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Exam 3: Doing Business in Global Markets

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Question 61

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_______ is a complex form of bartering in which several countries may be involved, each trading products and services for the products and services of another country.

A) Venture bartering
B) Global monetarism
C) Countertrading
D) Global counter-exchange

E) A) and B)
F) A) and C)

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Question 62

Multiple Choice

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If global trade experts predict that the value of the dollar will soon fall, it will result in:

A) both the prices of imported goods rising and prices of U.S. goods sold overseas rising, as well.
B) prices of imported goods rising, but prices of U.S. goods sold overseas falling.
C) prices of imported goods falling and prices of U.S. goods sold overseas falling, as well.
D) prices of imported goods falling, but prices of U.S. goods sold overseas rising.

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

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Question 63

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Through licensing, domestic firms give foreign manufacturers/producers the right to produce their product and use their trademark in exchange for royalties.

Adam's Apple Corporation ships all of the apples from its orchards in Washington to a single buyer in Japan. The firm's entire profits are derived from this international transaction. Adam's Apple Corporation:

The purpose of forming strategic alliances is to share the costs of marketing new products and services to several countries.

The impetus behind trade protectionism is:

China has approximately 95% of the world's Neodymium, a rare earth metal used in consumer and military electronics and contemporary technology. The fact that this is a necessary metal for the production of many products we use today-everything from smartphones to smart bombs-means China can almost name its price! Which of the following describes this situation?

In southern California, there are banana plantations. These plantations cannot produce all the bananas consumed by persons in the U.S. The fact that the U.S. grows and sells bananas gives it a comparative advantage in bananas. It is not an absolute advantage and that is why we choose to import bananas from other countries, as well.

The only deposits of a rare and sought-after mineral known as Yuksporite are found in Russia. Since no other nation has deposits of Yuksporite, Russia has a(n) __________ in this mineral.

Global trade with China is:

Mini-Case Since he was five years old, Rhett Tenna struggled with poor eyesight. He suffered through all the names that went along with wearing eyeglasses for most of his young life. Rhett eventually switched from traditional eyeglasses to contacts, but he always wondered why glasses were considered to be "ugly" and not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with high fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames. A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"! -Although he is confident of success, Rhett is concerned that social, cultural and economic differences in other nations may create some problems. He believes he should adapt his approach to these differences rather than trying to force the "American way" on foreign consumers. Rhett's attitude suggests that he wants to avoid a(n) ___________ approach to business.

An import quota is a complete ban on the import or export of certain products.

If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a:

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

The __________ is the difference between money flowing into a country from exports, and money leaving the country for imports, plus money flows coming from other factors such as tourism, foreign aid, military expenditures, and foreign investment.

Efficient currency exchange markets have eliminated countertrade in global business transactions.

Which of the following represents the value of one nation's currency relative to the currencies of another country?

Global markets rely on the U.S. dollar as the universal currency.

Any corporation that exports at least 50% of its total output can be classified as a multinational corporation.

A disadvantage of licensing is: