Exam 4: Competing in World Markets

The North American Free Trade Agreement (NAFTA) is a trade accord designed to reduce trade restrictions between the two neighboring countries of the United States and Canada.

National governments sometimes take deliberate action to devalue their currencies as a way to increase exports and stimulate foreign investment.

A country's trade balance is determined by comparing the total amount of its exports to its imports.

MATCHING Complete the following using the terms listed. -A country has _____ in the marketing of a product if it has a monopolistic position or it produces the product at the lowest cost.

An import quota is an example of a cultural barrier to global business.

A nation's exchange rate is the rate at which a nation's currency can be exchanged for the currencies of other nations.

A country with a balance of payments surplus means _____.

Each country's exchange rate is generally quoted in terms of another country's currency.

The United States has an international trade deficit in the sale and purchase of goods but a trade surplus in services.

Patents, trademarks, and intellectual property are important concerns in the _______environment.

MATCHING Complete the following using the terms listed. -_____ describes the fall of currency's value relative to other currencies.

The U.S. imports more services than it exports.

One advantage of using foreign subcontractors is that firms have almost total control over the business practices of their subcontractors.

All of the following are social and cultural barriers EXCEPT _____.

GDPs of China and India have decreased in recent years.

Distinguish between absolute advantage and comparative advantage. Provide an example of each.

When a company operates in other countries, it _____ risk.

_____limit the amounts of particular products that countries can import during specified time periods.

Last year, the United States imported less from Switzerland than it exported to Switzerland. Which of the following statements is true?

Film distributors sometimes change movie titles when marketing overseas due to language or slang barriers. Studios usually allow modification of its product as part of a _____ strategy.