Question 1

Which method of entering the global marketplace would be most risky?

Accepted Answer

A)  Licensing 
B)  Direct investment 
C)  Contract manufacturing 
D)  Joint ventures 
E)  Exporting 
A)  Licensing 
B)  Direct investment 
C)  Contract manufacturing 
D)  Joint ventures 
E)  Exporting

Question 2

When Krispy Kreme decided to expand its operation internationally,it chose to first make its doughnuts available in Canada to minimize its risk.In accordance with the policy of risk minimization,the company sold the right to manufacture and sell its doughnuts to Canadians.In other words,Krispy Kreme used:

Accepted Answer

A)  contract manufacturing 
B)  direct investment 
C)  importing 
D)  a strategic alliance 
E)  licensing 
A)  contract manufacturing 
B)  direct investment 
C)  importing 
D)  a strategic alliance 
E)  licensing

Question 3

Which of the following is a criticism of multinational corporations?

Accepted Answer

A)  Multinationals sometimes support reactionary and oppressive regimes. 
B)  Multinationals require excessive employment information. 
C)  Countertrading 
D)  The transference of labor-intensive technology 
E)  Multinationals do not do enough to standardize their marketing mixes. 
A)  Multinationals sometimes support reactionary and oppressive regimes. 
B)  Multinationals require excessive employment information. 
C)  Countertrading 
D)  The transference of labor-intensive technology 
E)  Multinationals do not do enough to standardize their marketing mixes.

Question 4

Suppose three months ago the dollar price of a yen was $0.012.Today the dollar price of one yen is $0.018.If you are in the market for a brand new Honda automobile today,you will find that:

Accepted Answer

A)  the price of the auto will be much less than it was three months ago 
B)  you will have trouble purchasing an auto because the dealership cannot keep up with the high demand 
C)  it will be impossible to obtain financing for the new auto 
D)  you will have to pay more for the auto than you would have paid three months ago 
E)  the trade-in value of your old vehicle will be much less than it would have been three months ago 
A)  the price of the auto will be much less than it was three months ago 
B)  you will have trouble purchasing an auto because the dealership cannot keep up with the high demand 
C)  it will be impossible to obtain financing for the new auto 
D)  you will have to pay more for the auto than you would have paid three months ago 
E)  the trade-in value of your old vehicle will be much less than it would have been three months ago

Question 5

The Patton Awning Company produces tents,tarps,awnings,and other canvas products.The firm is in the first stage of creating its global business.This means that Patton Awning Company:

Accepted Answer

A)  operates in one country and sells to others. 
B)  has set up a foreign subsidiary. 
C)  operates an entire line of business in another country. 
D)  has top executives and core corporate functions in different countries. 
E)  operates in every country in the world. 
A)  operates in one country and sells to others. 
B)  has set up a foreign subsidiary. 
C)  operates an entire line of business in another country. 
D)  has top executives and core corporate functions in different countries. 
E)  operates in every country in the world.

Question 6

Which list correctly ranks the methods of entering the global marketplace in increasing order of risk?

Accepted Answer

A)  Exporting, licensing and franchising, contract manufacturing, joint venture, and direct investment 
B)  Importing, contract manufacturing, licensing and franchising, joint venture, and direct investment 
C)  Licensing, franchising, contract manufacturing, joint venture, direct investment, and exporting 
D)  Franchising, contract manufacturing, joint venture, direct investment, importing, and licensing 
E)  Importing, contract manufacturing, joint venture, direct investment, and exporting 
A)  Exporting, licensing and franchising, contract manufacturing, joint venture, and direct investment 
B)  Importing, contract manufacturing, licensing and franchising, joint venture, and direct investment 
C)  Licensing, franchising, contract manufacturing, joint venture, direct investment, and exporting 
D)  Franchising, contract manufacturing, joint venture, direct investment, importing, and licensing 
E)  Importing, contract manufacturing, joint venture, direct investment, and exporting

Question 7

U.S.-based Procter & Gamble and Italian-based Fater agreed to produce and market diapers for the European market.This is an example of a joint franchise.

Accepted Answer

A) True 
 B)False

Question 8

Cooley Manufacturing is a multinational company selling plumbing components around the world.This company has progressed to the point that it operates an entire line of business in several other countries.Which stage of multinational business does this represent?

Accepted Answer

A)  Stage one 
B)  Stage two 
C)  Stage three 
D)  Stage four 
E)  Stage five 
A)  Stage one 
B)  Stage two 
C)  Stage three 
D)  Stage four 
E)  Stage five

Question 9

Define and describe exporting.Briefly describe the three types of export intermediaries.

Accepted Answer

Exporting is selling domestically produc

Question 10

_____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations.They perform the same functions as domestic manufacturers' agents who help with financing and shipping.

Accepted Answer

A)  Export agents 
B)  Export brokers 
C)  Import broker 
D)  Buyers for export 
E)  Licensing agents 
A)  Export agents 
B)  Export brokers 
C)  Import broker 
D)  Buyers for export 
E)  Licensing agents

Question 11

A U.S.licensor can try to prevent a licensee from voiding its contract and using what it has learned to create a competitor by:

Accepted Answer

A)  using lawyers from both countries to write the licensing agreement. 
B)  insisting that all licensees have a published code of ethics. 
C)  having the licensee pay a fee for the use of the manufacturing process, trademark, patent, or other proprietary knowledge. 
D)  locally registering patents and trademarks to the U.S. firm, not to the licensee. 
E)  avoiding the use of any patents and trademarks. 
A)  using lawyers from both countries to write the licensing agreement. 
B)  insisting that all licensees have a published code of ethics. 
C)  having the licensee pay a fee for the use of the manufacturing process, trademark, patent, or other proprietary knowledge. 
D)  locally registering patents and trademarks to the U.S. firm, not to the licensee. 
E)  avoiding the use of any patents and trademarks.

Question 12

Explain the following statement: "The Internet economy is being restrained by the old rules,regulations,and habits related to traditional commerce."

Accepted Answer

Before answering this question,students

Question 13

Globalization:

Accepted Answer

A)  relies on strong government regulations to keep down prices 
B)  promotes economic freedom and increases living standards 
C)  tends to dry up the flow of foreign capital in less developed countries 
D)  has made it easier for governments to abuse the freedom and property of their citizens 
E)  has kept wages low in developing countries around the world 
A)  relies on strong government regulations to keep down prices 
B)  promotes economic freedom and increases living standards 
C)  tends to dry up the flow of foreign capital in less developed countries 
D)  has made it easier for governments to abuse the freedom and property of their citizens 
E)  has kept wages low in developing countries around the world

Question 14

Currency markets operate under a system in which the prices of different currencies move up or down based on the demand for and supply of each currency.This practice is called:

Accepted Answer

A)  Countertrading. 
B)  floating exchange rates. 
C)  variable purchasing power. 
D)  flexible monetary policies. 
E)  purchasing power elasticity. 
A)  Countertrading. 
B)  floating exchange rates. 
C)  variable purchasing power. 
D)  flexible monetary policies. 
E)  purchasing power elasticity.

Question 15

Which of the following statements about multinational firms is true?

Accepted Answer

A)  Multinationals typically do not change their methods of reaching their global markets if they are successful with their initial strategy. 
B)  Multinationals are defined as companies heavily engaged in exporting and importing. 
C)  All multinationals must enter the fourth stage of globalization before they are fully internationalized. 
D)  Multinationals often develop their global businesses in stages. 
E)  The five stages of globalization closely mirror the five stages of the product life cycle. 
A)  Multinationals typically do not change their methods of reaching their global markets if they are successful with their initial strategy. 
B)  Multinationals are defined as companies heavily engaged in exporting and importing. 
C)  All multinationals must enter the fourth stage of globalization before they are fully internationalized. 
D)  Multinationals often develop their global businesses in stages. 
E)  The five stages of globalization closely mirror the five stages of the product life cycle.

Question 16

Global legal structures are designed to either encourage or limit trade.Name and define five of these legal structures.

Accepted Answer

There are six legal structures described

Question 17

DeLouis owns an agency that specializes in bringing international buyers in contact with U.S.companies to facilitate global trade.What type of intermediary is DeLouis?

Accepted Answer

A)  Buyer for export 
B)  Export broker 
C)  License agent 
D)  Import agent 
E)  Export agent 
A)  Buyer for export 
B)  Export broker 
C)  License agent 
D)  Import agent 
E)  Export agent

Question 18

_____ is a legal process whereby a firm agrees to let another firm use its manufacturing process,trademarks,patents,trade secrets,or other proprietary knowledge in return for a fee or royalty.

Accepted Answer

A)  A joint venture 
B)  Divestment 
C)  Licensing 
D)  A principal-agent agreement 
E)  A contract manufacturing arrangement 
A)  A joint venture 
B)  Divestment 
C)  Licensing 
D)  A principal-agent agreement 
E)  A contract manufacturing arrangement

Question 19

The G-20 has reached agreement regarding policies for all of the following EXCEPT:

Accepted Answer

A)  combating terrorist financing 
B)  dealing with financial crises 
C)  reducing abuse in the financial system 
D)  streamlining wage and price controls 
E)  economic growth 
A)  combating terrorist financing 
B)  dealing with financial crises 
C)  reducing abuse in the financial system 
D)  streamlining wage and price controls 
E)  economic growth

Question 20

Who are the richest people in the world?

Accepted Answer

A)  Americans 
B)  Chinese 
C)  British 
D)  French 
E)  Luxembourgers 
A)  Americans 
B)  Chinese 
C)  British 
D)  French 
E)  Luxembourgers

Exam 9: Developing a Global Vision

Which method of entering the global marketplace would be most risky?

Which of the following is a criticism of multinational corporations?

Suppose three months ago the dollar price of a yen was $0.012.Today the dollar price of one yen is $0.018.If you are in the market for a brand new Honda automobile today,you will find that:

The Patton Awning Company produces tents,tarps,awnings,and other canvas products.The firm is in the first stage of creating its global business.This means that Patton Awning Company:

Which list correctly ranks the methods of entering the global marketplace in increasing order of risk?

U.S.-based Procter & Gamble and Italian-based Fater agreed to produce and market diapers for the European market.This is an example of a joint franchise.

Cooley Manufacturing is a multinational company selling plumbing components around the world.This company has progressed to the point that it operates an entire line of business in several other countries.Which stage of multinational business does this represent?

Define and describe exporting.Briefly describe the three types of export intermediaries.

_____ are foreign sales agents-distributors who live in a foreign country and represent a domestic company in sales situations.They perform the same functions as domestic manufacturers' agents who help with financing and shipping.

A U.S.licensor can try to prevent a licensee from voiding its contract and using what it has learned to create a competitor by:

Explain the following statement: "The Internet economy is being restrained by the old rules,regulations,and habits related to traditional commerce."

Globalization:

Currency markets operate under a system in which the prices of different currencies move up or down based on the demand for and supply of each currency.This practice is called:

Which of the following statements about multinational firms is true?

Global legal structures are designed to either encourage or limit trade.Name and define five of these legal structures.

DeLouis owns an agency that specializes in bringing international buyers in contact with U.S.companies to facilitate global trade.What type of intermediary is DeLouis?

_____ is a legal process whereby a firm agrees to let another firm use its manufacturing process,trademarks,patents,trade secrets,or other proprietary knowledge in return for a fee or royalty.

The G-20 has reached agreement regarding policies for all of the following EXCEPT:

Who are the richest people in the world?

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