Deck 16: Promotion Mix: Tools, Goals, and Strategies

Question 1

The USMCA is an example of a(n) ________ agreement, because it allows Mexico, Canada, and the United States to trade with each other without political or economic restrictions.

A) global economy
B) free trade
C) trade restriction
D) trade expansion
E) import/export

Answer 1

free trade

Question 2

Jonathon works for a U.S. company that doesn't produce goods domestically, but instead buys them from other countries and resells them in the United States. Jonathon's company illustrates the concept of

A) countertrade.
B) subcontracting.
C) exporting.
D) importing.
E) outsourcing.

Answer 2

importing.

Question 3

The United States grows more soybeans than it consumes, so it sells the excess to other countries. This illustrates the concept of

A) countertrade.
B) subcontracting.
C) exporting.
D) importing.
E) outsourcing.

Answer 3

exporting.

Question 4

One positive effect of globalization on the economy is

A) it often means more free trade and economic growth.
B) it allows corporations to avoid paying taxes.
C) it tends to increase wages in developing countries.
D) it allows countries manipulate the value of their currency to gain an advantage in international trade.
E) it allows outsourcing that sends U.S. jobs overseas, often permanently.

Question 5

What outcome is a negative effect of globalization?

A) cooperation in solving environmental problems
B) greater diversity of people, products, services and ideas
C) greater income and wealth disparity
D) increase in wages in developing countries
E) global corporations opening plants in other countries

Question 6

What is a reason that countries trade?

A) A self-sufficient country can provide products and services to one that is not self-sufficient.
B) Some countries do not want to share their natural resources.
C) Some countries are proprietary about their technology products and keep them close to home.
D) Some countries can't produce all the products they need and must buy them elsewhere.
E) An oil rich country can charge whatever it wants to one that needs the oil and can't produce it.

Question 7

When one country can produce a product more cheaply or efficiently than any other country, it has a(n) ________ advantage.

A) production
B) absolute
C) temporary
D) comparative
E) complete

Question 8

Although many countries in the world could produce pottery, if Mexico can produce it the most efficiently, then it has a(n) ________ advantage over other countries.

A) production
B) absolute
C) temporary
D) comparative
E) complete

Question 9

The value of China's exports exceeds all other countries in the world, far exceeding its imports. China has

A) a favorable balance of trade.
B) a trade deficit.
C) a balance of trade.
D) an overstimulated economy.
E) an absolute advantage.

Question 10

When a country accepts goods as partial payment for its own goods, the country is engaging in

A) a product trade.
B) a trade deficit.
C) a balance of trade.
D) countertrading.
E) an absolute advantage.

Question 11

Ecuador is a large producer of bananas, but it must import oil from other countries. If Ecuador made a deal with an oil producing country to use bananas as partial payment for oil, it would be engaging in

A) a product trade.
B) a trade deficit.
C) a balance of trade.
D) countertrading.
E) an absolute advantage.

Question 12

You have a company that makes high-end chocolates, and you want to begin selling to retailers in other countries. In other words, you want to participate in

A) direct importing.
B) indirect importing.
C) direct exporting.
D) indirect exporting.
E) countertrading.

Question 13

If you want to open a Burger King in another country, you must pay a fee to Burger King plus a share of the profit, and Burger King will provide its materials and services to you in return. This is an example of which means of entering a foreign market?

A) franchising
B) importing and exporting
C) joint ventures
D) foreign licensing
E) global outsourcing

Question 14

Many companies have found that having staff with certain specialties on its payroll is expensive, so they hire people in other countries who have the training and skills to do the work for them. This is called

A) inshoring.
B) offshoring.
C) sourcing.
D) licensing.
E) franchising.

Question 15

Hawaii and California are the only two U.S. states that grow coffee commercially, so many coffee roasters buy their beans from countries like Brazil and Colombia. This illustrates which reason companies outsource?

A) labor costs
B) special expertise
C) product cost
D) special resources
E) ease of purchase

Question 16

Some people feel that the best whiskey in the world is made in Scotland. When a company decides to move part of its production to Scotland to capitalize on Scottish producers' experience and ability, what reason is it most likely using for outsourcing?

A) labor costs
B) special expertise
C) product cost
D) special resources
E) ease of purchase

Question 17

What is an advantage of entering a foreign market through a joint venture?

A) local expertise
B) no sharing
C) low labor costs
D) home country expertise
E) more control for parent company

Question 18

When Jennifer had her first business meeting in Japan, she firmly shook the CEO's hand and looked him directly in the eye. She didn't realize that she should bow instead of shake hands and avoid direct eye contact to avoid offending him. In what area did Jennifer demonstrate a cultural misunderstanding?

A) time orientation
B) length of workweek
C) religion
D) nonverbal communication
E) verbal communication

Question 19

The roads, utilities, schools, and hospitals in a community are part of the

A) development base.
B) community hardware.
C) infrastructure.
D) government investment.
E) brick and mortar elements.

Question 20

________ countries receive a large amount of foreign investment and are home to most international organizations.

A) Undeveloped
B) Low-development
C) Underdeveloped
D) Developing
E) Developed

Question 21

The United States is a democratic political system because

A) of the freedoms outlined in the Bill of Rights.
B) it relies on free elections and representative assemblies.
C) it does not depend on affiliation with political parties.
D) it allows people from other countries to come here to live.
E) it allows people to worship as they choose.

Question 22

In which region are bribes illegal?

A) Africa
B) Latin America
C) Asia
D) the Pacific region
E) North America

Question 23

Which form of protectionism is designed to raise money for the government?

A) protective tariffs
B) import quotas
C) revenue tariffs
D) export quotas
E) embargoes

Question 24

When a government wants to make the prices of its goods more competitive, it would implement

A) a protective tariff.
B) an import quota.
C) a revenue tariff.
D) an export quota.
E) an embargo

Question 25

The United States, in 2017, decided it needed to protect its textile industry from a flood of imports from China. As a result, it implemented ________ to limit the textile products coming into the United States from China.

A) a protective tariff
B) an import quota
C) a revenue tariff
D) an export quota
E) an embargo

Question 26

Widgets Inc. produced more widgets than it could sell in the United States, so it sold them below cost to African countries, which hurt widget manufacturers in Africa. This is a practice called

A) transfer of assets.
B) competitive sabotage.
C) clearing.
D) dumping.
E) garage sale pricing.

Question 27

What is the main purpose of the International Monetary Fund?

A) to perform trade negotiations
B) to make short-term loans to countries with an unfavorable balance of payments
C) to set monetary policy
D) to provide low-interest loans to developing nations for improving health, education, transportation, and telecommunications
E) to create trading blocs

Question 28

The USMCA is a trade agreement among

A) the EU and the United States.
B) Asian countries and the EU.
C) the United States and countries in South America and Canada.
D) the United States, Canada, and Mexico.
E) Canada and Mexico.

Question 29

How many countries are members of the Asia-Pacific Economic Cooperation (APEC)?

A) four
B) eight
C) twelve
D) twenty-one
E) thirty

Question 30

The theory of ________, in which countries specialize in goods that have a lower opportunity cost, is cited by supporters of free trade.

A) comparative advantage
B) economic cooperation
C) exploitation
D) trade opportunity
E) trade expansion

Question 31

Affinity Technology has leadership team members in four different countries, has production facilities in three countries, and ships its products across the globe. Affinity is most likely a ________ corporation.

A) global
B) free trade
C) foreign licensed
D) multinational
E) countertrading

Question 32

The Maple Leaf Institute buys different educational support devices and resources from overseas and then sells them to schools in the United States. This situation best represents an example of

A) countertrade.
B) importing.
C) expropriation.
D) balance of trade.
E) exporting.

Question 33

Veritas Textiles has been extremely profitable since opening its doors 10 years ago. The owner believes there is a market for its products overseas. If Veritas begins selling outside the country, they will be

A) importing.
B) countertrading.
C) dumping.
D) exporting.
E) outsourcing.

Question 34

What would best represent a positive effect of trade in the global economy?

A) more varied outsourcing opportunities for businesses
B) increased diversity of people, products, services, and ideas
C) additional international tax havens become available
D) easier for countries to manipulate value of currency
E) simplified process for countries to lead expropriation efforts

Question 35

Despite the fact that the United States has access to oil domestically, it is forced to import much of its oil. This example best reflects that the United States does not have

A) self-sufficiency.
B) a trade surplus.
C) free trade.
D) balance of trade.
E) a comparative advantage.

Question 36

Brazil is very good at manufacturing coffee but does not have easy access to automotive technology. Germany, on the other hand, has some of the best automotive technology in the world but does not have access to coffee. As a result, Brazil sells coffee to Germany and Germany sells automotive technology to Brazil. This best demonstrates the concept of

A) absolute advantage.
B) bartering.
C) countertrading.
D) balance of trade.
E) comparative advantage.

Question 37

India can operate numerous call centers compared to other countries due to low cost of labor and abundant labor force. India can best be described as having

A) a trade surplus.
B) an absolute advantage.
C) balance of trade.
D) self-sufficiency.
E) a comparative advantage.

Question 38

The United States can plant, grow, harvest, and sell corn more cheaply than any other country in the world. We can safely say that the United States has

A) a trade surplus.
B) a common market.
C) import quotas.
D) a comparative advantage.
E) balance of trade.

Question 39

A new mineral was discovered that doubles the life of batteries. After thorough research, it is determined the mineral can only be found and mined in Iceland. Iceland can best be described as having

A) a trade surplus.
B) a countertrade advantage.
C) an absolute advantage.
D) self-sufficiency.
E) an embargo.

Question 40

Japan is experiencing a rubber shortage but does not have the cash available to purchase the rubber from Germany. After negotiating, it agrees to pay for 40 percent of the rubber with cash and the remaining amount with computer equipment. This example best represents the concept of

A) dumping.
B) embargoes.
C) countertrading.
D) expropriation.
E) outsourcing.

Question 41

Canada is one of the largest exporters of coal in the world. Its largest import is vehicles. Canada negotiated an agreement with another nation to pay for a portion of its imported vehicles with coal. We can say that Canada is most likely engaged in

A) countertrading.
B) balancing trade.
C) expropriation.
D) dumping.
E) protectionism.

Question 42

The United States imports far more than it exports each year. The United States can best be described as operating with a(n)

A) trade surplus.
B) absolute advantage.
C) unfavorable balance of trade.
D) import quota.
E) comparative advantage.

Question 43

Last year, a small country brought in 1.7 million dollars' worth of goods from other countries. The same country also manufactured and shipped 1.1 million dollars' worth of goods to other countries. Using this information, we know that this country

A) has a favorable balance of trade.
B) is bound by export quotas.
C) avoids countertrading.
D) utilizes trade protectionism.
E) has a trade deficit.

Question 44

Agholar Metals is considering the purchase of a small steel mill in Bolivia. The senior leadership team is meeting to discuss the risks associated with the potential purchase. What would best represent a key risk for Agholar Metals?

A) Agholar would be subject to import quotas.
B) Agholar would risk losing its trade secrets.
C) Agholar would be assuming all the risk if the steel mill fails.
D) Agholar would be subject to franchising fees.
E) Agholar would be operating with a trade deficit.

Question 45

Engage Electronics manufactures high-end home audio equipment. The costs to produce many of the internal components have risen drastically over the past three years, so it is considering other options. Which scenario would best lead to lowered costs for Engage?

A) offshoring the production of components overseas
B) signing a franchise agreement to have another manufacturer produce the components
C) expropriating the components from a smaller competitor
D) creating a strategic alliance with a competitor to share costs for the components
E) searching for and contracting with a foreign subsidiary to produce the components

Question 46

Office Enterprises sells office supplies and has been considering a move into the international market. The president is risk adverse but agrees that the move will be necessary to stay competitive. Which proposal would make the most sense in this situation?

A) sign a foreign licensing agreement to sell a foreign firm's office supplies
B) import office supplies to resell
C) form a contract manufacturing agreement to produce office supplies
D) look for office supply companies interested in a joint venture
E) purchase a smaller foreign competitor to produce office supplies

Question 47

Colata is traveling internationally for business for the first time. After arriving, she feels overwhelmed by the different language, customs, and by some of the expectations in the workplace. Colata is most likely experiencing

A) devaluation.
B) cultural protectionism.
C) expropriation.
D) comparative diversity.
E) culture shock.

Question 48

Shareef is planning to visit Bolivia for work. His best friend Martin tells Shareef that he should study Bolivia's beliefs, values, knowledge, and behaviors prior to leaving. These items can best be described as being part of a country's

A) attitude.
B) politics.
C) infrastructure.
D) culture.
E) ethnicity.

Question 49

Tyler is from the United States and is working for his employer at the company's office in India. A member of the Indian staff arrives for a meeting 15 minutes late. Tyler scolds the employee for being late; however, he later realizes that being 15 minutes late for a meeting is considered acceptable in India. In which area of cultural misunderstanding could you best classify Tyler's miscue?

A) verbal communication
B) time orientation
C) length of workweek
D) work balance
E) personal space

Question 50

Which best represents an example of nonverbal communication as it pertains to cross-cultural differences?

A) working through your lunch period on a daily basis
B) telling another coworker about your religion
C) arriving five minutes early to a meeting
D) standing within a coworker's personal space
E) sending a disparaging email about one coworker to another

Question 51

Julius works for Transcendent Home Supply in the United States. He is currently leading a project at its production facility in Nigeria. After meeting an important deadline, he smiles at his Nigerian colleagues and gives them a thumbs-up gesture. The other employees frown and look uncomfortable. Julius is confused, so he does some research later in the day. He learns that the thumbs-up is considered offensive in Nigeria. In what area did Julius most likely demonstrate a cultural misunderstanding?

A) religion
B) verbal communication
C) values
D) nonverbal communication
E) attitude

Question 52

Which best represents a trait common in developing countries?

A) minimal tariffs
B) stable GDP
C) strong telecommunications systems
D) low average income
E) large amounts of foreign investment

Question 53

Faith works for a construction company. The company specializes in building new sections of highways or repairing existing stretches of the same. These highways are part of a country's

A) infrastructure.
B) culture.
C) trade.
D) licensing.
E) currency.

Question 54

Turkey is hoping to drive down the cost of its exports and increase the cost of its imports. Which strategy best describes one way Turkey could accomplish this?

A) increase its exchange rate
B) complete a devaluation
C) replace its infrastructure
D) agree to an expropriation
E) form a strategic alliance

Question 55

Ivar oversees the finance team at Ouranos Company. The company is in the United States and is considering a new production facility overseas. It is comparing a few different countries for the location. Ivar is researching the rate at which U.S. money can be exchanged for money in each of the other countries. This figure is best known as the ________ rate.

A) expropriation
B) devaluation
C) currency exchange
D) countertrading
E) free trade

Question 56

Canada has become the home to several international organizations over the years. Canada can best be described as a(n) ________ country.

A) developed
B) totalitarian
C) self-sufficient
D) developing
E) expropriation

Question 57

The United States Congress meets each day to debate important matters on behalf of its citizens. With this knowledge, we can infer that the United States most likely has a ________ political system.

A) democratic
B) balance of trade
C) currency exchange
D) communist
E) totalitarian

Question 58

If a country is led by a military junta, it would best be described as having a ________ political system.

A) democratic
B) totalitarian
C) communist
D) monarchical
E) utilitarian

Question 59

William wants to ensure that his new factory in Latin America is built as quickly as possible. He is considering a donation to the local political party to encourage them to bypass some of their safety inspections that often slow the building process down. What should William most likely keep in mind prior to making a donation like this?

A) Global Compact Act
B) Foreign Corrupt Practices Act
C) Mercosur
D) World Trade Act
E) North American Free Trade Agreement

Question 60

The United States wants to increase sales of compact cars in the country, so it bans all imports of foreign compact cars. This best represents the concept of

A) countertrading.
B) expropriation.
C) dumping.
D) an embargo.
E) an import quota.

Question 61

Canada is considering ways to make money on imported goods. It decides to tax all clothing coming into the country with the proceeds going directly to the government. This tax can best be defined as a(n)

A) devaluation.
B) protective tariff.
C) import quota.
D) embargo.
E) revenue tariff.

Question 62

Sleepytime Baby Company depends on shipments of baby clothes that come from Thailand. Shortly before the holiday rush, the owners learn that the country has hit its annual cap for shipments of baby clothes from Thailand. This situation would best represent an example of a(n)

A) embargo.
B) protective quota.
C) import devaluation.
D) expropriation.
E) import quota.

Question 63

Japan is hoping to make the price of electronics produced within the country more competitive. After some consideration, it implements a tax on all computers shipped into the country. Japan has most likely implemented a(n)

A) embargo.
B) protective tariff.
C) absolute quota.
D) revenue tariff.
E) devaluation.

Question 64

Maven Industries is a mobile device manufacturer located in Italy. It is attempting to sell its popular tablet in Canada for less than it costs to manufacture. It is hoping to drive down the price of tablets produced in Canada while also driving domestic competitors out of business. Maven's actions can best be described as

A) countertrading.
B) absolute advantage.
C) self-sufficiency.
D) comparative devaluation.
E) dumping.

Question 65

Which organization would be best suited to assess the damage caused to a country by a tsunami or earthquake?

A) International Monetary Fund
B) Federal Reserve Bank
C) World Bank
D) European Union
E) World Economic Union

Question 66

Which common market has removed nearly all trade barriers in Europe?

A) EU
B) IMF
C) APEC
D) ETO
E) GATT

Question 67

What is the balance of trade? Define the two ways balance of trade can be classified.

Question 68

Describe at least two of the key characteristics of both developed and less-developed countries.

Question 69

Define expropriation and provide an example of a situation that would demonstrate the concept.

Question 70

If a country was considering implementing trade protectionism, what would be the three ways they could proceed? Define each one.

Question 71

Because it has multinational management and ownership and manufactures and market products in many different countries, Bayer is considered to be a global enterprise.

Question 72

A U.S. technology company is having trouble finding enough parts for its products in the United States. It should consider importing the parts from other countries.

Question 73

A disproportionate number of diamonds are found in African countries, which gives Africa a comparative advantage.

Question 74

A valuation occurs when the value of a nation's currency is lowered relative to the value of other countries' currencies.

Question 75

Totalitarian political systems are always ruled by a dictator.

Question 76

In the past, the United States has imposed fees on foreign-made cars to benefit the U.S. auto manufacturing industry. This is an example of an import quota.

Question 77

The World Bank is involved in assessing the damage caused by major natural disasters.