BUSG129/W04 CHAPTER 3 2018 MIDTERM

A country has a trade deficit when the ________.

value of its imports exceeds the value of its exports -When the value of goods and services imported by a country exceeds the value of goods and services it exports, the country has a negative balance of trade, or a trade deficit.

Which of the following is an example of a trading bloc?

European Union -rading blocs, or common markets, are regional organizations that promote trade among member nations. European Union is one such trading bloc.

A country's balance of trade is the total value of its imports less the total value of its exports.

FALSE The total value of a country's exports minus the total value of its imports, over some period of time, determines its balance of trade.

________ limit the amount of particular goods that countries allow to be imported during a given year.

Import quotas -Import quotas limit the amount of particular goods that countries allow to be imported during a given year.

An embargo is a complete ban on the import or export of certain products or even all trade between certain countries.

TRUE An embargo is a complete ban on the import or export of certain products or even all trade between certain countries.

Culture is a shared system of symbols, beliefs, attitudes, values, expectations, and norms for behavior.

TRUE Culture is a shared system of symbols, beliefs, attitudes, values, expectations, and norms for behavior.

The European Union has created a currency of its own.

TRUE The EU has taken a significant step beyond all other trading blocs in the area of money by creating its own currency, the euro, which has been adopted by more than half the member states of the EU.

_______ is a permanent forum for negotiating, implementing, and monitoring international trade procedures and for mediating trade disputes among its more than 150 member countries.

World Trade Organization -The World Trade Organization (WTO) is a permanent forum for negotiating, implementing, and monitoring international trade procedures and for mediating trade disputes among its more than 150 member countries.

Legal systems in Great Britain and the U.S. are based on ________ law.

common-The legal systems in the United States and the United Kingdom are based on common law, in which tradition, custom, and judicial interpretation play important roles.

Multinational corporations are companies that ________.

establish a physical presence in multiple countries through FDI -Companies that establish a physical presence in multiple countries through FDI are called multinational corporations (MNCs).

A firm wants to enter foreign markets to expand its business. However, it does not want to make significant investments before assessing foreign conditions. Which of the following strategies is best suited to enter a foreign market slowly and then design the firm's product offerings?

exporting -Exporting allows a firm to enter a foreign market gradually, assess local conditions, and then fine-tune its product offerings to meet the needs of local markets. In most cases, the firm's financial exposure is limited to the costs of researching the market, advertising, and either establishing a direct sales and distribution system or hiring intermediaries.

ohn, a jewelry maker in Montana, receives international orders through his website. He ships the products from the production plant at Montana after receiving confirmed orders. This scenario is an example of ________.

exporting-Exporting is the selling of products outside the country in which they are produced. The given scenario is an example of this.

McDonald's has sold individual owners the rights to use its trademark and business system. Furthermore, McDonalds's has used this approach to open restaurants in more than 100 foreign countries. This is an example of ________.

franchising-Franchising involves selling the right to use a business system, including brand names, business processes, trade secrets, and other assets. The given scenario is an example of franchising.

In a(n)________ strategy, managerial control is highly centralized and major decisions for the company's international operations are made at the company's headquarters in the home country.

global-In the global strategy, a company embraces the notion of economic globalization by viewing the world as a single integrated market. Managerial control with the global strategy is highly centralized, with headquarters in the home country making all major decisions.

Dumping ________.

involves selling a product at a price lower than the cost of production-The practice of selling large quantities of a product at a price lower than the cost of production or below what the company would charge in its home market is called dumping.