Question 1

Fred Bergsten of the Institute for International Economics estimates that every $1 billion of U.S. exports

Accepted Answer

A)   replaces 250 service sector jobs with 25 manufacturing jobs in the U.S.
B)   causes lost revenues for the U.S. federal government.
C)   results in reduced profits for U.S. businesses.
D)   generates over 7,000 jobs in the U.S.E) A) and C)
F) A) and B)

Question 2

The theory of ________ 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) C) and D)
F) B) and D) A

Question 3

A firm may export everything it produces overseas and still not be considered a multinational.

Accepted Answer

A) True 
 B)False

Question 4

Last year, the island nation of Winstone imported goods totaling $300 million and exported products totaling $86 million. Tigerland experienced a(n)

Accepted Answer

A)   unfavorable balance of trade.
B)   favorable balance of trade.
C)   trade surplus.
D)   benefit from membership in a free trade zone.E) All of the above
F) A) and D)

Question 5

The United States currently enjoys a favorable balance of trade with the rest of the world.

Accepted Answer

A) True 
 B)False

Question 6

A devaluation of the U.S. dollar would make American goods cheaper to foreign buyers.

Accepted Answer

A) True 
 B)False  True

Question 7

Jessie has crafted a new technique for drying flowers that still keeps the vibrant color of fresh flowers. After unsuccessfully trying to sell the dried flowers at her shop, Flowers and Weeds, she discovered that although dried flowers are out of style in the U.S., these flower arrangements are still highly sought after in several nations abroad. It is difficult to preserve the ingredients that go into her formula for more than a month. She decides to partner with firms in Europe and Asia to make and sell her formula, but you suggest she license it to foreign companies and agree to royalties when they create the formula and sell it. Your advice makes better sense.

Accepted Answer

A) True 
 B)False

Question 8

Technological differences can prevent some companies from successfully doing business abroad.

Accepted Answer

A) True 
 B)False

Question 9

Some governments initiate restrictive standards that detail exactly how a product must be sold in a country. Trade experts call these restrictions

Accepted Answer

A)   monetary tariffs.
B)   countertrade policies.
C)   nontariff barriers.
D)   export constraint policies.E) None of the above
F) A) and C)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

An unfavorable balance of trade occurs when the value of

Accepted Answer

A)   imports equals the value of exports.
B)   imports exceeds the value of exports.
C)   cash inflows is equal to the value of cash outflows.
D)   exports exceeds the value of imports.E) None of the above
F) B) and C)

Question 12

________ are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.

Accepted Answer

A)   Export trading companies
B)   Licensees
C)   Strategic alliances
D)   KeiretsusE) A) and B)
F) A) and C)

Question 13

________ 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) A) and D)

Question 14

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n)

Accepted Answer

A)   export trading company.
B)   international brokerage house.
C)   keiretsu.
D)   global trade bank.E) A) and C)
F) C) and D)

Question 15

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 the creation of U.S. jobs.E) C) and D)
F) None of the above

Question 16

Many students in studying abroad programs at U.S. colleges and universities have discovered profitable opportunities by importing goods from their home countries into the United States.

Accepted Answer

A) True 
 B)False

Question 17

An exchange rate is the value of one nation's currency relative to the currencies of other nations.

Accepted Answer

A) True 
 B)False

Question 18

Ethnocentricity means

Accepted Answer

A)   "when in Rome, do as the Romans!"
B)   you believe your culture is superior to others.
C)   cultural awareness.
D)   a trend toward accepting other cultures and trying various foods and religions to see if they fit your lifestyle.E) None of the above
F) A) and D) B

Question 19

Which of the following statements is the most accurate observation regarding multinational corporations?

Accepted Answer

A)   Rather than manage manufacturing and marketing facilities overseas, most multinational corporations attempt to enter global markets by exporting domestically produced goods.
B)   Most multinational corporations are small- to medium-sized firms.
C)   Because of political and economic concerns, most multinational corporations choose to ignore investment opportunities in China and Russia.
D)   Only those firms with a physical presence in different nations qualify as multinational corporations.E) All of the above
F) B) and D)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 3: Doing Business in Global Markets

Fred Bergsten of the Institute for International Economics estimates that every $1 billion of U.S. exports

Correct Answer
verified

The theory of ________ 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 Answer
verified
A

A firm may export everything it produces overseas and still not be considered a multinational.

Correct Answer
verified

Last year, the island nation of Winstone imported goods totaling $300 million and exported products totaling $86 million. Tigerland experienced a(n)

Correct Answer
verified

The United States currently enjoys a favorable balance of trade with the rest of the world.

Correct Answer
verified

A devaluation of the U.S. dollar would make American goods cheaper to foreign buyers.

Correct Answer
verified
True

Correct Answer
verified

Technological differences can prevent some companies from successfully doing business abroad.

Correct Answer
verified

Some governments initiate restrictive standards that detail exactly how a product must be sold in a country. Trade experts call these restrictions

Correct Answer
verified

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

Correct Answer
verified

An unfavorable balance of trade occurs when the value of

Correct Answer
verified

________ are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.

Correct Answer
verified

________ 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 Answer
verified

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n)

Correct Answer
verified

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 Answer
verified

Many students in studying abroad programs at U.S. colleges and universities have discovered profitable opportunities by importing goods from their home countries into the United States.

Correct Answer
verified

An exchange rate is the value of one nation's currency relative to the currencies of other nations.

Correct Answer
verified

Ethnocentricity means

Correct Answer
verified
B

Which of the following statements is the most accurate observation regarding multinational corporations?

Correct Answer
verified

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

Correct Answer
verified

Exam 3: Doing Business in Global Markets

Fred Bergsten of the Institute for International Economics estimates that every $1 billion of U.S. exports

Correct AnswerverifiedShow Answer

The theory of ________ 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 AnswerverifiedA

A firm may export everything it produces overseas and still not be considered a multinational.

Correct AnswerverifiedShow Answer

Last year, the island nation of Winstone imported goods totaling $300 million and exported products totaling $86 million. Tigerland experienced a(n)

Correct AnswerverifiedShow Answer

The United States currently enjoys a favorable balance of trade with the rest of the world.

Correct AnswerverifiedShow Answer

A devaluation of the U.S. dollar would make American goods cheaper to foreign buyers.

Correct AnswerverifiedTrue

Correct AnswerverifiedShow Answer

Technological differences can prevent some companies from successfully doing business abroad.

Correct AnswerverifiedShow Answer

Some governments initiate restrictive standards that detail exactly how a product must be sold in a country. Trade experts call these restrictions

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An unfavorable balance of trade occurs when the value of

Correct AnswerverifiedShow Answer

________ are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.

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

A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n)

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

Many students in studying abroad programs at U.S. colleges and universities have discovered profitable opportunities by importing goods from their home countries into the United States.

Correct AnswerverifiedShow Answer

An exchange rate is the value of one nation's currency relative to the currencies of other nations.

Correct AnswerverifiedShow Answer

Ethnocentricity means

Correct AnswerverifiedB

Which of the following statements is the most accurate observation regarding multinational corporations?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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A

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True

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B

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