Exam 4: Business in a Global Economy

Localization is the movement toward a more interconnected and interdependent world economy.

Describe the theory of comparative advantage.

The president of the nation of Gamma asks you if the benefits of international trade are greater than the costs. You should answer that it depends on one's perspective.

Give an example of globalization of markets.

An agreement in which a domestic company's intangible property may be sold or made available to a foreign company in exchange for a royalty fee is called a(n)________.

Bribery is illegal all around the world.

An American executive who studies Italian before making a sales trip to Rome is showing consideration for ________.

The U.S. total ban on importing Cuban cigars is an example of an embargo.

If the value of the nation of Nu's exports is greater than the value of its imports, Nu has a trade ________.

When a country drops its rule preventing the imports of foreign-made cars, it is increasing globalization through technological innovation.

What does national security have to do with trade barriers?

Exchange rates can be manipulated or fixed by governments.

What is the term for the sale of a domestically produced good in a foreign market?

The value of a country's imports exceeds the value of its exports; therefore, the country has a trade deficit.

The country of Theta restricts the activities of foreign insurance companies in order to give Theta's insurance industry a chance to grow and develop. Theta's actions are an example of the ________ argument in favor of protectionism.

What would be the impact on U.S. exporters if the value of the U.S. dollar rose against the Mexican peso?

What would cause a nation to lose its comparative (or competitive)advantage?

Brazil has experienced rapid economic growth and increased sales of its products to other countries. This is an example of a(n)________.

The nation of Baa-Baa raises sheep relatively more efficiently than the nation of Snuggle. Snuggle weaves woolen blankets relatively more efficiently than Baa-Baa. Baa-Baa decides to specialize in sheep raising, to sell wool to Snuggle, and to buy blankets from Snuggle. Snuggle decides to specialize in blanket weaving, to sell blankets to Baa-Baa, and to buy wool from Baa-Baa. This international trade illustrates ________ advantage.

The assigning of certain tasks, such as production or accounting, to an outside company or organization is called outsourcing.