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Exam 3: Doing Business in Global Markets

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Question 181

True/False

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One advantage of licensing as a strategy to enter the global market is the sharing of trade secrets.

A) True
B) False

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Question 182

Multiple Choice

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Japanese automobile producers sold more of their Japanese production overseas than they sold in Japan.Their business strategy emphasizes:

A) importing.
B) licensing.
C) dumping.
D) exporting.

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

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Question 183

Multiple Choice

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___________ is the use of government regulations to limit the import of goods and services.

An exchange rate is the value of one nation's currency relative to the currencies of other nations.

Idle Time Gaming,Inc.needed silicon wafers that it knew could be mass produced efficiently by Silicon City,Inc. ,a start-up firm in India.The Indian company needed MSG (metallurgical grade silicon)in order to make the wafers which it knew it could get from a Chinese firm.The Chinese firm (mostly owned by the Chinese government)agreed to supply the silicon to the Indian company if it could get a certain quantity of gaming hardware from Idle Time.This beneficial exchange is described as countertrading. Countertrading is the exchange of goods and services,without the exchange of currency.It is a form of bartering.

A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs) .Why do these investments by governments with surplus cash flows worry trade experts?

Nontariff barriers such as the Japanese keiretsu can be just as detrimental to free trade as tariffs.

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 _________.

Offshore outsourcing is another term used to describe the act of U.S.firms selling their domestically manufactured goods to foreign customers.

Importing is the selling of products to another country.

Mini-Case Since he was five years old,Rhett Tenna struggled with poor eyesight.He suffered through all the names that went along with wearing eyeglasses for most of his young life.Rhett eventually switched from traditional eyeglasses to contact lens,but he always wondered why glasses were considered to be "ugly" and not fashionable.After graduation from college,Rhett set out on a lifelong goal: to make eye wear synonymous with high 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"! -Rhett heard predictions that the value of the U.S.dollar is likely to decline substantially over the next six months.This should:

Firms such as McDonald's,Pizza Hut,and KFC,have entered the global market by offering investors the opportunity to buy:

The "second wave" of offshore outsourcing refers to:

In an effort to protect domestic jobs,some countries will place a limit on the number of certain types of products that can be imported.These limits are called:

The legislation that prohibits U.S.businesses from making "questionable" or "dubious" payments to foreign officials,to secure business contracts is the ______________.

The U.S.Department of Commerce predicts that by the year 2018,at least half of all small businesses will be exporters.

A country has an absolute advantage if it has a monopoly in the production of a specific product or is able to produce it more efficiently than all other nations.

__________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries.

Which of the following continents is home to the largest percentage of the world's population?

Small businesses are less involved in global trade today than in the past.