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Exam 3: Doing Business in Global Markets

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Question 81

True/False

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The Ozark Bike Company recently entered into an agreement with a large Japanese retailer to distribute its bicycles in Japan. Ozark Bike Company sees itself in a favorable position because the yen is gaining strength compared to the U.S. dollar making it cheaper for Japanese customers to buy U.S. products.

A) True
B) False

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Question 82

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

A) True
B) False

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Question 83

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

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

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

The nation of Taubestan requires that all imported beverages be contained in clear, well-labeled recyclable glass bottles. Several international beverage manufacturers refuse to trade with the country because the cost of glass bottles cuts into their profits to the point where it just isn't worth it. Taubestan has created a nontariff barrier.

Dumping is the practice of selling products in foreign markets at lower prices than what domestic firms are charging for the same product.

Don was messing around with his new tablet and checking out its features, but he was struggling. His warranty gave him three months of free technical support, so he quickly called the tech support number. After waiting on hold, he finally got through to a technician but though they were both speaking English, the technician's accent was difficult for Don to understand. As he listened carefully to every word the technician provided, he thought to himself, "There are some pros and cons to outsourcing. I'm not certain the service is adding value for the customer." Don was correct.

________ is buying products from another country.

Workers in the nation of Brotherton expect managers to forcefully tell employees what to do, how to do it, and when. On the other hand, American employees prefer to take part in workplace decision making. This ________ difference between Brotherton workers and American workers represents a management challenge for firms trading in the global market.

A United States company won a large contract with a company in Sri Lanka by giving government and company representatives American cars. The company also promised to provide monetary gifts in exchange for the business. Fortunately, U.S. law, under the Foreign Corrupt Practices Act, permits U.S. companies to operate in this manner.

Contract manufacturing requires heavy start-up costs by the domestic company.

One of the purposes of Export Assistance Centers is to

Countertrading is a form of exchange where firms will put certain products "on the counter" offering them to foreign customers at a cheaper price than what they would offer them to domestic customers.

A common market is a group of countries that have no internal tariffs among member nations, yet have a common external tariff.

Franchising is popular both domestically and internationally.

Often, the strategy of common markets is debatable, but GATT is certain that such alliances do not prohibit individual member nations from expanding globally.

Your college career is coming to an end and you're trying to decide on the last two business electives to take. You are leaning toward international marketing and international financing because you recall reading that Forrester Research estimates millions of jobs will move to global markets in the next 10 years.

The common market arrangement that groups Brazil, Argentina, Paraguay, Uruguay, Bolivia, Chile, Colombia, Ecuador, Peru, and Suriname is called

A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.