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Exam 3: Doing Business in Global Markets

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Question 81

True/False

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With the achievements of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), nearly all barriers to trade expansion are finally removed.

A) True
B) False

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Question 82

Multiple Choice

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Many of the toy products sold in the United States are imported from Taiwan because the Taiwanese can produce these products more efficiently than U.S. companies. This is an example of:

A) bilateral advantage.
B) comparative advantage.
C) absolute advantage.
D) unilateral advantage.

E) A) and D)
F) All of the above

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Question 83

Multiple Choice

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The common market arrangement that groups Brazil, Argentina, Paraguay, Uruguay, Chile, and Bolivia is called the:

Kodak contracts with a firm in Taiwan to manufacture Kodak digital cameras. This is an example of a joint venture.

Nikkei Bike Parts testified before Congress defending the company against an accusation that it was dumping parts on the U.S. market. In her testimony, the president claimed _________________. Using traditional guidelines, Congress determined that Nikkei was not dumping.

Japanese auto manufacturers, such as Toyota and Nissan, have invested billions of dollars in the United States by building new factories, warehouses, and offices. These investments increase favorably the balance of payments for the United States.

Trade protectionism:

According to current U.S. laws, American firms are prohibited from participating in joint ventures with foreign firms.

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

Foreign travel can help in identifying global business opportunities.

When trading in global markets, most countries prefer to import more than they export.

Peru and Bolivia account for almost 97% of the production of quinoa seed, and most of it is sold to the U.S., Japan, and other wealthy nations. According to a former Colorado State agronomist who helped introduce the product into the U.S. several years ago, "This food is about the most perfect you can find for human diets." Although there are other areas where the seed will grow (including higher elevations in Colorado) , the majority of the quinoa sold in the U.S. is imported from Peru and Bolivia. These two nations have a(n) ________________ in the production of quinoa.

Even though the U.S. exports a large ___________ of goods and services, it exports a much lower __________ of its products than many other countries do.

Franchising is popular both domestically and internationally.

The country of Hasastan exports $250 of goods and services and imports $170 of goods and services. Hasastan has an unfavorable balance of trade of $80.

The value of Chinese exports coming to the United States is greater than the value of goods China buys from the U.S. This results in a U.S. trade deficit with China.

Companies may have several reasons for creating joint ventures. Which of the following statements is one reason why firms may decide to form a joint venture?

Due to a nation's weak currency, people may have to fall back on ____________.

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.

The country of New Florentina mines more fluorite each year than it needs for its own manufacturing purposes. Recently, a neighboring country complained that its manufacturing sites could buy fluorite from New Florentina cheaper than they could buy it from its own mines. A government trading expert's claim that New Florentina is dumping fluorite onto its neighbor's market is probably accurate.