Quiz Ch.3

What two factors are considered major hurdles to successful global trade?

1) Economic and financial forces 2) Legal and regulatory forces

Threats to global trade include...

1) Income inequality 2) rogue states 3) terrorism

When it comes to getting involved in international business what are the three strategies that require the least amount of commitment and effort?

1) Licensing 2) exporting 3)franchising

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

1) exports 2) imports

Starting to import a product or type of business requires that an entrepreneur....

1) risk time and money to get started 2) find producers to supply the goods needed 3) observe a market opportunity

Job seekers interested in working in global trade should consider applying to:

1) small businesses 2) major companies

Which of the following are important reasons to do business globally?

A) There are more people and countries in the world markets B) There are many potential customers in other countries

A benefit of exporting goods such as snowplows and sand to the Middle East is that:

A) there is likely to be less competition B) the product may be used differently than in the U.S.

The total value of a nation's exports compared to its imports measured over a particular period is the definition of:

Balance of trade

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

CAFTA

A regional group of countries with a common external tariff, no internal tariffs, and coordinated laws to facilitate exchange among members is the definition of:

Common market

The guiding principle of free economic exchange is:

Comparative advantage theory

A foreign country's production of private-label goods to which a domestic company then attaches its brand name or trade mark is called:

Contract manufacturing

____________ ________________ involves a foreign company producing private-label goods to which a domestic company then attaches its own brand name or trademark.

Contract manufacturing

Export Assistance Centers work with small and medium-sized businesses who are hesitant to do:

Direct exporting

Which of the following countries are members of the Central American Free Trade Agreement (CAFTA)? (4 countries)

Honduras, guatemala, costa rica, nicaragua

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?

Legal and regulatory forces

The North American Free Trade Agreement (NAFTA) created a free-trade area among the United States, ___________ and ___________.

Mexico x Canada

A widely debated issue of the early 1990s was the ratification of the ___________ _______________ __________ ____________ ___________________ which created a free-trade area among the United States, Mexico, and Canada.

North American Free Trade Agreement

U.S. workers will see increased competition from other countries in the future due to:

Outsourcing to foreign countries

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?

Physical and environmental

What is considered to be a major hurdle to successful global trade?

Sociocultural differences

Mediating trade disputes among nations and overseeing cross-border trade issues and global business practices are functions of:

The World Trade Organization (WTO)

What is the definition of trade protectionism?

The use of government regulations to limit the import of goods and services

The use of government regulations to limit the import of goods and services is called:

Trade protectionism

An independent entity whose purpose it is to oversee cross-border trade issues and global business practices is called the

World Trade Organization

Job seekers should recognize that small businesses in the U.S.

account for about 1/3 of the total U.S. exports

The total value of a nation's exports compared to its imports measured over a particular period is the definition of:

balance of trade

Small and medium-sized firms are often better prepared to leap into global markets because they...

can react quickly to opportunities

A __________ _____________ 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

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

competition, challenges, opportunities, or outsourcing

Global trade offers opportunities because there so many potential _______________.

customers

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

The value of one nation's currency relative to currencies of other countries is the:

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

A company in another country that is owned by a U.S. company would be an example of a:

foreign subsidiary

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.

franchise

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.

franchising

Howard Schultz of Starbucks, spotted the opportunity to ___________ the concept of neighborhood coffee bars from Italy while he was traveling there.

import

Students may spot an ____________ opportunity while studying abroad when a product available at home is not available where they are studying.

importing

There are more than 7 billion potential customers in 195 countries around the globe. Each country possesses unique materials and skills, and as technology advances, communication barriers are being brought down. Therefore...

it is important to conduct business globally [[ Reason: Many potential customers and inexpensive labor and materials are just a few reasons why it is important to conduct business globally. ]]

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

joint venture

When two or more companies, often from different countries, join together to take on a major project it is called a:

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

A foreign subsidiary is a company owned in a foreign country by another company called the:

parent company

A licensor may compete by charging a fee known as a ___________ for the right to manufacture its product or use its trademark to a foreign company

royalty

Job seekers who want to work in global business should recognize that __________ businesses account for about 1/3 of the U.S.

small

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

small and medium

The firms often better prepared to leap into global markets and react quickly to opportunities are:

small and medium businesses [[ Reason: Both small- and medium-sized companies are often better prepared to leap into global markets because they can react quickly to opportunities.]]

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

subsidiary

Free trade is the movement of goods and services among nations:

without political or economic barriers

U.S. business people are often accused of ethnocentricity which is a belief that:

your own culture is superior to other cultures