Chpt 9, 15, 16

A _____ has no barriers to trade between member countries, includes a common external trade policy, and allows factors of production to move freely between members. Common Market Customs Union Free Trade Area Bonded market

Common market

The main attraction of a(n) _____ is that it can give a firm a way to finance an export deal when there are no other means available. Counter trade Buyback Counter purchase Offset

Counter trade

Which of the following is a major drawback of engaging in counter trade? Countertrade is not useful when trading with developing nations. Financing is difficult when engaging in a countertrade. It is not attractive to small organizations. Countertrade may involve the exchange of unusable goods.

Counter trade may involve the exchange of unusable goods.

_____ can be used when a government restricts the convertibility of its currency to preserve its foreign exchange reserves so they can be used to service international debt commitments and purchase crucial imports. A buyback Countertrade An offset Switch trading

Countertrade

What is the most enduring free trade area in the world Nafta Efta Asean Mercosur

Efta

Responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws

European Commission

The _____ is primarily a consultative rather than legislative body. European Parliament Court of Justice Council of the European Union European Commission

European Parliament

A(n) _____ can help new exporters identify opportunities and avoid common pitfalls. MITI Export Import Bank In-house trading Department Export Management Company

Export Management Company

_____ is advantageous because it avoids the cost of establishing manufacturing operations in the host country and because it may help a firm achieve experience curve and location economies. Licensing Exporting Franchising A Turnkey Contract

Exporting

A(n) _____ requires a common currency, harmonization of the member countries' tax rates, and a common monetary and fiscal policy. Full Political Union Common Market Economic Union Customs Union

Full Political Union

How does the NAFTA seem to increase the international competitiveness of U.S. and Canadian firms?

It allows them to take advantage of lower labor costs in Mexico

Established the second largest currency zone in the world

Maastricht Treaty

Many observers credit NAFTA with helping create the background for increased political stability in _____. Argentina Brazil Panama Mexico

Mexico

Why doesn't Great Britain use the euro as its national currency?

Would have to relinquish control of its monetary policy to the EU

Once barriers to trade and investment are removed, companies:

may still find it difficult to produce a standardized product for a single multiple-country market.

A political benefit of economic integration is that it

reduces the potential for violent conflict

Firms commonly employ a(n) _____ as third party in international transactions reputable bank stock exchange export management company customs broker

reputable bank

In the modern era, the concept of counter trade arose as a way for the _____ to purchase imports. united states european union asean countries soviet union and the communist states of eastern europe

soviet union and the communist states of eastern europe

A _____ allows for a delay in payment. bill of landing time draft sight draft letter of credit

time draft

When an exporting firm finds that its local agent is also carrying competitors' products, the firm may switch to a _____ to handle local marketing, sales, and service. Wholly owned subsidiary Franchising arrangement turnkey operation licensing agreement

wholly owned subsidiary