Question 1

__________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries.

Accepted Answer

A)  Comparative advantage
B)  Absolute advantage
C)  Complete advantage
D)  Dumping advantageE) A) and B)
F) A) and C)

Question 2

As the most powerful economy in the world,the United States does not need to concern itself with having an unfavorable balance of payments.

Accepted Answer

A) True 
 B)False

Question 3

Differences in electrical systems throughout the world can impair a U.S.firm's ability to sell its products to other countries.

Accepted Answer

A) True 
 B)False

Question 4

Free trade between nations generally results in:

Accepted Answer

A)  industrialized nations gaining at the expense of developing nations.
B)  an increase of jobs in developed nations.
C)  mutually beneficial exchange relationships.
D)  higher prices for imported goods.E) C) and D)
F) None of the above

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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 7

For a firm to be considered a multinational corporation,which of the following conditions must be true?

Accepted Answer

A)  It must have manufacturing facilities and a physical presence in several countries.
B)  Its marketing arm must be based at the company's world corporate headquarters.
C)  Stock ownership must be domestic.
D)  All transactions must be financed by the International Monetary Fund.E) B) and C)
F) A) and B)

Question 8

Pepsi Cola entered into a long-term contract with a South African beverage company.The contract calls for the South African firm to produce and market Pepsi Cola in South Afric A.Pepsi will receive royalties on each case of beverage sold.This is an example of:

Accepted Answer

A)  licensing.
B)  a joint venture.
C)  a foreign subsidiary.
D)  foreign direct investment.E) A) and B)
F) A) and C)

Question 9

Hennessy Hardware,a U.S.retailer,buys much of its inventory from Asian countries.Hennessy Hardware would benefit if the value of the dollar ________ relative to the currencies of the countries from which Hennessy imports.

Accepted Answer

A)  rose
B)  fell
C)  remained constant
D)  floated unpredictablyE) C) and D)
F) A) and B)

Question 10

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 11

Which of the following nations has joined the U.S. ,Japan,and the EU as a key driver of the world economy?

Accepted Answer

A)  Thailand
B)  Brazil
C)  Russia
D)  ChinaE) None of the above
F) B) and C)

Question 12

In order to level the playing field in trade between the U.S.and China,U.S.policymakers have called upon China's government to allow the Yuan China's currency) to float freely,as other world currencies.Through government regulation,China maintains an undervalued currency,which results in:

Accepted Answer

A)  More buying power for Chinese consumers who want to purchase U.S.goods and goods from other countries.
B)  Maintaining robust Chinese exports and a favorable balance of trade for China.
C)  Developing better relations with industrialized countries who want to increase the value of their exports.
D)  Stability and strength of the Chinese Yuan against the U.S.dollar and the euro.E) C) and D)
F) B) and D)

Question 13

The federal government created ___________ to help small and medium sized businesses get involved in exporting.

Accepted Answer

A)  the World Trade Organization
B)  Federal Export Loan Banks
C)  Export Assistance Centers
D)  the Federal Trade Promotion CommissionE) A) and D)
F) None of the above

Question 14

The United States imports more products and services than any nation in the world.

Accepted Answer

A) True 
 B)False

Question 15

Some firms will practice "dumping" in order to gain a foothold in a new market.

Accepted Answer

A) True 
 B)False

Question 16

One of the purposes of Export Assistance Centers is to:

Accepted Answer

A)  help multinational corporations reach agreements with foreign governments.
B)  provide subsidies to domestic firms hurt by dumping by foreign firms.
C)  provide trade-finance support for small and medium-sized firms involved in direct exporting.
D)  encourage domestic firms to become more competitive by forming keiretsu-like organizations,much like those found in Japan.E) None of the above
F) A) and B)

Question 17

Due to a nation's weak currency,people may have to fall back on ____________.

Accepted Answer

A)  exporting
B)  bartering
C)  importing
D)  factoringE) B) and C)
F) A) and D)

Question 18

When entering a foreign market,Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer.This is an example of:

Accepted Answer

A)  licensing.
B)  franchising.
C)  foreign direct investment.
D)  foreign subsidiaries.E) None of the above
F) A) and D)

Question 19

Sociocultural differences that affect global businesses include customs,language,and religion.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 3: Doing Business in Global Markets

Free trade between nations generally results in:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In order to level the playing field in trade between the U.S.and China,U.S.policymakers have called upon China's government to allow the Yuan China's currency) to float freely,as other world currencies.Through government regulation,China maintains an undervalued currency,which results in:

Correct AnswerverifiedShow Answer

Differences in electrical systems throughout the world can impair a U.S.firm's ability to sell its products to other countries.

Correct AnswerverifiedShow Answer

Hennessy Hardware,a U.S.retailer,buys much of its inventory from Asian countries.Hennessy Hardware would benefit if the value of the dollar ________ relative to the currencies of the countries from which Hennessy imports.

Correct AnswerverifiedShow Answer

As the most powerful economy in the world,the United States does not need to concern itself with having an unfavorable balance of payments.

Correct AnswerverifiedShow Answer

__________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries.

Correct AnswerverifiedShow Answer

The United States imports more products and services than any nation in the world.

Correct AnswerverifiedShow Answer

Which of the following nations has joined the U.S. ,Japan,and the EU as a key driver of the world economy?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The federal government created ___________ to help small and medium sized businesses get involved in exporting.

Correct AnswerverifiedShow Answer

Due to a nation's weak currency,people may have to fall back on ____________.

Correct AnswerverifiedShow Answer

When entering a foreign market,Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer.This is an example of:

Correct AnswerverifiedShow Answer

Sociocultural differences that affect global businesses include customs,language,and religion.

Correct AnswerverifiedShow Answer

Pepsi Cola entered into a long-term contract with a South African beverage company.The contract calls for the South African firm to produce and market Pepsi Cola in South Afric A.Pepsi will receive royalties on each case of beverage sold.This is an example of:

Correct AnswerverifiedShow Answer

Some firms will practice "dumping" in order to gain a foothold in a new market.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For a firm to be considered a multinational corporation,which of the following conditions must be true?

Correct AnswerverifiedShow Answer

One of the purposes of Export Assistance Centers is to:

Correct AnswerverifiedShow Answer

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