Chapter 3 Quizes

Juan purchases a snack from Target. Upon inspection, he sees the snack is produced and sold by a Japanese company. This means the snack is a What kind of good?

imported

In industries where international competition is so fierce and the costs of competing on a global basis are so high that only a few firms have the resources to do it alone, a company may collaborate with other companies to form a

strategic alliance

A country has an extensive network of railroads and highways. Additionally, the country has strategically located ports in all of its major coastal cities. These all support its superior commercial distribution systems which support its economic activities. This means the country has a strong

infrastructure

A certain country has a low per-capita income and is not economically advanced. This country would be considered a ?

less developed country

A certain country has low per-capita income and is not economically advanced. This country would be considered a

less-developed country.

A small business owner wants to sell clothing featuring the logo of the university she attended. The university allows for her to use its name, brands, and trademarks in exchange for a fee or royalty. What is this an example of?

licensing

Nestle, with headquarters in Switzerland, operates more than 400 factories around the world and receives revenues from Europe, North, Centra, and South America; Africa; and Asia. Nestle is an example of a

multinational corporation

The US sells wine to China. From the perspective of the US this is called

exporting

The WTO agreements were rejected by most of the world's trading nations. T or F

False

Which of the following is one of the possible results of trade deficits? 1. the loss of jobs 2. the import of more products 3. the success of business 4. higher standard of living 5. the export of more services

1

A web development firm subcontracts developers in India to supplement its US staff because it is less expensive than hiring in the US. This is an example of offshoring. T or F

False

Cultural differences, such as variations in body language and personal space, usually have an almost negligible impact on international business. T or F

False

LDCs are characterized by high per-capital income. T or F

False

Which member of the EU decided to leave the trade bloc?

The UK

A sock company decides to use global strategy in the US, Mexico, Japan, and France. Even though the company's products are standardized, its advertisements will likely need to adapt to local cultures. T or F

True

A strategic alliance is a partnership formed to create a competitive advantage on a worldwide basis. T or F

True

An indie soda company wants to enter the international marketplace without investing large sums of money abroad. A good option for the company is licensing. T or F

True

Political unrest in countries often creates a hostile environment for foreign businesses and can act as a barrier to international trade. T or F

True

OPEC is an example of a

cartel

Switzerland's central bank increased the value of its currency in relation to other currencies. This is called ?

revaluation

Which of the following is likely to be a reason for some US companies to bring their outsourced production processes back to the US? 1. high cost of transporting products to the home country 2. increase in labor turnover rates in the US 3. increasing labor unionization in the US 4. increased gov't regulation of business in the US 5. increasingly strict enforcement of intellectual property rights in Asian countries.

1

Why has outsourcing become a controversial practice in the United States? 1. Many jobs have moved overseas where certain tasks can be accomplished for lower costs. 2. The outsourced products end up having sub-standard quality because their producers lack expertise. 3. delegation of several processes leaves the outsourcing company with much less time to concentrate on its core business processes. 4. outsourcing empowers the outsourcing company with more managerial control 5. the losses incurred out of the hidden costs of outsourcing are making companies go bankrupt.

1

What type of company benefits the most from licensing? 1. a large manufacturer that wants to transform a less-known brand into a well-known brand internationally. 2. a small manufacturer that wants to launch a well-known brand internationally 3. a small manufacturer that wants to launch a new brand internationally 4. a small manufacturer that wants to launch a well-known brand locally 5. a large manufacturer that wants to launch a new brand internationally.

2

The usefulness of the IMF for developed countries is limited because 1. The IMF was forced to decrease its funding to emerging economies 2. these countries rely extensively on the public market 3. these countries use private markets as a major source of capital 4. the IMF does not aid countries with balance-of-payment deficits 5. the IMF does not provide short-term loans

3

Which is true about less-developed countries? 1. LDCs are characterized by high per-capita income. 2. Businesses should not invest in LDC's because they are not profitable. 3. LDCs represent a potentially huge and profitable market for many businesses. 4. Many countries in Europe are LDCs 5. In LDCs, consumers tend to purchase more nonessential products.

3

Which of the following is one of the possible results of trade deficits? 1. the success of business 2. a higher standard of living 3. the loss of jobs 4. the export of more services 5. the import of more products

3

Which of the following is true regarding trading companies? 1. they rarely offer warehousing facilities 2. they refrain from handling consulting activities 3. they handle all activities required to move products from one country to another. 4. they buy and sell goods in only one country 5. they are very different from export agents.

3

Which of the following statements is true about dumping? 1. dumping occurs when a business sells products at much more than what it costs to produce them. 2. dumping occurs when the country of origin has products with the latest technology that are in high demand in overseas markets. 3. dumping permits quick entry into a market 4. dumping occurs when the domestic market for a firm's product is too big to match the level of production 5. quotas cannot be imposed based on suspicion of dumping unless proven.

3

Offshoring is different from outsourcing because 1. in outsourcing, tasks cannot be transferred to countries where supplies are less expensive. 2. in offshoring, the company subcontracts to a different company 3. in offshoring, a subsidiary cannot relocate a business process to another country. 4. in offshoring the company retains control of the process 5. outsourced jobs cannot be brought back for concerns like foreign workers not adding enough value

4

Which of the following is an international trade alliance between 21 nations with 60 percent of world GDP that promotes open trade and economic and technical cooperation among its member nations? 1. The EU 2. ASEAN 3. NAFTA 4. APEC 5. GATT

4

Which of the following is true about the General Agreement on Tariffs and Trade (GATT)? 1. The most recent round was the Paraguay round. 2. it was originally signed by 27 nations in 1947 3. the Uruguay Round promoted dumping 4. more than 100 nations abided by its rules 5. It sponsored rounds of negotiations aimed at increasing trade restrictions.

4

McDonald's introduces the Karubi Mac in Japan, specifically designed for Japanese consumers. This is an example of a globalization strategy. T or F

False

What is the closest thing the world has to an international central bank?

IMF

The IMF promotes trade among member nations be eliminating trade barriers and fostering financial cooperation. T or F

True

The US imports more from China than it exports to China. This means the US has

a trade deficit

A fixed tariff differs from an ad valorem tariff because an ad valorem tariff is

based on the value of an item

An island country can produce honey more efficiently than it can produce other items, giving it a

comparative advantage

The US, having adopted new technological methods in hydraulic fracturing (fracking), can drill and export gas efficiently. The US has created a What kind of advantage?

comparative advantage

A US cosmetics company released a brightening face powder in a foreign country using fair-skinned models. Activists in the foreign clamied this ad reinforced negative racial stereotypes and called for a boycott against the cosmetics company. This is an example of What kind of barrier?

cultural

The effective translation of product names can be crucial to success in foreign markets because of ?

cultural barriers

Acme Corp. is a US company that produces artificial intelligence products but has quickly outgrown the domestic market. Acme Corp. decides to sell it's products to India at a less than its cost, so it doesn't have to cut production. This process is termed

dumping

To gain market share in the US, Thailand begins selling electric scooters at less than what it costs to produce them. This is an example of ?

dumping

A country announces that foreign beer can no longer be imported. This is known an an

embargo

A cotton candy company agrees to provide another company with its name, logo, methods of operation, advertising, products and other elements in return for a financial commitment and the agreement to conduct business in accordance with its standard of operations. What form of licensing is this?

franchising

A home goods retailer transfers the manufacturing of its products to Vietnam because labor and supplies are less expensive. This is an example of

outsourcing

A sudden change in power can result in a regime that is hostile to foreign investment. This is what kind of barrier?

political

Tiffany & Co learned that in order to sell more jewelry in Japan, it needed more attentive customer service. This is an example of what kind of barrier?

social

The US imports more from China than it exports to China. This means the US has a

trade deficit

Two countries have been in an escalating trade war related to furniture. One country announces a government order to indefinitely prohibit the trade of furniture with the other country. This is known as a

trade embargo