Foundations of Business ch 3

A foreign country's production of private-label goods to which a domestic company then attaches its brand name or trade mark is called: Multiple choice question. A. contract manufacturing B. licensing C. foreign direct investment D. exporting

A

Export Assistance Centers work with small and medium-sized businesses who are hesitant to do: Multiple choice question. A. direct exporting B. dumping C. indirect exporting D. marketing research

A

Free trade is the movement of goods and services among nations: Multiple choice question. A. without political or economic barriers B. without political but with economic barriers C. with political and economic barriers D. with political but without economic barriers

A

Small and medium-sized firms are often better prepared to leap into global markets because they: Multiple choice question. can react quickly to opportunities have more liquid assets have less to lose than large multinationals have less educated workers

A

The definition of ______ ______ states: the movement of goods and services among nations without economic or political barriers. Multiple choice question. A. free trade B. global trade C. free export D. trade deficit

A

What agreement created a free-trade area among the United States, Canada, and Mexico? Multiple choice question. North American Free Trade Agreement (NAFTA) European Union (EU) General Agreement on Tariffs and Trade (GATT)

A

When two or more companies, often from different countries, join together to take on a major project it is called a: Multiple choice question. A. joint venture B. contract manufacturing C. foreign subsidiary D. strategic alliance

A

Select all that apply Students attending colleges and universities abroad often notice products that are unavailable in their home countries and Multiple select question. A. work with native producers to import the products to their home countries B. develop start up financing to become importers of that product while still students C. begin to import them because that requires little effort to succeed D. have to develop financing and work long hours to import the products to their home countries

ABD

Select all that apply An embargo: Multiple select question. A. bans all trade of a certain product B. limits the quantity of an import C. bans all trade with a particular country D. places a tax on certain imports

AC

Select all that apply Which of the following are considered major hurdles to successful global trade? Multiple select question. A. Legal and regulatory forces B. High literacy rates C. Economic and financial forces D. Established ports and road systems

AC

Select all that apply Which of the following are disadvantages of international joint ventures? Multiple select question. A. The joint venture may become too large and inflexible B. Access to markets where goods and services must be produced locally C. Shared technology may become obsolete D. Shared marketing expertise

AC

Select all that apply Which of the following are functions of export assistance centers (EACs)? Multiple select question. A. Hands-on exporting assistance B. Packaging assistance C. Trade-finance support D. Scheduling assistance

AC

Select all that apply Global trade is measured using two key indicators known as the: Multiple select question. A. balance of trade B. market price C. equilibrium point D. balance of payments

AD

Select all that apply Which of the following countries are members of the Central American Free Trade Agreement (CAFTA)? Multiple select question. Guatemala Cuba Panama Nicaragua Costa Rica Honduras

ADEF

A limit on the quantity of products in a certain category that a nation can import is called a(n) Multiple choice question. A. import quota B. import tariff C. embargo D. protective tariff

AF

China has been penalized for selling steel at a lower price in the U.S. than it does in China because: Multiple choice question. A. it charges 20% over the price at home B.it is dumping C.trying to evade taxes D. it is in short supply in China

B

Job seekers should recognize that small businesses in the U.S. Multiple choice question. A. are unable to compete with large companies B. account for about 1/3 of the total U.S. exports C. do not export enough to be a source of jobs D. export less due to lack of government support

B

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? Multiple choice question. A. Economic and financial B. Physical and environmental C. Sociocultural D. Legal and regulatory

B

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? Multiple choice question. A. Economic and financial forces B. Legal and regulatory forces C. Sociocultural forces D. physical and environmental forces

B

The definition of __ __ __ states: the buying of permanent properties or businesses in foreign nations. Multiple choice question. A. foreign strategic alliance B. foreign direct investment C. international joint venture D. global contract manufacturing

B

The definition of ______ states: a complete ban on the import or export of a certain product, or the stopping of all trade with a particular country. Multiple choice question. tariff embargo trade protectionism revenue tariff

B

The guiding principle of free economic exchange is: Multiple choice question. A. protectionist theory B. comparative advantage theory C. communism D. socialism

B

The system in which the value of a currency is fixed by supply and demand is Multiple choice question. A. countertrading B. a floating exchange rate C. a barter system D. devaluation of the currency

B

The total value of a nation's exports compared to its imports measured over a particular period is the definition of: Multiple choice question. A. trade deficit B. balance of trade C. balance of exports D. trade surplus

B

What is the global strategy in which a firm allows a foreign company to produce its product in exchange for a fee? Multiple choice question. A. Exporting B. Licensing C. Franchising D. Contract manufacturing

B

When trying to decide where to expand his operations, a small business owner studied several different nations. He analyzed each nation's balance of trade and balance of payments. This small business owner was: Multiple choice question. A. running a successful business B. measuring global trade C. determining currency values D. assessing cultural barriers

B

Select all that apply In what way will globalization impact U.S. businesses? Multiple select question. Loss of political independence Loss of jobs in manufacturing Increased competition Concerns for product safety

BCD

Select all that apply Threats to global trade include Multiple select question. 7.7 billion potential customers income inequality rogue states terrorism

BCD

Select all that apply A common market, also called a trading bloc, is a regional group of countries with: Multiple select question. A. no laws to discourage trade B. no internal tariffs C. a restriction of trade among members D. a common external tariff

BD

Select all that apply Howard Schultz started Starbucks Multiple select question. A. because it was impossible to get good coffee in Seattle B. after enjoying coffee houses in Italy C. because he inherited the original Starbucks store D. because he liked the ambience of Italian coffee houses

BD

Select all that apply Job seekers interested in working in global trade should consider applying to: Multiple select question. A. only small companies B. small businesses C. only large companies like IBM D. major companies

BD

Select all that apply Which of the following are functions of the World Trade Organization? Multiple select question. A. To establish common external tariffs B. To mediate trade disputes among nations C. To eliminate internal taxes D. To oversee cross-border trade issues

BD

A foreign subsidiary is a company owned in a foreign country by another company called the: Multiple choice question. A. licensed company B. franchise C. parent company D. outsourced company

C

A trade surplus occurs when a country's: Multiple choice question. A. exports are equal to imports B. exports are less than imports C. exports are greater than imports D. balance of trade is unfavorable

C

The definition of ______ states: lowering the value of one nation's currency relative to other currencies. Multiple choice question. inflation low value of the dollar devaluation countertrading

C

What is the primary function of protective tariffs? Multiple choice question. A. To limit the number of products in a certain category that a nation can import B. To ban the import of certain goods and services C. To raise the price of imported products so that domestic goods are more competitively priced

C

Which of the following are considered to be a major hurdle to successful global trade? Multiple choice question. Established ports and road systems Increased global demand Sociocultural differences High literacy rates

C

The U.S. free trade agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Nicaragua, and Honduras is __________ .

CAFTA

Select all that apply Benefits of exporting goods such as snowplows and sand to the Middle East include: Multiple select question. A. marketing will be very different B. it will cost producers more to build the product C. there is likely to be less competition D. the product may be used differently than in the U.S.

CD

Select all that apply China has transformed the world economic map because Multiple select question. discourages foreign direct investment has laws preventing foreign direct investment it has a population of 1.4 billion people it has become an exporting powerhouse

CD

Distribution in many developing countries is difficult because of the lack of reliable transportation infrastructure due to natural disasters. This is an example of what type of forces affecting global trade? Multiple choice question. A. Economic and financial forces B. Sociocultural forces C. Physical and environmental forces D. Legal and environmental forces

Cf

A subsidiary must observe the legal requirements of both the country where the parent firm is located, called the ______ country, and the foreign country where the subsidiary is located, called the ______ country. Multiple choice question. A. rich; poor B. owner; owned C. host; home D. home; host

D

A trade deficit occurs when a country's: Multiple choice question. A. balance of trade is favorable B. exports are greater than imports C. exports are equal to imports D. exports are less than imports

D

A widely debated issue of the early 1990s was the ratification of the ______ ______ ______ ______ Agreement, which created a free-trade area among the United States, Mexico, and Canada. Multiple choice question. Free Trade Block for North and Central America Trade Free Zone of North America Free Ports North American Free Trade

D

China has excellent manufacturing capabilities, whereas Russia has excellent natural gas production capabilities. Therefore, China manufactures products for Russia and Russia produces natural gas for China. This is an example of: Multiple choice question. A. economic growth B. supply and demand C. absolute advantage D. comparative advantage

D

Mediating trade disputes among nations and overseeing cross-border trade issues and global business practices are functions of: Multiple choice question. The General Agreement on Tariffs and Trade (GATT) The North American Free Trade Agreement (NAFTA) The Central American Free Trade Agreement (CAFTA) The World Trade Organization (WTO)

D

Selling products at a lower price in a foreign country than in the producing country is: Multiple choice question. A. illegal in all countries B. a trade barrier C. also known as a tariff D. dumping

D

The United States has had a trade deficit since 1975 because: Multiple choice question. A. it had bigger budget deficits than other nations had B. it sold more goods to other nations than it bought C. it manufactured more goods than other nations manufactured D. it bought more goods from other nations than it has sold

D

The United States has spent more money on imports than it has made by exporting. Accordingly, the United States experiences: Multiple choice question. A. strong economic growth B. a trade surplus C. a favorable balance of trade D. a trade deficit

D

The United States is efficient at producing software and engineering services, but cannot produce clothes and electronics as efficiently as other nations. As such, the United States sells software and engineering services to other countries and buys clothes and electronics. This is an example of: Multiple choice question. A. absolute advantage B. supply and demand C. economic profit D. comparative advantage

D

The definition of ______ ______ states: a limit on the number of products in certain categories that a nation can import. Multiple choice question. A. trade protectionism B. tariff barriers C. revenue tariffs D. import quotas

D

The definition of ______ advantage is the advantage that exists when a country has a monopoly on producing or is able to produce something more efficiently than all other countries. Multiple choice question. A. comparative B. exclusive C. competitive D. absolute

D

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. Multiple choice question. contract manufacturing licensing exporting franchising

D

U.S. workers will see increased competition from other countries in the future due to: Multiple choice question. trade protectionism population growth and diversity in U.S. cities global warming outsourcing to foreign countries

D

When the value of a country's exports exceeds that of its imports, the country exhibits a(n): Multiple choice question. A. economic recession B. trade deficit C. balance of payments D. trade surplus

D

Which country is the world's largest exporter and second largest economy? Multiple choice question. Russia India United States China

D

True or false: Licensing is a contractual agreement whereby someone with a good idea for a business sells others the rights to use the business name to sell a product or service in a given territory in a specified manner.

False

The balance of trade is the total value of a nation's _________ compared to its ________________ over a particular period of time.

exports, imports

When the value of a currency is fixed by supply and demand it is the system known as _________ ________ rates.

floating exchange

___________ ______________ ____________ is the buying of permanent property and businesses in foreign nations. (Enter one word in each blank.)

foreign direct investment

Contract manufacturing is a type of outsourcing when a __________ company produces private-label goods which a __________company then markets under its own brand name. (Enter one word in each blank.)

foreign, domestic

A licensor may compete globally by charging a __________ royalty fee to a company for the right to_____________ its product or use its trademark. (Enter one word in the blank.)

foreign, manufacture

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. (Enter one word in the blank.)

franchise

Some entrepreneurs have spotted opportunities to _____________ goods or services while they were traveling or studying in other countries.

import

When a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries it is said to have a(n) ____________ advantage.

absolute

When a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries it is said to have a(n) _____________ advantage.

absolute

A(n)__________ ______________ , 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

The guiding principle of free economic exchange is ____________ __________ theory.

comparative advantage

________ __________ theory states that a country should sell to other countries those products it produces most efficiently and import those it doesn't.

comparative advantage

_________________ _______________ involves a foreign company producing private-label goods to which a domestic company then attaches its own brand name or trademark. (Enter one word in each blank.)

contract manufacturing

By buying more than it has sold, making the value of its exports less than its imports, the United States faces a trade ________ .

deficit

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

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

The definition of _______ _______states: a partnership in which two or more companies,often from different countries, join to undertake a major project.

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

Global trade offers opportunities because there are so many potential _________ .

markets

U.S. business will experience increased ________ in the future due to the effects of globalization.

outsourcing

The outcome of FDI (foreign direct investment) is a foreign subsidiary, a company located in a different country from the _________ company.

parent

The balance of __________ is the difference between money from exports and money from imports, as well as from other sources such as foreign investment and military expenses.

payments

A weak transportation infrastructure results in a(n) _______ barrier to global business.

physical

Trade ____________ is the use of government regulations to limit the import of goods and services such as import tariffs and quotas

protectionism

_________ tariffs are designed to raise money for the government.

revenue

Export Assistance Centers provide hands-on exporting assistance and trade-finance support for _________ and ___________ -sized businesses.

small, medium

The hurdles to success are higher and more complex in global markets than in domestic markets. Such hurdles include __________ forces, economic and financial forces, (political) legal and regulatory forces, and physical and environmental forces.

sociocultural

A company situated in a foreign country that is owned by a parent company located in a different country, is a foreign __________ .

subisdiary

A(n)________ is a tax imposed on imports. (one blank/one word)

tariff

Balance of __________ is the total value of a nations exports compared to its imports measured over a particular period.

trade

The definition of a _______ _________ states: an unfavorable balance of trade, which occurs when the value of a country's exports is less than its imports.

trade deficit

The definition of ________ __________ states: a favorable balance of trade, which occurs when the value of a country's exports exceeds that of its imports.

trade surplus