Chapter 3 Business Quiz

An argument in favor of protective tariffs is the "infant-industry argument," which states that.

infant-industries should be protected by tariffs established foreign competition

______refers to sending work function to another country resulting in domestic workers losing their jobs

outsourcing

A company that has a global vision

recognizes and reacts to international business opportunities

The _____ is the total amount of money that flows in and out of a country.

balance of payments

The ____ is an agreement that dramatically lowered trade barriers worldwide and created the new World Trade Organization

Uruguay Round

The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries

World Bank

What are the benefits associated with free trade and globalization

an open economy that spurs innovation

A German law that prohibited the use of hops grown outside of the country in the production of German-made beer was overturned in the late 1980s. This law was an example of a(n):

buy-national regulation

A domestic firm may decide to contract for the production of its goods by an established foreign manufacturer. Such private-label manufacturing by a foreign company is called.

contract manufacturing

The Sara Lee Company sells the Hanes brand of hosiery in the United States. The manufacturer of this hosiery brand in Great Britain sells it under the brand name of Pretty Polly. The Sara Lee Company is using _____ to broaden its global marketing base without investing in overseas plants and equipment.

contract manufacturing

A ___ is a form of trading arrangement in which part or all the payment for purchased poods is in the form of other goods and services

countertrade

Laws relating to the alcoholic content of beer have required many imported brands of beer to be labeled malt liquor when it is sold in the United States. In addition, all beer sold in the U.S. must contain an expiration date or a "best-buy" date. These laws have made it difficult for small foreign breweries to enter the U.S. market. These laws are an example of:

customs regulations

The japanese auto moble manufacturer Mazda produces the Premacy SUV in Haikou China at a plant built in the Chinese province. Mazda is using ________ to engage in global trading.

direct foreign investment

Which of the following is an example of a natural trade barrier?

distance

in 1914, the United States prohibited the importation of Mexican avocados even though Mexico is the world's largest producer of the fruit. The prohibition remained in effect until 1996. The ban on importing Mexican avocados is an example of

embargo

Singapore has granted a ________ on the importation of beer and stout made in the Philippines. This means that beer and stout made in the PHilippines can sell for less in Singapore than beer and stout made by New Zealand or the US

preferential tariff

The European Union (EU) bans the importation of hormone-fed U.S. beef and bioengineered corn and soybeans on safety grounds although Americans eat this food every day. This ban is so consumers in the EU will buy domestic beef and products made from domestically produced corn and soybeans. This ban is an example of:

protectionism

The ____ is an international bank that normally provides short-term loans to countries that sr unable to meet their budgetary expenses.

International Monetary Funds

______are laws that require a company earning foreign currency from its exports to sell the foreign currency to a control agency, usually a central bank.

exchange controls

Botswana produces diamonds, copper, nicket, soda ash, meat, and textiles, which it sells to the member of the European Union. To Botswana, the diamonds, copper, nicket, soda ash, meat, and textiles it produces are examples of

export

The least costly and least risky method for selling a product on the global market is

exporting

When sales of cheese in the United States began to stagnate, the U.S. dairy industry looked for a quick and easy method to reach global markets. From your understanding of how companies participate in the global marketplace, you should know that the dairy industry selected:

exporting

_____ are good and service that are made in one country and sold to other countries

exports

A country that exports more goods than it imports is said to have a

favorable balance of trade

a preferential tariff

gives tariff advantages to one country over others

Imagine you are trying to gather the information needed to calculate the balance of payments for and Eastern European country. TO do your calculations, you would need to have information on all the following except

it corporate taxes

At&t entered into a ____ with Compangnie General d'Electricite, a French company. The French company brings its patents on digital telephone swities, and At&T provides the marketing know-how to the relationship.

joint venture

Capital Radio PLC, the United Kingdom's biggest commercial radio firm announced in 2002 that it would cooperate with Walt Disney Co. to create a radio network for children under the age of 16. The company will broadcast to a potential audience of 25 million under the name Capital Disney. This new radio network will be created as the result of:

joint venture

The Ford Motor Company has investing $6 billion to build a "world car," the midsize Mondeo. The car was designed in the US, Germany, and The United Kingdom to be adaptable to any market in the world. Ford is a _________ company

multinational

Besides tariffs, a government can use a number of other tools to restrict trade. Which of the following is NOT a tool aimed at restricting trade.

subsidy