Chapter 3

What are some of the current business opportunities in the world economy?

Underdeveloped nations can leapfrog technologies by eliminating unnecessary steps in the chain of development

As producers of sophisticated military hardware, companies like Boeing and General Dynamics are restricted from exporting to governments such as Cuba and North Korea. This total ban on exporting of sophisticated technology is an example of a(n) a) embargo. b) nontariff trade barrier. c) tariff trade barrier. d) voluntary export restraints.

embargo

Foreign________ involves a firm buying the rights to produce, promote, and use the domestic firm's trademark/patents in a defines geographical area as long as there is an agreement on specific operating procedures.

licensing

A measure of the total flow of money into or out of a country is called

balance of payments

Cell phone penetration is skyrocketing in many developing nations. Which of the following developing nations decided to forgo the conventional phone service of landlines by moving directly to cell phone networks? a) Japan b) Europe c) United States d) Africa

Africa

Am embargo is a limitation on the price of products that one nation can export to another nation.

False

Barter opportunities tend to increase during economic upsurges.

False

One drawback of global trade is that it increases the risk to firms who must do business in many different countries.

False

Quality control forms a key risk of exporting

False

The most attractive foreign opportunities for American firms are found in the nations of Indonesia and Japan.

False

______ refers to a country's physical facilities that support economic activity.

Infrastructure

A review of the recent experience of the US economy in the global markets reveals that the US has

NOT: maintained a trade surplus with all nations except China

Ross has two different projects he would like to work on this weekend; he wants to paint the spare bedroom or perform some minor repairs on his old '83 Chevy. Unfortunately, he doesn't have time to do both this weekend. The fact that Ross must give up one thing in order to do something else illustrates the concept of

NOT:the hierachy of needs

A country has an absolute advantage when it can produce more of a good than other nations, using the same amount of resources.

True

Foreign liscensing and franchising is one way to engage small business in global competition.

True

The balance of trade includes the value of services as well as the value of goods.

True

When the total value of imports is higher than the total value of exports, the country experiences a trade deficit.

True

The ________ influences the global economy by providing technical advice to the governments of developing countries for projects in a range of areas including infrastructure and education.

World Bank

Apple has used foreign outsourcing to produce its iPhone. The main advantage of foreign outsourcing is

lower production cost

What was the predicted result of NAFTA?

significant job loss for the U.S. economy

Dash of Style, a leather products company in the US imported leather goods worth 10k from China. When the consignment reached the US the company had to pay a(n) _______ on the imports.

tariff

Trading blocs are groups of countries:

that have reduced or eliminated tariffs allowing for a free flow of goods among member nations

Which of the following is the world's largest common market?

the EU

When comparing a nation's balance of trade with its balance of payments, it is important to realize that:

the balance of payments includes the balance of trade, bu it also includes other financial flows such as foreign borrowing and lending.

International trade can offer companies an invaluable source of new ideas

true