ch 3 quiz

Which of the following describes a direct investment? a. When firms develop new facilities from the ground up in foreign countries b. When two firms jointly pursue a specific opportunity without actually merging their businesses c. When a firm expands by offering businesses in other countries the right to produce and market its products according to specific operating requirements d. When two or more companies join forces by sharing resources, risks, and profits, but not actually merging companies

a. When firms develop new facilities from the ground up in foreign countries Other options have to do with business in other countries

When the industries in a country tend to produce products that have the lowest opportunity cost relative to other countries, the country most likely has a _____. a. comparative advantage b. balance of payments surplus c. positive balance d. trade surplus

a. comparative advantage - you can do it at a lower opportunity cost

A _____ is formed when two or more companies share resources, risks, and profits without actually merging, to pursue specific opportunities. a. joint venture b. limited liability partnership c. sole proprietorship d. limited liability company

a. joint venture-countries share resources, form a partnership for specific opportunities

Idina, an African country, and Halen, an Asian country, use the same amount of resources to produce timber. Despite this, Idina is able to manufacture a higher quantity of timber than Halen. In this context, which of the following statements is definitely true of Idina? a. Idina has a higher trade surplus than Halen. b. Idina enjoys an absolute advantage in terms of timber production, relative to Halen. c. Idina has a higher balance of trade than Halen. d. Idina can produce timber at a lower opportunity cost compared to Halen.

b. Idina enjoys an absolute advantage in terms of timber production, relative to Halen.

In the context of the strategies for reaching global markets, which of the following is a disadvantage of foreign outsourcing? a. The returns on investment are diminished.- keep occuring b. The adherence to ethical standards by foreign producers is at risk. When u engage in foregin production, work standards and enviornmental standards in other countries are different c. The cost of production becomes irrecoverable. d. The foreign company needs to pay high wages to the workers.

b. The adherence to ethical standards by foreign producers is at risk. When u engage in foreign production, work standards and environmental standards in other countries are different

Compared to the United States, China and India have ________. a. smaller market size b. higher gross domestic product growth rates c. higher per capita gross domestic products d. lower population

b. higher gross domestic product growth rates

23. _____ refers to selling products in foreign nations that have been produced or grown domestically. a. Foreign franchising b. Outsourcing c. Exporting d. Foreign licensing

c. Exporting

Rafiya Corp. is an Asian electronics company. The company has given a domestic firm in Maeko, a European country, the rights to manufacture and market its product within Maeko. In this scenario, Rafiya Corp. is most likely involved in _____. a. foreign outsourcing b. a limited partnership c. foreign licensing d. direct investment- terms of building a plant from ground up

c. foreign licensing

Sadiya Co., a South American international company, wants to import raw materials from Nakos, a European country. However, the company can import only a certain quantity of raw materials because of trade restrictions imposed by the laws of Nakos. In this scenario, Sadiya Co. is most likely facing the barrier of _____. a. political differences b. sociocultural differences c. legal differences d. economic differences

c. legal differences Imposed by the laws means its a legal difference

Eliza Corp., an American software development company, outsources its support operations to Madan, an African nation, because it has found that Madan has a large cohort of English-speaking college graduates who are ready to work for one-third the pay of comparable American workers. Which of the following is most likely to have influenced Eliza Corp.'s decision to outsource its support operations to Madan? a. Inflow of innovation b. Growth of domestic industries c. Reduced risk d. Access to factors of production

d. Access to factors of production

The _____ is an organization of 190-member nations that promotes global economic cooperation and stable growth. a. World Bank b. World Trade Organization (WTO) c. Bank for International Settlements d. International Monetary Fund (IMF)

d. International Monetary Fund (IMF)

Which of the following countries has a trade deficit? a. The country of Pallaton, whose total value of exports and imports are equal b. The country of Hahn, whose total value of exports exceeds its total value of imports c. The country of Dahl, which exports most of its products from other countries and imports very little d. The country of Abay, whose total value of imports exceeds its total value of exports

d. The country of Abay, whose total value of imports exceeds its total value of exports

In the context of key economic considerations when entering a foreign market, the financial infrastructure in a country most likely includes _____. a. railroads b. cell phone coverage c. power plants d. credit

d. credit

. In the context of barriers to international trade, establishing nonstandard packaging requirements for certain products is most likely a(n) _____. a. quota b. Embargo- product can't enter market/ country c. trading bloc- d. nontariff barrier

d. nontariff barrier

. In the context of key economic considerations when entering a foreign market, which of the following is an example of the financial infrastructure in a country? a. Railroads b. Cell phone coverage c. Power plants d. Banking

d. Banking

true or false In the context of strategies for reaching global markets, importing is a strategy that can be used to seek foreign customers.

false

true or false The financial assistance offered by the World Bank usually comes in the form of high-interest loans

false

true or false A firm that expands through foreign franchising is called a franchisee

false Franchisor- allows Franchisee- receives

true or false In the context of strategies for reaching global markets, franchising is a strategy that can be used to seek foreign suppliers.

false Franchise- when a comp goes into a foreign country, they grant a franchise for ppl to use their name and company False- ur granting a business to use your trademark, name, and how busn operates, ur not trying to enhance supplies/production

true or false Despite their huge populations, China and India represent a much smaller opportunity in terms of size and economic growth

false China and india have large population, and more technology

true or false In the context of foreign direct investment, a partnership typically involves a less formal, less encompassing agreement than a strategic alliance

false Partnership- ppl merge business, split up profits Strategic alliance- collaborate with other, many not share profits

true or false Companies that choose to export products to a foreign country spend more to enter that market than companies that choose to build their own factories.

false Ppl prefer to export products, less expensive to export than build from ground up

True or False Quotas are taxes levied against imports.

false Quotas- limit on number of products coming into country

true or false Although a trade deficit signals the wealth of an economy that can afford to buy huge amounts of foreign products, a large deficit can be destabilizing.

true

true or false A firm that contracts with foreign producers has an obligation to ensure that those factories adhere to ethical standards.

true us countries contract under american ethical standards