Exam 3: Doing Business in Global Markets

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

A disadvantage of creating a foreign subsidiary is the loss of control over technology and expertise used in the production of the product.

The purchase of U.S.-based Anheuser-Busch by Belgian brewer InBev is an example of foreign direct investment.

As a form of franchising, sovereign wealth funds are getting very little attention as a strategy for doing business in foreign markets.

Game Guys, Inc. needed a special silicon substrate. The company executives knew a new start-up in India, Silicon Sisters, Inc., was the best in the world at efficiently mass-producing the product. The Indian company needed MSG (metallurgical grade silicon) in order to make the substrate, 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 Silicon Sisters if it could get a certain quantity of gaming hardware from Game Guys. This beneficial exchange is described as

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

With GDP of over $658 billion, the common market known as COMESCA is

Absolute advantage is the basis for most global trade today.

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

Firms with a physical presence in several different nations are considered multinational corporations.

A favorable balance of trade occurs when the value of

If two nations have a trade dispute, the World Trade Organization may be asked to mediate and provide a decision within one year's time.

A country has an absolute advantage if the production of a specific product is more efficient than all other nations.

Sociocultural differences that affect global businesses include customs, language, and religion.

Why does it make sense to trade with other nations?

Which of the following represents the value of one nation's currency relative to the currencies of another country?

The company was informed by the Taiwanese Ministry of Trade that they could only export 1.1 million pairs of eyeglasses to the Taiwanese market during a given year. The Taiwanese have imposed a(n)

________ differences such as insufficient electrical power and transportation systems can present special problems for U.S. firms when attempting to enter global markets.

The global market is ________ potential customers.

Fred Bergsten of the Institute for International Economics estimates that every $1 billion of U.S. exports