Exam 16: International Pricing Strategy

A typical countertrade exchange today would involve a buyer from a developed industrialized, country and a seller from a developing country where hard currency is scarce and tightly controlled by national institutions.

What are countervailing duties?

When the World Trade Organization determines that price discrimination did indeed occur and that a local industry was injured by the dumping activity, governments are entitled to impose _________________________ on the merchandise.

The European Commission, in charge of anti-dumping regulation in the European Union, requires a vote of the Council of Ministers for action against dumping activity and other unfair trade practices.

Diverting products purchased in a low-price market to other, higher-priced, markets by means of a distribution system not authorized by the manufacturer results in the creation of _________________________.

Which of the following is not a disadvantage of countertrade?

Governments regulate prices charged by multinational firms.

Companies can and often do price themselves out of the market in certain countries. To avoid this, they must shift production to a ____________________, ____________________ country.

McDonnell Douglas sold DC-9s to the former Yugoslavia. To secure the order, McDonnell Douglas agreed to help sell products sourced in the former Yugoslavia to buyers in the United States to generate capital to help finance the purchase of the passenger planes. Of which type of countertrade is this an example?

Discuss the advantages of countertrade.

Pricing products only minimally above cost does NOT constitute dumping.

Why might a manufacturer charge different prices in different markets for the same product?

Which of the following justifies setting prices lower in the home country, compared to company prices in the international market?

Which government branch is responsible for determining whether products are dumped on the U.S. market?

Approximately how many commercial trade exchanges exist in the United States?

In a clearing agreement, when an imbalance occurs and one country owes money to the other, _________________________ are paid in an agreed upon hard currency.

Cost-based transfer pricing sets the price based on the cost incurred by the company to make the product.

Which statement regarding countertrade is true?

The United States Department of State is the government branch responsible for determining whether products are dumped on the U.S. market.

In Romania and Turkey, it is a good idea to price product using even pricing.