Quiz #3

Which of the following are why some governments establish trade protectionism?

1. To avoid foreign completion. 2. To allow domestic produces to survive and grow 3. To save local jobs 4. To guard against dumping

Functions of the World Trade Organization?

1. To mediate disputes among nations 2. To provide technical aid for developing countries 3. To monitor national trade policies

What are the functions of the World Trade Organization?

1. To mediate trade disputes among nations 2. To provide technical aid for developing countries 3. To monitor national trade policies

North America Free Trade Agreement went into effect in 1994 and merged which three countries into one free trade market

1. United States 2. Mexico 3. Canada

Joint Venture

A company that lacks sufficient resources to operate in another country may choose to form a _______ by finding a local partner to share the costs and operation of the business.

Tariff

A country may attempt to protect its own domestic industries by imposing a ____________, a type of tax, on imported products

Quota

A limit on the importation of a particular good brought into one country from another country is referred to as a

Strategic Alliances

A long-term partnership between two or more companies established to help each company build competitive market

Joint ventures

A partnership in which two of more companies join to undertake a major project

World Trade Organization

Administers trade agreements and presents a forum for trade negotiations, monitors national trade policies and provides, and provides training for developing countries.

Direct Investment

Companies that want to retain control and are willing to invest resources in international business will consider ___________, the ownership of overseas facilities

Importing

Companies will first get involved in international trade when they ________ goods from other countries for resale in their own business.

Multinational

Corporation is an organization that manufactures and markets products in many different countries without significant ties to any one nation or region.

The Webb-Pomerene Export Trade Act of 1918

Exempts American firms from antitrust laws if those firms are acting together to enter international trade

What is it called when an a American company sells its goods to foreign markets?

Exporting

When a grocery store chain purchases bananas from Honduras and coffee from Colombia to sell in its store, it is involved in

Importing

Selling products to other countries

Importing involves the purchase of goods and services from foreign sources while exporting involves.

Tariffs and Quotas

In Order to discourage dumping, a country can implement which of the following.

1. Promotion 2. Products 3. Distribution

In a multinational strategy, which of the following are customized according to cultural, technological, regional and national differences?

The Webb-Pomerene Export Trade Act of 1918 exempts America firms from antitrust laws if those firms are acting together to enter __________ trade

International

Balance of payments

Is the difference between the flow of money into and out of a country

Low per-capita

Less developed countries are characterized by _______________ income which means that consumers are less likely to purchase nonessential products.

Outsource

Many American firms ____________ manufacturing or other tasks to countries where labor and supplies are less expensive.

trade agreements

Negotiated ______________ such as NAFTA and the European Union promote trade among member nations by eliminating tariffs an trade restrictions

Contract Manufacturing

Occurs when a company hires a foreign company to produce a specified volume of the firms product to specification; the final product carries the domestic firms name.

Trade Agreements

Promote trade among members nations by eliminating or reducing barriers to trade

World Bank

Provides loans to underdeveloped and developing countries for the building of roads, factories and facilities

Exchange Controls

Restrict the amount of currency that can be brought or sold.

Importing involves the purchase of goods and services from foreign sources while exporting involves

Selling products to other countries

International business

The buying, selling and trading of goods and services across national boundaries is referred to as:

Balance of payments

The difference between the flow of money into and out of a country is its ______.

Trade

The general agreement on tariffs and trade consists of more than 100 nations that abide by its rules and GATT sponsors rounds of negotiations aimed at reducing ____________ restrictions.

World Trade Organization

The organization established by the Uruguay Round of the GATT, whose purpose is to mediate trade disputes among nations is called

Offshore

The relocation of business processes by a company or subsidiary to another country.

Dumping

The selling of products in a foreign country at lower than production cost is called

Balance of trade

The total value of a nations exports compared to its imports measured over a particular period is the definition of

To raise the price of imported products so that domestic goods are more competitively priced

What is the primary function of protective tariffs?

Trade deficit

When a country imports more products than it exports, it has a negative balance of trade or a

Trade surplus

When the value of a country's exports exceeds that of its imports, the country exhibits

Asia-Pacific Economic Cooperation

Which was established in 1989, promotes open trade and economic and technical cooperation among 22 member nations representing 40% of the world's population, 44% or world trade, and 55% of world GDP

Maquiladoras

a Mexican product facility that allow US companies to take advantage of lower production cost.

embargo

a complete ban on the important or export of a certain product, or the stopping of all trade with a particle country.

A countertrade agreement is a complex of ________________ in which several countries may be involved, each trading goods for goods or services for services.

bartering

Trading Company

buys goods in one country

a company may export its overseas directly or import goods directly from their manufacturer, many choose to deal with an intermediary, commonly call

export agent

International Monetary Fund

promotes trade among member nations by eliminating trade barriers and fostering cooperation