Quiz Ch.3
What two factors are considered major hurdles to successful global trade?
1) Economic and financial forces 2) Legal and regulatory forces
Threats to global trade include...
1) Income inequality 2) rogue states 3) terrorism
When it comes to getting involved in international business what are the three strategies that require the least amount of commitment and effort?
1) Licensing 2) exporting 3)franchising
The balance of trade is the total value of a nation's ________ compared to its ________ over a particular period of time
1) exports 2) imports
Starting to import a product or type of business requires that an entrepreneur....
1) risk time and money to get started 2) find producers to supply the goods needed 3) observe a market opportunity
Job seekers interested in working in global trade should consider applying to:
1) small businesses 2) major companies
Which of the following are important reasons to do business globally?
A) There are more people and countries in the world markets B) There are many potential customers in other countries
A benefit of exporting goods such as snowplows and sand to the Middle East is that:
A) there is likely to be less competition B) the product may be used differently than in the U.S.
The total value of a nation's exports compared to its imports measured over a particular period is the definition of:
Balance of trade
The U.S. free trade agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Nicaragua, and Honduras is...
CAFTA
A regional group of countries with a common external tariff, no internal tariffs, and coordinated laws to facilitate exchange among members is the definition of:
Common market
The guiding principle of free economic exchange is:
Comparative advantage theory
A foreign country's production of private-label goods to which a domestic company then attaches its brand name or trade mark is called:
Contract manufacturing
____________ ________________ involves a foreign company producing private-label goods to which a domestic company then attaches its own brand name or trademark.
Contract manufacturing
Export Assistance Centers work with small and medium-sized businesses who are hesitant to do:
Direct exporting
Which of the following countries are members of the Central American Free Trade Agreement (CAFTA)? (4 countries)
Honduras, guatemala, costa rica, nicaragua
Problems created by differences between countries' antitrust rules, labor laws, patents, copyrights, taxes, product liability, and child labor laws relate to which forces in the global business environment?
Legal and regulatory forces
The North American Free Trade Agreement (NAFTA) created a free-trade area among the United States, ___________ and ___________.
Mexico x Canada
A widely debated issue of the early 1990s was the ratification of the ___________ _______________ __________ ____________ ___________________ which created a free-trade area among the United States, Mexico, and Canada.
North American Free Trade Agreement
U.S. workers will see increased competition from other countries in the future due to:
Outsourcing to foreign countries
Primitive transportation and storage systems that make local distribution ineffective if not impossible, the lack of clean water, and the lack of effective sewer systems are all examples of what type of barrier?
Physical and environmental
What is considered to be a major hurdle to successful global trade?
Sociocultural differences
Mediating trade disputes among nations and overseeing cross-border trade issues and global business practices are functions of:
The World Trade Organization (WTO)
What is the definition of trade protectionism?
The use of government regulations to limit the import of goods and services
The use of government regulations to limit the import of goods and services is called:
Trade protectionism
An independent entity whose purpose it is to oversee cross-border trade issues and global business practices is called the
World Trade Organization
Job seekers should recognize that small businesses in the U.S.
account for about 1/3 of the total U.S. exports
The total value of a nation's exports compared to its imports measured over a particular period is the definition of:
balance of trade
Small and medium-sized firms are often better prepared to leap into global markets because they...
can react quickly to opportunities
A __________ _____________ or trading bloc, is a regional group of countries with a common external tariff, no internal tariffs, and coordinated laws to facilitate exchange among members.
common market
U.S. business will experience increased _________________________ in the future due to the effects of globalization
competition, challenges, opportunities, or outsourcing
Global trade offers opportunities because there so many potential _______________.
customers
U.S. businesspeople are often accused of _________________ an attitude that your own culture is superior to other cultures.
ethnocentricity
The ___________ ___________ is the value of one nation's currency relative to the currencies of other countries.
exchange rate
The value of one nation's currency relative to currencies of other countries is the:
exchange rate
Goods or services from the U.S. can be ___________ to many countries for different uses, such as snowplows to clear sand from driveways in Saudi Arabia.
exported
Goods or services from the U.S. can be _____________ to many countries for different uses, such as snowplows to clear sand from driveways in Saudi Arabia.
exported
A company in another country that is owned by a U.S. company would be an example of a:
foreign subsidiary
A _______________ is a contractual agreement whereby someone with a good idea for a business sells others the rights to use a business name and sell a product or service in a given territory in a specified manner.
franchise
The definition of ___________ states: a contractual agreement whereby someone with a good idea for a business sells others the rights to use the business name and sell a product or service in a given territory in a specified manner.
franchising
Howard Schultz of Starbucks, spotted the opportunity to ___________ the concept of neighborhood coffee bars from Italy while he was traveling there.
import
Students may spot an ____________ opportunity while studying abroad when a product available at home is not available where they are studying.
importing
There are more than 7 billion potential customers in 195 countries around the globe. Each country possesses unique materials and skills, and as technology advances, communication barriers are being brought down. Therefore...
it is important to conduct business globally [[ Reason: Many potential customers and inexpensive labor and materials are just a few reasons why it is important to conduct business globally. ]]
The definition of __________ _________ states: a partnership in which two or more companies, often from different countries, join to undertake a major project.
joint venture
When two or more companies, often from different countries, join together to take on a major project it is called a:
joint venture
Problems arising from differences in antitrust rules, labor relations, patents, copyrights, taxes, and other issues are all considered examples of ________ and regulatory forces within a global market
legal
Of all the strategies for reaching global markets, ______________ offers the least amount of commitment, control, risk, and profit potential.
licensing
The definition of ___________ states a global strategy in which a firm allows a foreign company to produce its product in exchange for a fee.
licensing
A foreign subsidiary is a company owned in a foreign country by another company called the:
parent company
A licensor may compete by charging a fee known as a ___________ for the right to manufacture its product or use its trademark to a foreign company
royalty
Job seekers who want to work in global business should recognize that __________ businesses account for about 1/3 of the U.S.
small
Export Assistance Centers provide hands-on exporting assistance and trade-finance support for _______________________ sized businesses
small and medium
The firms often better prepared to leap into global markets and react quickly to opportunities are:
small and medium businesses [[ Reason: Both small- and medium-sized companies are often better prepared to leap into global markets because they can react quickly to opportunities.]]
A company situated in a foreign country that is owned by a parent company located in a different country, is a foreign ______________
subsidiary
Free trade is the movement of goods and services among nations:
without political or economic barriers
U.S. business people are often accused of ethnocentricity which is a belief that:
your own culture is superior to other cultures