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Exam 3: Doing Business in Global Markets

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Question 31

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The objectives of the North American Free Trade Agreement (NAFTA) include allowing free immigration among Canada, Mexico, and the U.S.

A) True
B) False

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Question 32

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Since patent and copyright laws are the same in all nations, they are not of much impact to firms that compete globally.

A) True
B) False

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Question 33

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Importing is the selling of products to another country.

In global markets, there is not a central system of law.

When studying abroad last year, Thomas found that his U.S. dollars didn't stretch as far as he had expected. Each time he exchanged his dollars for euros, he had to give up more dollars in exchange for fewer euros. The exchange rate indicates

One advantage of licensing is the relatively low cost of entering a foreign market.

Devaluation refers to a decline in the value of a nation's currency relative to other currencies.

Which of the following is considered when calculating a country's balance of payments?

If your business has an outstanding product, exporting offers a quick, easy, no-hassle way to improve your profitability.

Franchising is popular both domestically and internationally.

The Dabble Corporation wants to begin exporting its products. The company needs advice about how to get started, as well as trade-finance support. The federal government has established ________ to help companies like Dabble Corporation.

________ was a seventeenth- and eighteenth-century belief that a nation should try to sell more goods to other nations than it buys from them.

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

A sociological challenge that must be overcome in order to be successful in the global market is

A joint venture is a partnership in which two or more companies join to undertake a major project. All parties commit financing and risk to the project.

A firm looking to enter a foreign market with a limited investment should consider licensing.

Mini-Case Ever since he was five years old, Rhett Tenna has had poor eyesight and as an eyeglass wearer he suffered through all the names that went along with it. Rhett eventually switched from glasses to contacts, but he always wondered why his glasses were not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames. A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"! -Although he is confident of success, Rhett is concerned that social, cultural, and economic differences in other nations may create some problems. He believes he should adapt his approach to these differences rather than trying to force the "American way" on foreign consumers. Rhett's attitude suggests that he wants to avoid a(n) ________ approach to business.

The benefits of protective tariffs are

Opponents of the North American Free Trade Agreement (NAFTA) warned that it would have serious economic consequences such as the loss of U.S. jobs.

Denmark requires foreign companies that sell butter in Denmark to sell it in cubes, not tubs. This type of requirement is known as a