MindTap CH 24 B

Microlex, Inc., a U.S. corporation, signs a sales contract with Freres, S.A., a French corporation, in which Microlex agrees to sell Freres $100,000 worth of Microlex products. This is an example of ___ . Dunkin Donuts licenses Nadia to use its trademark, trade name, and recipes to produce and sell donuts in Romania. Payment by Nadia will include a set-up fee, plus a small royalty on all revenues generated in Romania. This type of business arrangement is most likely a(n) ___ . In ___exporting, a U.S. company signs a sales contract with a foreign purchaser that provides for the conditions of shipment and payment for the goods. A U.S. company may establish a specialized marketing organization in a foreign country by appointing a foreign agent or a foreign distributor and this is called ___ exporting. When a U.S. firm wishes to limit its involvement in an international market, it may establish a(n) ___ relationship with a foreign firm. When a foreign country becomes a big market, the U.S. firm may wish to appoint a ___ located in that country. A distribution agreement sets out the terms and conditions of the distributorship, such as price, currency of payment, and ___ of payment.

direct exporting franchise direct indirect agency distributor method

Firms investing in foreign nations run all of the following risks EXCEPT:

excessive profits

Highlight the four ways in which U.S. domestic firms can engage in international business transactions.

exporting their goods establishing foreign production facilities licensing technology to existing foreign companies selling franchise to overseas entities

Quotas

An assigned import limit on goods., Tariffs A tax on imported goods.,

The main reason that U.S. firms establish manufacturing plants abroad is that:

b. in so doing they reduce costs.

When a U.S. firm establishes a wholly owned subsidiary in a foreign country, the parent company usually .

remains in the U.S.

Distribution agreement

A contract between a seller and a distributor of the seller's products setting out the terms and conditions of the distributorship.

Normal trade relations (NTR) status

A status granted through an international treaty by which each member nation must treat other members at least as well as it treats the country that receives its most favorable treatment.

The provision of the U.S. Constitution that provides that "No Tax or Duty shall be laid on Articles exported from any State" is found in .

Article 1, section 9

In addition to NAFTA, Highlight two other important regional trade agreements.

CAFTA-DR KORUS FTA

he international organization charged with the responsibility for eliminating trade barriers including tariffs is . The primary purpose of the North American Free Trade Agreement (NAFTA) is to: The U.S. government decides to charge $10.25 on every Blu-ray player that is imported. This policy:

The WTO eliminate tariffs among the U.S., Canada and Mexico is a legally permitted tariff

Dumping

The selling of goods in a foreign country at a price below the price charged for the same goods in the domestic market.

Export

To sell products to buyers located in other countries

A U.S. firm can expand into international markets through a joint venture.

True

Foreign companies, such as Sony and Nissan, have established U.S. plants to avoid import duties that are imposed on Japanese products entering this country.

True

a. Export quotas. ___ sets export quotas on various items, such as grain being sold abroad. b. Restrictions on technology exports. Under the Export Administration Act of 1979, the flow of technologically ___ products and ___ data can be restricted. c. Incentives and subsidies. The United States (and other nation) also uses ___ and subsidies to ___ exports and thereby aid domestic business.

a. congress b. advanced;technical c.incentive;stimulate