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Exam 3: Doing Business in Global Markets

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Question 91

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Global trade is the exchange of goods and services between countries.

A) True
B) False

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Question 92

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Under a system of floating exchange rates, the value of a country's currency is determined by government regulation.

A) True
B) False

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Question 93

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Since the approval of the North American Free Trade Agreement (NAFTA), the value of U.S. exports to Mexico and Canada has increased.

A(n) ________ refers to a complete ban on importing or exporting of products from a specific country.

A nation has a ________ in the production of a good or service if it can produce that good or service more effectively or efficiently than it can produce other goods.

Products made in Canada are sold in the U.S. because these two nations agree to eliminate economic and political barriers between nations. They participate in free trade.

Laura is typical of many U.S. businesspeople. She feels the U.S. culture defines the model for the rest of the world, and that the "American way" of doing things is the best. Laura is guilty of

With respect to free trade, many American citizens prefer "fair trade, not free trade."

Workers in the nation of Brotherton expect managers to forcefully tell employees what to do, how to do it, and when. On the other hand, American employees prefer to take part in workplace decision making. This ________ difference between Brotherton workers and American workers represents a management challenge for firms trading in the global market.

EBL Industries ________ its products in foreign countries, where labor is less expensive and production sites are owned by other companies. This strategy allows EBL Industries to experiment in new markets without incurring the large start-up costs involved with building its own production facilities.

Dumping is the practice of selling products in foreign markets at lower prices than what domestic firms are charging for the same product.

Exporting is the selling of products to another country.

Having recently found sources of oil on their own land, the newly established nation of Brotherton enacted a tariff on imported petroleum in order to raise money for their new government. This trade restriction is an example of a ________ tariff.

International trade is not limited to multinational corporations. Small businesses do about 30% of all exporting out of the U.S.

One advantage of offshore outsourcing is that consumers benefit from lower prices.

Define offshore outsourcing and explain its pros and cons.

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

If a protective tariff is placed on an imported product, the added cost will go to the government.

Another name for a common market is

The main goal of the General Agreement on Tariffs and Trade (GATT) was to reduce trade restrictions among world nations.