturing-foreign

To meet growing global demand for pineapples, Hawaiian producers of pineapples have increased sales outside of the United States in recent years.

EXPORTING

The North American Free Trade Agreement went into effect in 1994 and effectively merged Canada, the United States, and Mexico into one market by implementing what three measures?

Eliminating virtually all tariffs on good produced and traded among the three member nations, Providing intellectual property protections, Making it easier for businesses to invest in the other member countries

Which trade agreement, originally signed by 23 nations in 1947, provides a forum for tariff negotiations and a place where international trade problems can be discussed and resolved?

General Agreement on Tariffs and Trade (GATT)

Which scenario is an example of importing?

Hewlett-Packard buys computer parts from suppliers in Asia to build its laptops.

When Casey went to work at the corporate offices of Simpson Department Stores, he soon realized that 60% of the clothing the company bought to sell in the stores wasn't even made in the United States but was shipped to them from other countries. What process does Simpson Department Store use to bring this clothing to their stores?

Importing

body language

In the 1970s, during a visit to Brazil, President Richard Nixon gave the A-OK sign to the crowd. This hand gesture in America means OK, however, Brazilians were embarrassed because in their culture the gesture is considered obscene. This situation exemplifies how even simple differences in________can cause misunderstandings in international relationships

Which organization is considered the closest thing the world has to an international central bank?

International Monetary Fund

What is one way that APEC differs from other international trade allowances?

It allows the business/private sector to participate in a wide range of APEC activities.

Smaller firms based in the United States can learn more about international business opportunities from the work done by CIBERs which are located at

Leading business schools in the United States.

What type of trade agreement involves one company that allows another company to use its company name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a fee or royalty?

Licensing

What strategy is a company using when it customizes its products, promotion, and distribution to fit cultural, technological, and other national differences?

Multinational

Ratification of which agreement in 1994 created a free trade area among the United States, Mexico, and Canada?

NAFTA

Nelson Manufacturing, based in Cleveland, decided to relocate the process of installing component parts to Mexico. It made this decision to take advantage of lower wage rates. Nelson Manufacturing still retains control of the process because it is not subcontracting the work to another company. What is this an example of?

Offshoring

What term describes the situation when an American firm transfers manufacturing and other tasks to companies in countries where labor costs are less expensive?

Outsourcing

What are two long-term goals of the European Union (EU)?

Stimulate economic growth, Improve the economic efficiency of the EU nations

Which organization was established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation?

The International Monetary Fund

International Spaces, Inc. handles all the activities required to move a company's products from one country to another. They act as consultants, handle all marketing and advertising, conduct product research and design, and provide warehousing. What type of company is International Spaces, Inc?

Trading company

Which organization, established in 1946, primarily serves to loan funds to underdeveloped and developing nations, where the funds are used to finance projects ranging from road and factory construction to the building of medical and educational facilities?

WORLD BANK

For the United States, importing involves the purchase of goods and services from foreign sources while exporting involves selling goods and services to foreign markets

balance of trade

The total value of a nation's exports compared to its imports measured over a particular period is the definition of

balance of trade

Nonverbal, usually unconscious communication through gestures, posture, and facial expression is referred to as

body language

Companies that want to retain control and are willing to invest resources in international business will consider_____which is he ownership of OVERSEAS facilities

direct investment

An American denim company hires a foreign firm to cut, sew, and finish the company's jeans before putting the American company's brand name on the product. This is an example of

contract manufacturing

When Lowe's builds its home improvement stores in Australia and other countries, this level of international business is called

direct investment

The Uruguay Round of GATT negotiations, provided new rules to prevent

dumping

Major League Baseball enters into an agreement with a Canadian clothing company allowing it to sell its clothing with the MLB logo.

example of a licensing agreement.

An American auto manufacturer invests in building a factory in Sweden and moves its manufacturing operations to that country.

example of direct investment

To meet growing global demand for almonds, American producers of almonds have increased sales outside of the United States in recent years

exporting

The buying, selling, and trading of goods and services across national boundaries is referred to as

international business

Offshoring

is defined as the relocation of business processes by a company or subsidiary to another country.

A company that lacks sufficient resources to operate in another country may choose to form a(n)________by finding a local partner to share the costs and operation of the business.

joint venture

Tariffs and other trade restrictions are part of a country's_____structure but may be established or removed for political reasons.

legal

When the NBA formed an agreement with Adidas to allow Adidas to be the official apparel provider of the NBA, it entered into what type of arrangement?

licensing

When an international company customizes its product, promotion, and distribution according to cultural, technological, regional, and national differences, it is using a

multinational strategy

Many American firms______manufacturing or other tasks to countries where labor and supplies are less expensive.

outsource

The Uruguay Round of GATT negotiations, provided new rules to

prevent dumping

The Association of Southeast Asian Nations (ASEAN)

promotes trade and economic integration among member nations in Southeast Asia.

nation's balance of trade

refers to the difference in value between imports and exports.

outsource

supplies less expensive

A country may attempt to protect its own domestic industries by imposing a(n)____a type of tax, on imported products.

tariff

Advances in the development of computers, cell phones, and access to broadband Internet in developing countries are examples of______advances that are creating global marketing opportunities.

technology

joint venture

the sharing of the costs and operation of a business between a foreign company and a local partner.