Question 1

While franchising is popular in the United States, it is not an accepted strategy for firms in the global market.

Accepted Answer

A) True 
 B)False

Question 2

Currency fluctuations can be an advantage to firms trading in the global market.

Accepted Answer

A) True 
 B)False

Question 3

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.

Accepted Answer

A) True 
 B)False

Question 4

India and Russia are emerging markets that present enormous business opportunities.

Accepted Answer

A) True 
 B)False

Question 5

Telewhiz, Inc., just contracted with a firm in the Philippines to provide customer service for its smartphone customers. Although there were cheaper labor markets that Telewhiz could have tapped, customers have reported that they understand English-speaking Filipino people better than English-speaking people in other countries. As an outsourcing option, it is a good compromise.

Accepted Answer

A) True 
 B)False

Question 6

Johanna Breese, a graduate student from Carnegie Mellon, connected with the culture of Madagascar when she created lamba hoany (a native garment) with artful messages to save the more than 150 rare species of animals that inhabit Madagascar. In contrast to many Americans trying to do business abroad, Johanna successfully adapted her message to the native culture when she imprinted it on the native garment.

Accepted Answer

A) True 
 B)False

Question 7

The U.S. and China continue to spar over sociocultural issues, such as human rights, and economic and financial issues, such as the value of the Chinese yuan against the U.S. dollar. U.S. diplomats assert that these differences continue to bolster China's favorable balance of trade and increase the U.S. trade deficit. The trade protectionist policy exhibited by the Chinese is similar to an economic policy known as ________ that was followed during the seventeenth and eighteenth centuries. This policy resulted in a flow of money to the country that sold the most globally.

Accepted Answer

A)  trade embargoing 
B)  countertrading 
C)  profiteering 
D)  mercantilism

Question 8

Under the floating exchange rate system, the value of a country's currency is determined by

Accepted Answer

A)  the monetary authorities of that country. 
B)  the United Nations Committee on Floating Currencies. 
C)  the currency's supply and demand in the global market. 
D)  countertrading.

Question 9

A major goal of the Mercosur common market consisting of several South American countries is to better expand the movement of goods and services.

Accepted Answer

A) True 
 B)False

Question 10

Climate and terrain in several South American countries are conducive to growing coffee beans efficiently. While other countries have the ability to grow the bean, they are not as efficient and effective because of short seasons and climate concerns. This fact would lead you to believe that these South American countries have a(n) ________ advantage in the production of coffee.

Accepted Answer

A)  comparative 
B)  absolute 
C)  unprotected 
D)  progressive

Question 11

Opportunities for college graduates in international business continue to decrease, since it is too expensive to travel abroad.

Accepted Answer

A) True 
 B)False

Question 12

Shortly after graduating college, Roberto took his place in his family's company in Miami. Roberto's father and uncle started a company that buys bauxite, copper, and other minerals from Chile, and brings them into the U.S. Roberto brokers trades with mines in Chile. Roberto is a(n)

Accepted Answer

A)  exporter. 
B)  quota manager. 
C)  importer. 
D)  domestic trader.

Question 13

The purpose of enacting some type of protectionist policy toward foreign goods is to limit competition from abroad, particularly when the country has domestic companies that produce and sell the same products and services.

Accepted Answer

A) True 
 B)False

Question 14

The motivation behind trade protectionism is

Accepted Answer

A)  to limit accelerated growth of GDP that would cause inflation to escalate. 
B)  to facilitate the belief that it will keep one's nation disease free. 
C)  to increase the positive economic consequences of one's trade position. 
D)  solely for the protection of nuclear attack.

Question 15

An American company recently won a huge contract with a company in Indonesia, by gifting the Indonesian government officials with American cars and an assurance of monetary gifts. Clearly, this procedure

Accepted Answer

A)  violates the Foreign Corrupt Practices Act. 
B)  violates the Fair and Balanced Competitive Practices Act. 
C)  defines the common business practices of the foreign nation and should be respected. 
D)  defines the terms of the business contract, and as long as both parties sign, the agreement is binding.

Question 16

Global markets consider the U.S. dollar to be a weak currency.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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

Question 18

One objective of NAFTA is to

Accepted Answer

A)  increase trade barriers between the countries involved. 
B)  decrease investment opportunities in the countries involved. 
C)  promote conditions of fair competition for the three trading partners. 
D)  improve working conditions in Central America.

Question 19

Last year, the nation Hasalot reported that it had a favorable balance of trade even though it imported $9 billion worth of goods. This indicates that Winstone

Accepted Answer

A)  exported $9 billion worth of goods. 
B)  exported more than $9 billion worth of goods. 
C)  overpriced the value of its exports. 
D)  exported less than $9 billion worth of goods.

Question 20

One reason countries trade with other countries is that even technologically advanced nations cannot produce all the products their people want and need.

Accepted Answer

A) True 
 B)False

Exam 3: Doing Business in Global Markets

While franchising is popular in the United States, it is not an accepted strategy for firms in the global market.

Currency fluctuations can be an advantage to firms trading in the global market.

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.

India and Russia are emerging markets that present enormous business opportunities.

Under the floating exchange rate system, the value of a country's currency is determined by

A major goal of the Mercosur common market consisting of several South American countries is to better expand the movement of goods and services.

Opportunities for college graduates in international business continue to decrease, since it is too expensive to travel abroad.

Shortly after graduating college, Roberto took his place in his family's company in Miami. Roberto's father and uncle started a company that buys bauxite, copper, and other minerals from Chile, and brings them into the U.S. Roberto brokers trades with mines in Chile. Roberto is a(n)

The purpose of enacting some type of protectionist policy toward foreign goods is to limit competition from abroad, particularly when the country has domestic companies that produce and sell the same products and services.

The motivation behind trade protectionism is

An American company recently won a huge contract with a company in Indonesia, by gifting the Indonesian government officials with American cars and an assurance of monetary gifts. Clearly, this procedure

Global markets consider the U.S. dollar to be a weak currency.

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

One objective of NAFTA is to

Last year, the nation Hasalot reported that it had a favorable balance of trade even though it imported $9 billion worth of goods. This indicates that Winstone

One reason countries trade with other countries is that even technologically advanced nations cannot produce all the products their people want and need.