Exam 5: The Global Context of Business

What is foreign direct investment?

Investment Canada's mandate is to focus on the promotion of Canadian goods to other countries. to focus on attracting foreign investment to Canada. to track investment money to oversea banks. to focus on aiding Canadian businesses in collecting money from their customers in foreign countries. to promote the investment of Canadian dollars into foreign business operations.

With respect to exchange rates and competition, it is correct to say that companies that conduct international operations do not have to worry about the effect of exchange-rate fluctuations on competition because the accounting department does the conversions. as the value of a country's currency falls, its balance of trade becomes less favourable. as the value of a country's currency falls, there is an increased incentive for foreign companies to ship products into the domestic market. Canadian firms can deal with a stronger Canadian dollar by increasing the efficiency their operations. all of these are correct.

Over the past few decades, Canada has generally exported more to the United States than it imports from the United States.

The aim of NAFTA is to create a free trade area for Canada, the U.S., and Western Europe.

How might the international market specifically affect the success of a local coffee shop in Saskatoon?

Which of the following is correct with respect to absolute and comparative advantage? Brazilian coffee beans are a good example of comparative advantage. Absolute advantage exists when a country can produce something more cheaply and/or of higher quality than the next three most efficient countries. A country has a comparative advantage when it can produce a product more efficiently or better than most (but not all) other countries. All countries have a comparative advantage in some products. All of these are correct.

Canadian companies seeking more involvement in international business generally do not choose licensing arrangements because they are too expensive.

Imports are services that are created in Canada and sold abroad. products that are made or grown abroad and sold in Canada; services cannot be imported. goods and services that are made or grown in Canada and sold abroad. products that are made or grown in Canada and sold abroad; services cannot be imported. goods and services that are made or grown abroad and sold in Canada.

The North American Free Trade Agreement has led to increases in business growth in Canada.

Which of the following is an example of importing a service? A Canadian purchases a ticket to see a performance by a Spanish singer A Toronto taxi driver takes an American from Pearson airport to a downtown Toronto hotel A Canadian engineer designs a bridge to be built in Australia An accountant does financial statements for a Mexican company A Canadian lawyer goes to California to work on a litigation case

The annual volume of world trade is about $100 billion. $3 trillion. $875 billion. $15 trillion. $8 trillion.

What are local-content laws? What do they usually imply?

Which type of firm is more likely to have its board of directors composed of people from many different nations? Joint venture Multinational Exporter Importer Purely domestic

Asia-Pacific is not an important source of competition for North American firms.

If the Canadian dollar becomes weak compared to the Japanese yen, which of the following is likely to occur? Demand for goods would be unaffected by currency changes Japanese products would become cheaper in Canada It would take fewer dollars to buy the same number of yen Canadian products would become less expensive in Japan Japanese demand for goods from Canada would fall

A firm that buys products made in another country for distribution and sale in its own country is a multinational firm. a joint venture. an exporter. an international firm. an importer.

In some countries, it may be legal to bribe businesses and government officials, but this practice is illegal in Canada. This barrier to international trade is known as imposing tariffs. quotas. local content laws. business practice laws. cartelling.

While international firms conduct a significant portion of their business abroad, their primary focus remains on the domestic market.

What are some advantages for businesses that engage in strategic alliances?