Business - Chapter 3

Why do many people fear trade and globalization?

Many fear trade and globalization will lead to massive job losses.

_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.

Multinational corporations

The Sara Lee Company sells the Hanes brand of hosiery in the United States. The manufacturer of this hosiery brand in Great Britain sells it under the brand name of Pretty Polly. The Sara Lee Company is using _____ to broaden its global marketing base without investing in overseas plants and equipment.

contract manufacturing

One of the advantages _____ ______ have over other companies is their ability to sidestep regulatory difficulties.

multinational corporations

In 2006, the nation of Zimbabwe reduced the value of its currency by 60 percent to bring its value more in line with the relative value of most other world currencies. This reduction of value is called:

devaluation

is the ability to recognize and react to international business opportunities, be aware of threats from foreign competition, and effectively use international distribution networks

global vision

In ______ _____, the licensor is the domestic firm that allows the licensee to use its trademark or brand.

international licensing

The _____ is an international bank that normally provides short-term loans to countries that are unable to meet their budgetary expenses.

international monetary fund

Which of the following is NOT an argument for tariffs that protect domestic businesses and workers? a. the infant-industry argument b. the maintenance of improved quality of products to protect consumers c. the protection of small businesses d. the job-protection argument e. the protection of industries and technology vital to defense preparedness

B

Which of the following terms is not associated with international trade: - absolute advantage - balance of payments - balance of trade - discount rate - comparative advantage

discount rate

In 1997, Russia and Ukraine exported carbon steel plate into the U.S. at a price much lower than the countries were found guilty of charging the identical steel in their home markets. Russia and Ukraine were engaged in:

dumping

permits people to buy and sell where they please

free trade

Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners.

free trade zones

Limitations on the quantity of certain types of goods that can be imported over a period of time are called

import quotas

The U.S. has one of the very few areas in the world where kaolin can be mined. Kaolin is a necessary ingredient in many products ranging from stomach medication to paper. The U.S.-produced kaolin is sold all over the world. Kaolin is a(n) _____ for the countries that purchase it.

import

Currency markets operate under a system called _____. This means that prices of currencies vary based upon demand and supply of that currency.

floating exchange rate

When South Korea reduces the tariff that Japan (but only Japan) has to pay when it imports cameras into South Korea, it is called a:

preferential tariff

Mines in Colombia produce emeralds and sell them to jewelers in the United States. To Colombia miners, emeralds are an ________.

export

The Northwest Cherry Growers (headquartered in the state of Washington) sells much of its locally grown produce to Taiwan. _____ was the easiest and least expensive way for the growers' association to sell to global markets.

exporting

The Uruguay Round of trade negotiation is an agreement that only affects trade among Latin American countries.

false

A country that exports more goods than it imports is said to have a(n):

favorable balance of trade

The newest free trade agreement is the _______ Participants in this agreement are the United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Nicaragua, and Honduras.

Central American Free Trade agreements

has emerged as the world's most powerful institution for reducing trade barriers and opening markets

World Trade Organization

The karakul is a breed of Central Asian sheep that produces curly, glossy wool. This wool is popular in some countries for the manufacturing of warm hats and coats. Since the breed can only be grown in Central Asia, this region can be said to have a(n):

absolute advantage

Understanding a foreign markets potential starts with three key areas. The political climate, the culture, and the _____ environment

economic

Shell Oil Company used Intertek Caleb Brett, an Australian research laboratory, to provide all analytical services needed to support one of its full scale refinery. With this ________, Shell replaced domestic employees at the site of the refinery with employees from the Australian firm.

outsourcing

Examples of a Nation's Infrastructure

postal systems, internet sites, railroads, interstate roads

beside tariffs, a government can use a number of other tools to restrict trade. ______ of the following is not a tool aimed at restricting trade

subsidy

Advantages Associated with Multinational Corporations

tap into new technology, shift productions, sidestep regulatory problems, labor savings

China imposes a 45 percent tax on the market value of all chickens that are imported from the U.S. into China. Another name for this type of tax is a(n):

tariff

The tax that the United States imposes on imported carbon steel products is called a

tariff

The _____ created the world's largest free-trade zone.

North American Free Trade Agreement

The signing of the Central America Free Trade Agreement by the United States will more than likely not result in a major increase of U.S. exports.

True

A German law that prohibited the use of hops grown outside of the country in the production of German-made beer was overturned in the late 1980s. This law was an example of a(n):

buy-national trade regulation

In West Africa in the 1990's, militaries were overthrowing governments and taking over warehouses, factories and other business assets without giving anything back to the original business. This is an example of

confiscation

When Grand Metropolitan, a British company, purchased U.S.-based Pillsbury Co. in order to expand its product line and the market for its existing consumer products, it was an example of a(n):

direct foreign investment

AT&T entered into a _____ with Compagnie General d'Electricite, a French company. The French company brings its patents on digital telephone switches, and AT&T provides the marketing know-how to the relationship.

joint venture

Spanish customers view toothpaste as a cosmetic while consumers in the Netherlands view it as a necessary part of daily hygiene and use three times as much their Spanish counterparts. This example of _____ shows how important it is for marketers to understand.

cultural differences

A natural barrier that faces Argentina when it sells beef to Siberia is:

distance

U.S. plane manufacturer McDonnell-Douglas has authorized Mitsubishi Heavy Industries, a Japanese company, to use its trademarks, patents, and other proprietary knowledge to manufacture F-15 fighter planes. Mitsubishi Heavy Industries pays McDonnell-Douglas. This is an example of:

licensing

French language purists on both sides of the Atlantic are on the warpath. Fed up with the growing prevalence of English on the Web, a French state institution founded in the 17th century to maintain the purity of the language unveiled a dictionary of newly-coined French equivalents to English Internet terms in 2000. This is symptomatic of the difficulties in doing business in France because in many situations, the business must be conducted in French. Therefore, it is easy to assume that _____ is extremely important in France.

nationalism

The World Bank's emphasis has recently shifted from helping to build the infrastructure of developing countries to:

offering loans to help to relieve their debt burden

In 1914, the United States prohibited the importation of Mexican avocados even though Mexico is the world's largest producer of the fruit. This prohibition remained in effect until 1996. The ban on importing Mexican avocados is an example of a(n):

embargo