Business ch 3

A disruption to the U.S. job market is ____________, where companies have shifted the manufacturing, design, and architecture processes to other nations in order to reduce labor costs.

offshore outsourcing

Mo's Hardware, a U.S. retailer, buys much of its inventory from Asian countries. Mo's Hardware would benefit if the value of the dollar ________ relative to the currencies of the countries from which Mo's imports.

rose

Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies usually result from:

Changes in the supply of and/or demand for dollars in the market for the U.S. currency.

The president of the American Auto Parts Corporation recently testified before members of Congress, urging them to limit the flow of imported automobile parts into the United States. She contended that these imports were priced lower than the foreign producers were charging for the same parts in their own countries. She believes these foreign producers are guilty of:

Dumping.

Which of the following statements best describes the theory of comparative advantage?

Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce efficiently from other nations.

Tyler is typical of many U.S. businesspersons. Tyler feels the U.S. culture should represent the model for the rest of the world, and that the "American Way" of doing things is almost always the best. Tyler is guilty of:

Ethnocentricity.

When foreign companies build facilities and produce goods in the U.S., they are participating in ________________. In May, 2008, the U.S. Secretary of Commerce announced "Invest in America" week, which involved a series of activities in 18 states that highlighted the importance of this strategy to the U.S. economy.

Foreign direct investment

The concept of free trade means:

Goods and services can be traded freely across borders without political and/or economic barriers.

Pepsi Cola has entered into a long-term contract with a South African beverage business. The contract calls for the South African firm to produce and market Pepsi Cola in South Africa. Pepsi will receive a royalty on each case of soda sold. This is an example of:

Licensing.

Many countries use ________________ to protect their domestic industries against dumping and unfair foreign competition.

Trade protectionism