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Exam 3: Doing Business in Global Markets

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Question 171

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A Mexican firm has agreed to trade petroleum to an American importer in return for U.S.made computers.This arrangement is an example of:

A) A letter of credit arrangement.
B) A nontariff trade.
C) Arbitrage.
D) Barter.

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Question 172

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Trade protectionism:

A) Always leads to a favorable balance of trade.
B) Is the use of government regulations to limit the import of goods and services.
C) Is not a barrier to global trade.
D) Encourages dumping by foreign industries in the home country.

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Question 173

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A United States firm recently won a large contract with a company in Malaysia,by providing the foreign nation's government officials with American cars and a promise of additional monetary gifts.Clearly,this procedure:

Successful multinational corporations disregard cultural differences between countries where they own property and perform business transactions.

One characteristic of an international joint venture is all parties sharing the risk of a major project. Joint ventures create a partnership in which companies join to undertake a major project.Benefits of international joint ventures are (1)shared technology and risk; (2)shared marketing and management expertise;and (3)entry into markets where foreign companies are often not allowed unless goods are produced locally.

The benefits of free trade agreements and common markets are hotly debated by economists.Some think they are good for trade;others believe they are detrimental to developing nations.

When foreign firms build production facilities in the United States,they are engaging in:

According to the Legal Briefcase box,titled,"NAFTA or SHAFTA?":

Which of the following is considered when calculating a country's balance of payments?

Last year,the nation of Tigerland imported goods totaling $500 million and exported products totaling $386 million.Tigerland experienced a(n) :

Monique's Unique Tile Boutique offers decorative tile from around the world.The owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer.Monique participates in ____________.

Describe and provide examples of four different strategies for reaching global markets.

While the U.S.is a large exporter,Germany exports a higher percentage of their GDP.

Export trading companies assist businesses in reaching buyers,and dealing with customs,documentation,and payment.

Recently a news article described the pirating of music originally recorded by popular celebrities in the U.S.It seems that a recording made in the U.S.can be copied within a couple of hours and sold abroad.The U.S.government is able to readily prosecute foreign companies involved in these illegal actions. U.S.patent and copyright laws do not transcend international borders.What the U.S.may consider a patent or copyright infringement may not be considered as such in a foreign country.

The balance of payments measures the inflows and outflows of money from tourism,foreign aid,military expenditures and foreign investments as well as flows resulting from exports and imports.

The common market arrangement that groups Brazil,Argentina,Paraguay,Uruguay,Chile,and Bolivia is called the:

Absolute advantage is the basis for most global trade today.

According to the theory of comparative advantage,a country should buy from other countries those goods it produces most efficiently. The theory of comparative advantage states that a country should produce and sell to other countries those products that it produces most effectively and efficiently.Conversely,a country should buy those products produced more efficiently by other countries.

The country of New Florentina requires that all imported beverages be contained in clear,well-labeled recyclable glass bottles.Several beverage producers refuse to trade with New Florentina because the cost of glass bottles cuts into their profits to the point where it just isn't worth it.New Florentina has created a nontariff barrier. Nontariff barriers are not as specific or formal as tariffs.They are usually restrictive standards that a country places on imported products.The standards help to restrict trade with foreign companies.