Question 1

The principle of mercantilism encouraged nations to keep economics separate from politics.

Accepted Answer

A) True 
 B)False

Question 2

France, Italy, Denmark, and Luxembourg are all members of the EU. Which of the following statements is an accurate description of trade between these nations?

Accepted Answer

A)  France and Italy are permitted to engage in free trade due to their proximity to each other, however, Luxembourg only has free trade with Belgium, and Denmark only has free trade with Switzerland, Sweden, and Germany.
B)  The EU has abolished customs duties at internal borders for these and other member nations and put in place a uniform system for taxing imports. Internal border controls subsequently disappeared.
C)  Customs officers that collect tariffs are now found at the internal borders of all EU member nations.
D)  France, Italy, Denmark, and Luxembourg are four nations strongly considering abandoning the EU common market. The global trading bloc has proved inefficient in these nations attracting global business.E) A) and C)
F) B) and D)

Question 3

For a firm to be considered a multinational corporation, which of the following conditions must be true?

Accepted Answer

A)  It must have manufacturing facilities and a physical presence in several countries.
B)  Its marketing arm must be based at the company's world corporate headquarters.
C)  Stock ownership must be domestic.
D)  All transactions must be financed by the International Monetary Fund.E) B) and D)
F) All of the above

Question 4

Which of the following statements best describes the theory of comparative advantage?

Accepted Answer

A)  The best way for a nation to ensure full employment is to be totally self-sufficient rather than relying on other nations to obtain goods and services.
B)  Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce efficiently from other nations.
C)  The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships.
D)  A nation should produce those goods for which domestic demand is comparatively strong, and should import those goods for whichE) B) and C)
F) A) and D)

Question 5

are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.

Accepted Answer

A)  Export trading companies
B)  Licensees
C)  Strategic alliances
D)  KeiretsuE) A) and D)
F) All of the above

Question 6

You sell paint products and accessories for painters. Recently, you were in contact with merchants from India who have taken an interest in your products and are willing to talk more about entering into a contractual deal to purchase your goods. This opportunity may be just the thing to get your business over its slump, because you learned from your Introduction to Business class that very few barriers exist between U.S. and Indian markets.

Accepted Answer

A) True 
 B)False

Question 7

The World Trade Organization (WTO) was established to mediate trade disputes among nations.

Accepted Answer

A) True 
 B)False

Question 8

When U.S. firms choose to hire skilled and unskilled workers in other countries to produce goods and services, rather than producing them in the United States, we refer to this as .

Accepted Answer

A)  offshore procurement
B)  domestic outsourcing
C)  foreign distribution
D)  offshore outsourcingE) A) and B)
F) A) and D)

Question 9

A few years ago, a well-known celebrity who promoted a line of clothing was accused of supporting child labor in a Honduras manufacturing site where the clothes were made. Although the celebrity's image was tarnished, he immediately was able to close down the operation due to a violation of international law.

Accepted Answer

A) True 
 B)False

Question 10

Although it has experienced persistent social unrest, multinationals have shown interest in Russia due to:

Accepted Answer

A)  its cultural compatibility to the West.
B)  the consistent strength of its currency compared to U.S. and Japanese currencies.
C)  the size of its natural resources.
D)  its current abolishment of religious freedom.E) A) and C)
F) B) and C)

Question 11

Differences in electrical systems throughout the world can impair a U.S. firm's ability to sell its products to other countries.

Accepted Answer

A) True 
 B)False

Question 12

Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of:

Accepted Answer

A)  negotiated rate adjustments between the U.S. government and the World Trade Organization.
B)  decisions made by the Federal Reserve Board of Governors in order to implement monetary policy.
C)  fluctuations in the world price of gold.
D)  changes in the supply of and/or demand for dollars in the global currency market.E) B) and C)
F) None of the above

Question 13

Some firms will practice "dumping" in order to gain a foothold in a new market.

Accepted Answer

A) True 
 B)False

Question 14

McHugh Corporation of Ireland and Enomoto Enterprises based in Japan recently produced a new electric car with rechargeable batteries that can be driven at high speeds for long distances. They have shared the investment, each contributing important technological expertise to the effort. These firms entered into a(n)  to build this car.

Accepted Answer

A)  Joint venture
B)  Multinational cartel
C)  Industrial countertrade agreement
D)  Multinational limited partnershipE) C) and D)
F) None of the above

Question 15

Foreign firms find it difficult to sell goods in the United States because most goods produced by foreign firms are already produced more efficiently by American firms.

Accepted Answer

A) True 
 B)False

Question 16

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n) :

Accepted Answer

A)  export trading company.
B)  international brokerage house.
C)  keiretsu.
D)  global trade bank.E) B) and D)
F) All of the above

Question 17

In any given year, the United States' cash outflow to other nations exceeds its cash inflow from other nations.

Accepted Answer

A) True 
 B)False

Question 18

Using contract manufacturing as a strategy to reach global markets offers firms the advantage of:

Accepted Answer

A)  expert and experienced laborers.
B)  reduced financial risks.
C)  increased volatility.
D)  currency stability.E) None of the above
F) B) and C)

Question 19

A small Italian grocery store sells five varieties of feta cheese. It offers Bulgarian, French, Danish, Greek, and one that is processed and sold from Tillamook, Oregon. The domestic variety (from Oregon)  sells for $1.99/pound, while all the others sell for more than $2.99/pound, and the Greek variety is priced at $6.99/pound. The domestic variety is much cheaper because:

Accepted Answer

A)  Customers always perceive the domestic varieties to be of lower quality than the imported varieties.
B)  The value of the dollar never favors imported goods.
C)  Imported cheese producers often pay protective tariffs on these goods, which ultimately raises the price at the grocery store.
D)  The distributors of these imports refuse to buy the cheese in large enough quantities to enjoy economies of scale.E) All of the above
F) A) and B)

Question 20

The United States enjoys a trade surplus in the global market.

Accepted Answer

A) True 
 B)False

Exam 3: Doing Business in Global Markets

Correct Answer
verified

When U.S. firms choose to hire skilled and unskilled workers in other countries to produce goods and services, rather than producing them in the United States, we refer to this as .

Correct Answer
verified

Using contract manufacturing as a strategy to reach global markets offers firms the advantage of:

Correct Answer
verified

Correct Answer
verified

Although it has experienced persistent social unrest, multinationals have shown interest in Russia due to:

Correct Answer
verified

Which of the following statements best describes the theory of comparative advantage?

Correct Answer
verified

Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of:

Correct Answer
verified

Correct Answer
verified

The principle of mercantilism encouraged nations to keep economics separate from politics.

Correct Answer
verified

The World Trade Organization (WTO) was established to mediate trade disputes among nations.

Correct Answer
verified

Some firms will practice "dumping" in order to gain a foothold in a new market.

Correct Answer
verified

In any given year, the United States' cash outflow to other nations exceeds its cash inflow from other nations.

Correct Answer
verified

Differences in electrical systems throughout the world can impair a U.S. firm's ability to sell its products to other countries.

Correct Answer
verified

are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.

Correct Answer
verified

For a firm to be considered a multinational corporation, which of the following conditions must be true?

Correct Answer
verified

France, Italy, Denmark, and Luxembourg are all members of the EU. Which of the following statements is an accurate description of trade between these nations?

Correct Answer
verified

The United States enjoys a trade surplus in the global market.

Correct Answer
verified

Correct Answer
verified

Foreign firms find it difficult to sell goods in the United States because most goods produced by foreign firms are already produced more efficiently by American firms.

Correct Answer
verified

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n) :

Correct Answer
verified

Exam 3: Doing Business in Global Markets

Correct AnswerverifiedShow Answer

When U.S. firms choose to hire skilled and unskilled workers in other countries to produce goods and services, rather than producing them in the United States, we refer to this as .

Correct AnswerverifiedShow Answer

Using contract manufacturing as a strategy to reach global markets offers firms the advantage of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Although it has experienced persistent social unrest, multinationals have shown interest in Russia due to:

Correct AnswerverifiedShow Answer

Which of the following statements best describes the theory of comparative advantage?

Correct AnswerverifiedShow Answer

Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The principle of mercantilism encouraged nations to keep economics separate from politics.

Correct AnswerverifiedShow Answer

The World Trade Organization (WTO) was established to mediate trade disputes among nations.

Correct AnswerverifiedShow Answer

Some firms will practice "dumping" in order to gain a foothold in a new market.

Correct AnswerverifiedShow Answer

In any given year, the United States' cash outflow to other nations exceeds its cash inflow from other nations.

Correct AnswerverifiedShow Answer

Differences in electrical systems throughout the world can impair a U.S. firm's ability to sell its products to other countries.

Correct AnswerverifiedShow Answer

are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.

Correct AnswerverifiedShow Answer

For a firm to be considered a multinational corporation, which of the following conditions must be true?

Correct AnswerverifiedShow Answer

France, Italy, Denmark, and Luxembourg are all members of the EU. Which of the following statements is an accurate description of trade between these nations?

Correct AnswerverifiedShow Answer

The United States enjoys a trade surplus in the global market.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Foreign firms find it difficult to sell goods in the United States because most goods produced by foreign firms are already produced more efficiently by American firms.

Correct AnswerverifiedShow Answer

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n) :

Correct AnswerverifiedShow Answer

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