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Exam 3: Doing Business in Global Markets

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Question 131

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Jitensha Bike Parts was called to testify before the U.S. Congress. The CEO of Jitensha defended the company against an accusation that it was dumping parts on the U.S. market. In her testimony, the CEO claimed ________. Using traditional guidelines, Congress determined that Jitensha was not dumping.

A) Jitensha includes 10% overhead costs and an 8% profit margin in the price of all the parts they export to the U.S.
B) Japan runs a trade deficit with the U.S. in bike parts.
C) Jitensha is a staunch supporter of free trade.
D) Jitensha sells more bike parts in Europe than it does in the U.S.

E) B) and C)
F) A) and D)

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Question 132

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A favorable balance of trade occurs when the value of

A) imports equals the value of exports.
B) the cash inflows equals the value of the cash outflows.
C) imports is less than the value of exports.
D) the dollar is greater than the value of the euro.

E) B) and C)
F) A) and B)

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Question 133

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Export trading companies assist businesses in reaching buyers, and dealing with customs, documentation, and payment.

If global trade experts predict that the value of the dollar will soon fall, it will result in

A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.

An important principle for firms desiring to export is

The European Union created a single monetary unit to replace the national currencies of 12 member nations. This common currency is known as the

________ is the selling of products to another country.

Protective tariffs are designed to raise money for the government.

The United States' highest trade deficit is with China.

A United States company won a large contract with a company in Sri Lanka by giving government and company representatives American cars. The company also promised to provide monetary gifts in exchange for the business. Fortunately, U.S. law, under the Foreign Corrupt Practices Act, permits U.S. companies to operate in this manner.

Traders in the seventeenth and eighteenth century were encouraged to focus on selling their nation's goods in the global market to create a favorable balance of trade. Nations attempted to sell more goods to other nations than they bought from other nations. This approach to global trading is called

Trade experts' concerns about trading with China include its

American businesspeople often fail to adapt to foreign markets because they feel that the American culture is superior to other cultures in the world.

In recent years, the government of Norway has invested over $905 billion in foreign companies, including several U.S. companies. This move constitutes the creation of a sovereign wealth fund, an emerging type of foreign direct investment.

Global trade includes the exchange of art, sports, and cultural events.

Contract manufacturing is a form of outsourcing.

The common market arrangement that groups Brazil, Argentina, Paraguay, Uruguay, Bolivia, Chile, Colombia, Ecuador, Peru, and Suriname is called

Banana plantations in Hawaii cannot produce nearly enough of all the bananas consumed by Americans. The fact that the U.S. grows and sells bananas gives it a comparative advantage in bananas. It is not an absolute advantage and that is why we choose to import bananas from South America, as well.

The nation of Taubestan requires that all imported beverages be contained in clear, well-labeled recyclable glass bottles. Several international beverage manufacturers refuse to trade with the country because the cost of glass bottles cuts into their profits to the point where it just isn't worth it. Taubestan has created a nontariff barrier.