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Exam 3: Doing Business in Global Markets

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Question 181

True/False

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If two nations have a dispute over an international patent, the World Trade Organization may be asked to mediate and provide a decision within one year's time.

A) True
B) False

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Question 182

Multiple Choice

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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:

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.

E) A) and C)
F) All of the above

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Question 183

Multiple Choice

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An important principle for firms desiring to export is:

The same proven management styles used by companies in their domestic operations can be employed in their foreign subsidiaries.

Profitable opportunities in global markets are diminishing for small and medium-sized businesses.

In any given year, the United States' cash outflow to other nations exceeds its cash inflow from other nations.

Although embargos are enacted upon both imports and exports, this form of trade protectionism is often the result of:

One advantage of licensing is the relatively low cost of entering a foreign market.

One advantage of franchising is that the parent corporation does not need to concern itself with adapting to the culture of another country.

Nike _________________ its products in foreign countries, where labor is cheap and production sites are owned by other companies. This strategy allows Nike to experiment in new markets without incurring large start-up costs involved with building their own production facilities.

A favorable balance of trade occurs when the value of:

France, Italy, Denmark, and Luxembourg are all members of the EU. Which of the following statements is an accurate description of trade between these nations?

When it comes to ethics, successful American businesspeople are encouraged to follow the policy of "when in Rome, do as the Romans."

A complete ban on the import or export of a specific good is called an embargo.

You sell paint products and accessories for painters. Recently, you were in contact with merchants from India who have taken an interest in your products and are willing to talk more about entering into a contractual deal to purchase your goods. This opportunity may be just the thing to get your business out of its slump, because you learned from your Introduction to Business class that very few barriers exist between U.S. and Indian markets.

In 1999, the European Economic Community adopted a common currency known as the euro.

Granting a foreign company the right to manufacture your product or to use your firm's trademark in return for a fee is called:

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