MGT. Chp 5

What term describes the purchase of overseas production and marketing facilities, in which a company may control the facilities outright, or it may be the majority stockholder in the company that controls the facilities? a. International business b. Direct investment c. Joint venture d. Strategic alliance

b. Direct investment

What term describes restrictions on the amount of a particular currency that may be bought or sold? a. Cartel b. Exchange controls. c. Embargo. d. Exchange rate.

b. Exchange controls.

Most businesspeople engaged in international trade underestimate the importance of a. import quotas. b. language barriers. c. social and cultural differences. d. trade barriers.

c. social and cultural differences.

If it wants to reduce the dollars flowing out of the country, the United States can limit the number of garments being imported from China and Vietnam by imposing a. a trade deficit. b. an exchange control. c. an embargo. d. a quota.

d. a quota.

Which of the following refers to a tax levied by a nation on goods bought outside its borders and imported into the country? a. Import tariff b. Exchange rate c. Licensing d. Quota

a. Import tariff

What term describes the physical facilities that support a country's economic activities, such as railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communication systems, and commercial distribution systems? a. Infrastructure b. Joint venture c. Outsourcing d. Strategic alliance

a. Infrastructure

If Peru wants to purchase machine parts from a German company but lacks German marks, it will probably go to which of the following institutions to borrow the marks? a. International Monetary Fund b. The World Bank c. Citigroup Bank d. The International Bank

a. International Monetary Fund

Which of the following refers to the buying, selling, and trading of goods and services across national boundaries? a. International business b. Global business (globalization) c. Importing d. North American Free Trade Agreement (NAFTA)

a. International business

What is meant by contract manufacturing? a. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification b. The buying, selling, and trading of goods and services across national boundaries c. Occurs when a country or business firm sells products at less than what it costs to produce them d. Involves transferring manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive

a. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification

What name is given the transfer of manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive? a. Outsourcing b. Exporting c. Franchising d. Importing

a. Outsourcing

You are the international marketing manager for Brides & Grooms, Inc., a designer and manufacturer of wedding apparel. This year's fashions are featuring white for the entire wedding party. You scheduled this year's Asian kick-off for next Monday in Tokyo, when you discover that white is the Japanese color of mourning. What did you overlook? a. Social and cultural differences b. Asian marketing trends c. Competitors' designs d. Asian fashion taste

a. Social and cultural differences

Which of the following refers to a partnership formed to create competitive advantage on a worldwide basis? a. Strategic alliance b. Cartel c. Embargo d. Joint venture

a. Strategic alliance

What is meant by importing? a. The purchase of goods and services from a foreign source b. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification c. The sale of goods and services to foreign markets d. Involves transferring manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive

a. The purchase of goods and services from a foreign source

When Reebok has some of its athletic shoes produced by a Korean company, but the Reebok name still appears on the shoes, this illustrates a. contract manufacturing. b. licensing. c. direct investment. d. exporting.

a. contract manufacturing.

You are an apple farmer and spokesperson for the American Apple Association. You are faced with severe dumping from apple growers in Transoceania, where apples grow wild and the people pay to pick apples as a form of recreation. To counter this threat, you are going to lobby Congress and the president to a. impose a protective import tariff. b. boycott foreign fruit and produce. c. enact an embargo on exported fruit. d. take legal action on apple importers.

a. impose a protective import tariff.

If companies do research to learn about cultural differences before engaging in trade in a particular country, then problems arising from these cultural differences can be a. minimized b. completely avoided. c. exploited. d. unaffected.

a. minimized

The basic mission of which of the following is to oversee the international monetary system and help ensure stable currencies and exchange rates throughout the world? a. World Bank b. International Monetary Fund (IMF) c. World Trade Organization (WTO) d. Organization of Economic Cooperation and Development (OECD)

b. International Monetary Fund (IMF)

Which of the following characteristics relates to global business (globalization)? a. The buying, selling, and trading of goods and services across national boundaries b. A strategy in which organizations treat the entire world or major regions of it as the domain for conducting business c. Allows selected American firms desiring international trade to form monopolies in order to compete with foreign cartels d. Acquires goods in one country and sells them to buyers in another country

b. A strategy in which organizations treat the entire world or major regions of it as the domain for conducting business

You are the international marketing manager for Checker Burger, Inc., producer of a popular soy burger. There is an excellent market for your burgers in the republic of East Slabovia, a producer of high-quality brandy. The only problem is that East Slaboviar currency is not accepted on the international currency exchange. What can you do to help your trade? a. Appeal to the International Monetary Fund for help. b. Barter burgers for brandy. c. Hire an export agent. d. Trade in a mutually acceptable currency.

b. Barter burgers for brandy.

Which of the following characteristics relates to the North American Free Trade Agreement (NAFTA)? a. Established and supported by the industrialized nations in 1946 to loan money to underdeveloped and developing countries b. Effectively merged Canada, the United States, and Mexico into one market of about 400 million consumers by eliminating most tariffs and trade restrictions on agricultural and manufactured products among the three countries c. A global association of member countries that promotes free trade d. Allows selected American firms desiring international trade to form monopolies in order to compete with foreign cartels

b. Effectively merged Canada, the United States, and Mexico into one market of about 400 million consumers by eliminating most tariffs and trade restrictions on agricultural and manufactured products among the three countries

Which of the following characteristics relates to dumping? a. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification; the final product carries the domestic firm's name b. Occurs when a country or business firm sells products at less than what it costs to produce them c. The ratio at which one nation's currency can be exchanged for another nation's currency or for gold d. Involves transferring manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive

b. Occurs when a country or business firm sells products at less than what it costs to produce them

What name is given to the maximum number of units of a particular product that may be imported into a country? a. Dumping b. Quota c. Cartel d. Exchange controls

b. Quota

What is meant by importing? a. Involves transferring manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive b. The purchase of goods and services from a foreign source c. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification d. The sale of goods and services to foreign markets

b. The purchase of goods and services from a foreign source

What is an embargo? a. The market value of a nation's total output of goods and services for a given period b. The suspension of trade in a particular product by the government c. The buying, selling, and trading of goods and services across national boundaries d. The maximum number of units of a particular product that may be imported into a country

b. The suspension of trade in a particular product by the government

The fact that the American company 3M owns a film-manufacturing facility in Italy is an example of a. a contract manufacturer. b. a direct investment. c. a trading company. d. licensing.

b. a direct investment.

According to the text, a blueprint of acceptable behavior that is passed from one generation to the next is called a. etiquette. b. culture. c. dumping. d. personal space.

b. culture.

The purchase of goods and services from a foreign source defines a. exporting b. importing c. free trade d. countertrade

b. importing

According to Hofstede's cultural dimensions theory, _____ tend to be self-reliant and place a high level of importance on freedom and ambition, while _____ place more value on the team than the individual. a. women; men b. individualists; collectivists c. men; women d. collectivists; individualists

b. individualists; collectivists

When Weseeyu, Inc., of Rochester, New York, sells contact lenses to people in Moscow, Russia, the company a. has an absolute advantage. b. is exporting the lenses. c. is importing the lenses. d. is increasing the trade deficit.

b. is exporting the lenses.

Miller Beer allows a Canadian firm to use its name, formula, and brands in return for a royalty. This arrangement is known as a. exporting. b. licensing. c. direct investment. d. a joint venture.

b. licensing.

What is the World Trade Organization (WTO)? a. Comprised of ten Southeast Asian countries with the goal to promote economic growth and overall progress in the area via trade and security b. An economic and political union of 28 member nations that are located primarily in Europe c. A global association of member countries that promotes free trade d. An international economic organization comprised of 30 countries that accept the basic principles of free-market economies and representative democracy; recommends and promotes policies to improve the well-being of consumers and societies across the world

c. A global association of member countries that promotes free trade

What term describes a group of firms or nations that agree to act as a monopoly and not compete with each other? a. Global business (globalization) b. World Trade Organization (WTO) c. Cartel d. Embargo

c. Cartel

Which of the following characteristics relates to the World Bank? a. Basic mission is to oversee the international monetary system and help ensure stable currencies and exchange rates throughout the world b. A partnership formed to create competitive advantage on a worldwide basis c. Established and supported by the industrialized nations in 1946 to loan money to underdeveloped and developing countries d. A global association of member countries that promotes free trade

c. Established and supported by the industrialized nations in 1946 to loan money to underdeveloped and developing countries

Which of the following characteristics relates to countertrade agreements? a. Involves transferring manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive b. Occurs when a country or business firm sells products at less than what it costs to produce them c. Exporting that involves bartering products for other products instead of for currency d. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification

c. Exporting that involves bartering products for other products instead of for currency

What name is given to a form of licensing in which a company agrees to provide a name, logo, methods of operation, advertising, products, and other elements associated with the company's business, in return for a financial commitment and the agreement to conduct business in accordance with the company's standard of operations? a. Outsourcing b. Exporting c. Franchising d. Licensing

c. Franchising

Which of the following refers to the market value of a nation's total output of goods a. Exchange rate b. Quota c. Gross domestic product (GDP) d. Joint venture

c. Gross domestic product (GDP)

What is meant by contract manufacturing? a. Involves transferring manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive b. Occurs when a country or business firm sells products at less than what it costs to produce them c. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification d. The buying, selling, and trading of goods and services across national boundaries

c. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification

Which of the following refers to the acquisition of goods in one country and the selling of them to buyers in another country? a. Cartel b. Joint venture c. Trading company d. Outsourcing

c. Trading company

Which of the following characteristics relates to a joint venture? a. A tax levied by a nation on goods bought outside its borders and imported into the country b. A strategy in which organizations treat the entire world or major regions of it as the domain for conducting business c. When a company that wants to do business in another country finds a local partner (occasionally, the host nation itself) to share the costs and operation of the business d. Exporting that involves bartering products for other products instead of for currency

c. When a company that wants to do business in another country finds a local partner (occasionally, the host nation itself) to share the costs and operation of the business

The ______ loans money to countries throughout the world for reconstruction and development, and also makes loans to poorer countries for infrastructure and social services purposes. a. Organization of Economic Cooperation and Development b. International Monetary Fund c. World Bank d. Citigroup Bank

c. World Bank

By requiring products to be sold for not less than what it costs to produce them, the United States is attempting to prohibit a. embargoes. b. quotas. c. dumping. d. surpluses.

c. dumping.

Because many countries do not permit foreigners to purchase and operate facilities in their countries, a company wishing to do business in such a country may share the business costs with the host country by forming a a. direct investment. b. contract manufacturing arrangement. c. joint venture. d. sole proprietorship.

c. joint venture.

A corporation that operates in several countries without significant ties to any of them is a a. strategic alliance. b. joint venture. c. multinational. d. cartel.

c. multinational.

You are the executive vice president of Banana Computer, Inc. You have a competitive machine, but your major competitor has the benefit of large-scale production, making its products less expensive to manufacture. In order to remain price-competitive, you send your parts and subassemblies to Mexico for the final stage of assembly, thereby taking advantage of a. direct investment. b. contract manufacturing. c. outsourcing. d. a strategic alliance.

c. outsourcing.

The translation of product names can be a crucial factor in the success or failure of a foreign marketing effort because of a. body language. b. the legal environment. c. sociocultural differences. d. the political environment.

c. sociocultural differences.

What is a multinational corporation (MNC)? a. A partnership formed to create competitive advantage on a worldwide basis b. A company that acquires goods in one country and sells them to buyers in another country c. A company that wants to do business in another country and finds a local partner (occasionally, the host nation itself) to share the costs and operation of the business d. A corporation, such as IBM, ExxonMobil, and Nestlé, that operates on a worldwide scale, without significant ties to any one nation or region

d. A corporation, such as IBM, ExxonMobil, and Nestlé, that operates on a worldwide scale, without significant ties to any one nation or region

What term describes the agreement between ten Southeast Asian countries with the goal to promote economic growth and overall progress in the area via trade and security? a. Southern Common Market b. Southeast Asian Free Trade Agreement c. Organization of Economic Cooperation and Development d. Association of Southeast Asian Nations

d. Association of Southeast Asian Nations

Which of the following refers to an economic and political union of 28 member nations that are located primarily in Europe? a. World Bank b. International Monetary Fund c. World Trade Organization (WTO) d. European Union (EU)

d. European Union (EU)

What term describes a trade arrangement in which one company--the licensor--allows another company--the licensee--to use its company name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a fee, or royalty? a. International business b. Franchising c. Quota d. Licensing

d. Licensing

What is meant by contract manufacturing? a. Involves transferring manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive b. The buying, selling, and trading of goods and services across national boundaries c. Occurs when a country or business firm sells products at less than what it costs to produce them d. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification

d. Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification

You are the president of Henry Motor Corp., and you see the great potential markets in Eastern Europe for personal transportation. Your plan is to purchase an old Soviet tank plant and convert it into an auto factory. The Russian government welcomes your plan, which is an example of a. contract manufacturing. b. a strategic alliance. c. a joint venture. d. a direct investment.

d. a direct investment.

The United States' prohibition of the importing of Cuban cigars is an example of a. a tariff. b. a countertrade. c. a quota. d. an embargo.

d. an embargo.

China's arrangement with the Congo to barter infrastructure in exchange for metals is an example of a a. quota. b. protective tariff. c. balance of trade. d. countertrade agreement.

d. countertrade agreement.

The ratio at which one nation's currency can be exchanged for another nation's currency or gold is the a. international rate. b. currency ratio. c. monetary exchange. d. exchange rate.

d. exchange rate.

The purchase of goods and services from a foreign source defines a. exporting b. free trade c. countertrade d. importing

d. importing

You are the producer of Western Denim brand blue jeans. The pants are in high demand in Pangia; however, shipping costs, tariffs, and trade restrictions are insurmountable. As a last resort, you have entered into an agreement to let a local Pangian manufacturer use your name, materials, and trademark to produce the jeans in exchange for a royalty. This is a a. franchising agreement. b. joint venture. c. strategic alliance. d. licensing agreement.

d. licensing agreement.

The agreement between Japan's Sony Corporation and the Swedish telecommunication company Ericsson to make mobile phones is an example of a a. direct investment. b. cartel. c. joint venture. d. strategic alliance.

d. strategic alliance.