Exam 5: The Global Context of Business

In which international structure would royalties likely be paid to the exporter? By a branch office Under a licensing arrangement By a subsidiary manufacturing plant In a joint venture In a strategic alliance

Marina Corp. wants to "go international," and has already determined that there is international demand for its products. What should the company do next? Determine if their products need to be modified to fit the foreign market Assess the business climate for reaction to foreign products Locate a local business to form a joint venture Conduct market research to determine potential sales Determine what competition would be encountered

The largest free marketplace in the world is NAFTA. the European Union. ASEAN. Mercosur. the Gulf Cooperation Council.

Fluctuations in exchange rates have no impact on the balance of trade.

According to the World Bank, ________ is considered an upper middle-income country. Singapore Hong Kong South Korea Argentina United Arab Emirates

Susie lives in Vancouver and has noticed that there seems to be a rising interest in goods from the Chinese culture. To take advantage of this she should explore subsidies. exporting. a trade deficit. foreign exchange. importing.

When the value of the Canadian dollar drops both our imports and our exports become more expensive. our imports become cheaper and our exports become more expensive. our imports become more expensive and our exports become cheaper. both our imports and our exports become cheaper. there is no change in the price of our imports and our exports.

The theory of national competitive advantage derives from all of the following conditions except demand conditions. supply conditions. strategies, structures, and rivalries. related and supporting industries. factor conditions.

As the value of a country's currency rises domestic companies will have a harder time selling their products in foreign markets. foreign companies will find it harder to sell their products in local markets. imports and exports will remain relatively constant. domestic companies will shift from the production of consumer goods to the production of industrial goods. all of these will happen.

What actions can a government take to discourage trade?

What are the three goals of the World Trade Organization (WTO)?

Which of the following is true about dumping? It means selling a product abroad for less than the comparable price at home. It benefits industries in countries where products are dumped. It is legal in Canada. The Canada Revenue Agency determined that cars produced by Toyota and Honda in Japan were being "dumped" in Canada. None of these are true.

What is a trade deficit?

The WTO has ruled that subsidies like those paid by the U.S. government to its cotton farmers are unreasonable.

Which of the following is correct with regard to the balance of trade and the balance of payments? If a country has a favourable balance of trade, it will also have a favourable balance of payments. The balance of payments is computed by dividing the value of a country's currency by the number of currency transactions that took place in the previous year. A country that imports more than it exports has a favourable balance of trade. Countries used to strive to have a favourable balance of trade, but governments no longer worry about that issue because of globalization. Canada has generally had a favourable balance of trade during the last few decades.

Quotas and tariffs can be used to control the export of goods and services as well as the import of goods and services.

Lite Foods is a producer of breakfast cereals such as oatmeal and cornflakes, and its products can be found in nearly all supermarkets across Canada. Lite Foods now has its sights set on international shores, specifically the large Chinese consumer market. Company executives are currently debating the optimal route for the firm to enter the market. Which of the following, if true, would weaken the argument for exporting the company's products to China? Lite Foods will have to make significant investments if it decides to enter a joint venture in China. Lite Foods would have to hire sales personnel from the host country if it opts for direct export. Lite Foods is a risk-averse organization. Lite Foods lacks Chinese market expertise and has not found reliable intermediaries with expertise in the market. Lite Foods will export its products as is, as more and more Chinese consumers are adopting breakfast cereals.

Arguments for and against protectionism include all of the following except tariffs and quotas protect domestic firms and jobs. tariffs and quotas reduce competition and drive up prices. tariffs and quotas adversely affect the exchange rate. that while some jobs and industries would be protected with tariffs and quotas, all countries would be better off without them as jobs in other industries would expand. tariffs and quotas are in response to actions of other governments.

What is an independent agent?

Why do foreign companies sometimes have problems complying with stringent and often changing regulations and bureaucratic obstacles? Because local government is out of control and trying to make a money grab Because the laws are stupid Because the government is trying to achieve cartel status for its domestic products Because of business practice laws Because the managers in the foreign firm are ill-informed