Chapter 3: The Global Marketplace

France and Germany rely on a legal system known as ________, in which legal parameters are specified in detailed legal codes.

Civil

Legal systems in Great Britain and the United States are based on ________ law.

Common

________ is the tendency to judge all other groups according to standards, behaviors, and customs that prevail in one's own group.

Ethnocentrism

Which of the following is one of the least risky forms of international business activity?

Exporting

Which of the following arguments supports the idea of free trade?

International trade must take place without any interference

________ agreements entitle one company to use some or all of another firm's intellectual property in exchange for a royalty payment.

Licensing

In the ________ strategy, a company creates highly independent operating units in each new country and gives local managers a great deal of freedom to run their operations almost as though they are independent companies.

Multidomestic

Theocratic law is found in Iran and Pakistan and is based on ________.

Religious principles

________ refers to assigning a wide range of generalized attributes to an individual based on membership in a particular culture or social group.

Stereotyping

Which of the following is essential when determining product design and branding for an international market?

Understanding of culture and regulation

When the U.S. dollar is strong, U.S. exports will likely ________.

cost more in other countries

In a ________ strategy, managerial control is highly centralized and major decisions for the company's international operations are made at the company's headquarters in the home country.

global

Which of the following is an objective of protectionism?

guarding specific industries in a nation

Dumping ________.

involves selling a product at a price lower than the cost of production

Which of the following is a principle that governs the world trade organization's work?

making trade policies more predictable and less arbitrary

A company benefits from economies of scale when it ________.

manufactures and distributes products in higher quantities

When considering how to market a product internationally, what can be used to ensure the exact same product is sold everywhere around the world?

standardization

Taxes, surcharges, or duties levied against imported goods are known as ________.

tariffs

International companies can use ________ to shield some of their income from higher tax rates in their own countries.

tax havens

Where is the world's largest economy?

the European Union

Which of the following has been created to promote trade within an area by creating uniform barriers against nonmember countries?

trading blocs

A country has a trade surplus when the ________.

value of its exports exceeds the value of its imports

________ limit the amount of particular goods that countries allow to be imported during a given year.

Import quotas

The ability to cover all costs of customization while offering competitive prices in an international market should be considered in which functional strategy category?

Pricing

Which of the following has made the rapid growth in global business possible by making it safer, easier, and more profitable?

advances in communication and transportation technologies