Question 1

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.

Accepted Answer

A) True 
 B)False

Question 2

The North American Free Trade Agreement (NAFTA) requires member nations to negotiate uniform trade agreements with nonmember nations.

Accepted Answer

A) True 
 B)False

Question 3

states that a nation should produce and sell goods to other countries that it produces most efficiently, and buy goods from other nations that they produce more efficiently.

Accepted Answer

A)  comparative advantage
B)  absolute advantage
C)  mercantilism
D)  bilateral advantageE) None of the above
F) A) and B)

Question 4

As a business strategy, the strategy behind "dumping" is to .

Accepted Answer

A)  gain a foothold in a new market
B)  better utilize e-commerce opportunities
C)  avoid trade protectionist laws
D)  achieve eligibility for foreign aidE) A) and B)
F) A) and C)

Question 5

The objectives of the North American Free Trade Agreement (NAFTA) include allowing free immigration between Canada, Mexico and the U.S.

Accepted Answer

A) True 
 B)False

Question 6

According to current U.S. laws, American firms are prohibited from participating in joint ventures with foreign firms.

Accepted Answer

A) True 
 B)False

Question 7

With all its perception of opportunity, the expansion of global trade is still plagued by terrorism, nuclear proliferation, rogue states, and other issues.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following best describes the impact of the Internet on global market transactions?

Accepted Answer

A)  The use of email has minimized the risk of expropriation of a firm's assets by a foreign government.
B)  The Internet allows new competitors entering a foreign market to bypass the traditional distribution channels.
C)  Legal and regulatory forces are ignored because Internet transactions are difficult to police.
D)  Internet chat rooms allow for an increased use of bartering as a method of resolving international payment problems.E) A) and B)
F) A) and C)

Question 9

Which of the following terms describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?

Accepted Answer

A)  Culture
B)  Ethnocentricity
C)  Institutional society
D)  Social myopiaE) A) and C)
F) B) and C)

Question 10

A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs) . Why do these investments by governments with surplus cash flows worry trade experts?

Accepted Answer

A)  SWFs invest in high risk start-ups with no proven history of producing goods and services that developing or developed countries need. They may likely undermine the years of development of growing economies.
B)  SWFs have a greater risk of going bankrupt than other investments because governments are not good at running businesses.
C)  Some fear that governments investing their SWFs in large firms may gain control of natural resources, sensitive technologies, and the decision making of management.
D)  Some trading experts believe that SWFs are supported by terrorist organizations, and their strategy is an indirect way to undermine theE) All of the above
F) B) and D)

Question 11

After finishing college, Nathan joined his uncle's company in Miami, FL, a(n)  of bauxite, copper, and other minerals from the Chile. Everyday, he brokers trades with mines in Chile to buy and transport these minerals into the U.S.

Accepted Answer

A)  exporter
B)  quota manager
C)  importer
D)  domestic traderE) A) and B)
F) All of the above

Question 12

differences such as insufficient electrical power and transportation systems can present special problems for U.S. firms when attempting to enter global markets.

Accepted Answer

A)  Physical and environmental
B)  Legal and regulatory
C)  Economic
D)  GovernmentalE) C) and D)
F) A) and B)

Question 13

Firms with a physical presence in several different nations are considered multinational corporations.

Accepted Answer

A) True 
 B)False

Question 14

Besides cost constraints, Exporters often face additional challenges. An example of a nontariff barrier was the former Japanese keiretsu:

Accepted Answer

A)  a nepotistic event that only permitted persons related to the owner to trade with a company.
B)  a trading system that made certain that if a Japanese firm was involved in a global trade, the Japanese firm would always benefit financially, and often to the detriment of the other party.
C)  a family of companies that joined together to forge semi-permanent ties with suppliers, customers, and distributors. It was difficult to break into the family.
D)  a shelter in Tokyo where all trading took place. If the trading partner refused to bring their products to the shelter, it could not successfully trade.E) A) and C)
F) B) and D)

Question 15

Many global economists believe the movement toward free trade areas and common markets is bad news for poorer countries that aren't members of a trading bloc.

Accepted Answer

A) True 
 B)False

Question 16

The value of goods imported into France exceeds the value of French exports. This indicates that France:

Accepted Answer

A)  Has an exchange rate decrease.
B)  Utilizes high tariffs.
C)  Has a budget deficit.
D)  Has a trade deficit.E) B) and C)
F) None of the above

Question 17

is an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell the parent company's product or service to others in a given territory in a specified manner.

Accepted Answer

A)  Franchising
B)  Contract manufacturing
C)  Import trading
D)  Export tradingE) A) and B)
F) B) and C)

Question 18

Restrictive standards that detail exactly how a product must be sold in a country are examples of protective tariffs.

Accepted Answer

A) True 
 B)False

Question 19

The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials, to secure business contracts is the .

Accepted Answer

A)  Foreign Corrupt Practices Act
B)  Foreign Anti-trust Act
C)  Multinational Collusion Law
D)  Global Good Conduct LawE) B) and D)
F) B) and C)

Question 20

In 2007, the government of Saudi Arabia invested about $900 billion in western companies. This strategic global investment was considered a way for Saudi Arabia to expropriate others from investing in its nation.

Accepted Answer

A) True 
 B)False

Exam 3: Doing Business in Global Markets

After finishing college, Nathan joined his uncle's company in Miami, FL, a(n) of bauxite, copper, and other minerals from the Chile. Everyday, he brokers trades with mines in Chile to buy and transport these minerals into the U.S.

Correct AnswerverifiedShow Answer

The value of goods imported into France exceeds the value of French exports. This indicates that France:

Correct AnswerverifiedShow Answer

Many global economists believe the movement toward free trade areas and common markets is bad news for poorer countries that aren't members of a trading bloc.

Correct AnswerverifiedShow Answer

The objectives of the North American Free Trade Agreement (NAFTA) include allowing free immigration between Canada, Mexico and the U.S.

Correct AnswerverifiedShow Answer

The North American Free Trade Agreement (NAFTA) requires member nations to negotiate uniform trade agreements with nonmember nations.

Correct AnswerverifiedShow Answer

Which of the following best describes the impact of the Internet on global market transactions?

Correct AnswerverifiedShow Answer

Which of the following terms describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?

Correct AnswerverifiedShow Answer

Restrictive standards that detail exactly how a product must be sold in a country are examples of protective tariffs.

Correct AnswerverifiedShow Answer

In 2007, the government of Saudi Arabia invested about $900 billion in western companies. This strategic global investment was considered a way for Saudi Arabia to expropriate others from investing in its nation.

Correct AnswerverifiedShow Answer

With all its perception of opportunity, the expansion of global trade is still plagued by terrorism, nuclear proliferation, rogue states, and other issues.

Correct AnswerverifiedShow Answer

According to current U.S. laws, American firms are prohibited from participating in joint ventures with foreign firms.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Besides cost constraints, Exporters often face additional challenges. An example of a nontariff barrier was the former Japanese keiretsu:

Correct AnswerverifiedShow Answer

A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs) . Why do these investments by governments with surplus cash flows worry trade experts?

Correct AnswerverifiedShow Answer

As a business strategy, the strategy behind "dumping" is to .

Correct AnswerverifiedShow Answer

states that a nation should produce and sell goods to other countries that it produces most efficiently, and buy goods from other nations that they produce more efficiently.

Correct AnswerverifiedShow Answer

is an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell the parent company's product or service to others in a given territory in a specified manner.

Correct AnswerverifiedShow Answer

The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials, to secure business contracts is the .

Correct AnswerverifiedShow Answer

differences such as insufficient electrical power and transportation systems can present special problems for U.S. firms when attempting to enter global markets.

Correct AnswerverifiedShow Answer

Firms with a physical presence in several different nations are considered multinational corporations.

Correct AnswerverifiedShow Answer

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