Question 1

The administrative, marketing, and manufacturing operations that many international firms, multinational firms, and transnational firms have around the world are often called

Accepted Answer

A)   subsidiaries.
B)   outlets.
C)   departments.
D)   markets.
E)   holding companies. A

Question 2

Explain the trade feedback effect.

Accepted Answer

Increased demand for exports of other nations energizes their economic activity, resulting in higher national income, which stimulates their demand for imports. In short, imports affect exports and vice versa. This phenomenon is called the trade feedback effect and is one argument for free trade among nations.

Question 3

When a U.S. airplane manufacturer sells its airplanes to a company in Germany without using intermediaries, it is referred to as

Accepted Answer

A)   direct exporting.
B)   indirect exporting.
C)   licensing.
D)   foreign manufacturing.
E)   foreign assembly. A

Question 4

Which of the following statements about the World Trade Organization (WTO) is most accurate?

Accepted Answer

A)   The WTO acts as an agent in trade negotiations between its members and the remainder of the world.
B)   The 39 member countries of the WTO account for about 25 percent of world trade.
C)   The WTO attempts to mitigate trade wars between countries.
D)   The WTO uses legal scholars who can only issue nonbinding recommendations.
E)   The WTO was formed by the United Nations.

Question 5

A firm's profit potential and control over marketing activities ________ as it moves from exporting to direct investment as a global market entry strategy.

Accepted Answer

A)   becomes more stable
B)   increase
C)   levels off
D)   decreases
E)   becomes more unpredictable

Question 6

The Japanese manufacture tractors for rice paddies. They are smaller than most U.S. tractors and perfect for a weekend farmer who wants to tend to a small garden. The tractors are not sold in the United States through any authorized channels, yet they are available in the United States at prices below the manufacturer's suggested retail price. These Japanese tractors are being sold

Accepted Answer

A)   through the gray market.
B)   under the table.
C)   over the counter.
D)   with bypassed global channels.
E)   by breaking the distribution monopoly.

Question 7

In terms of the global marketplace, there are three primary types of companies: ________ firms, international firms, and transnational firms.

Accepted Answer

A)   worldwide
B)   conglomerate
C)   intercontinental
D)   multinational
E)   cosmopolitan

Question 8

Mary Kay, Inc., can be classified as which type of company when marketing its products around the world?

Accepted Answer

A)   multinational firm
B)   transnational firm
C)   international firm
D)   global marketing firm
E)   multidomestic firm

Question 9

Globalization is the focus on creating economic, cultural, political, and technological ________ among individual national institutions and economics.

Accepted Answer

A)   wealth
B)   uniformity
C)   interdependence
D)   growth
E)   maturity

Question 10

________ firm engages in trade and marketing in different countries as an extension of the marketing strategy in its home country.

Accepted Answer

A)   A multidomestic
B)   A metropolitan
C)   An international
D)   A multinational
E)   A transnational

Question 11

Based on a study of 6,500 teens in 26 countries, when asked what country had the most influence on their attitudes and purchase behavior, 54 percent of teens from the United States, 87 percent of those from Latin America, 80 percent of the Europeans, and 80 percent of those from Asia named

Accepted Answer

A)   the United States.
B)   Japan.
C)   the United Kingdom.
D)   France.
E)   China.

Question 12

Once a company has decided to enter the global marketplace, it must select a means of market entry. One of the four general options is

Accepted Answer

A)   direct investment.
B)   accreditation.
C)   countertrading.
D)   cooperative.
E)   internationalization.

Question 13

A gray market is

Accepted Answer

A)   the segment of products specifically designed for the need of older buyers.
B)   a once active and powerful market that is rapidly becoming the bottom of the barrel.
C)   a situation where products are sold through unauthorized channels of distribution.
D)   a pricing structure that is based upon haggling that is considered acceptable in some countries but not others.
E)   the willingness of one party to accept gifts in exchange for better prices or price allowances.

Question 14

The Economic Espionage Act

Accepted Answer

A)   allows the World Court in The Hague to adjudicate trade disputes on behalf of UN members and requires the home country to impose any penalties.
B)   imposes a personal fine on a convicted U.S. citizen of up to $10 million.
C)   targets espionage activities that are commonplace in any industry that holds governmental contracts.
D)   makes the theft of trade secrets by foreign entities a federal crime in the United States.
E)   is well-intended in theory, but is virtually impossible to enforce.

Question 15

A small Canadian winery located in British Columbia has developed a new table wine. It has no overseas contacts but wants to get its wine on the shelves in selected Asian and European markets where growth has been substantial in the past two years. Which type of exporting option would best suit this company?

Accepted Answer

A)   direct exporting
B)   licensing
C)   indirect exporting
D)   joint venture
E)   cooperative partnership

Question 16

The price of one country's currency expressed in terms of another country's currency is referred to as the

Accepted Answer

A)   balance of price.
B)   currency exchange rate.
C)   money conversion factor.
D)   balance of payments.
E)   transfer payment.

Question 17

A field of study that examines the correspondence between symbols and their role in the assignment of meaning for people is referred to as

Accepted Answer

A)   back translation.
B)   symbiotics.
C)   semiotics.
D)   symbolic linguistics.
E)   cross-cultural analysis.

Question 18

An institution that sets rules governing trade between its members through a panel of trade experts who decide on trade disputes between members and issue binding decisions is referred to as the

Accepted Answer

A)   League of Nations (LoN) .
B)   World Trade Organization (WTO) .
C)   Association for Commerce Equity (AC
E)  .
D)   United Nations Board of Trade (UNBT) .
E)   Global Better Business Bureau (BBB-G) .

Question 19

________ is the tendency to believe that it is inappropriate, indeed immoral, to purchase foreign-made products.

Accepted Answer

A)   Country partisanship
B)   Cultural ethnocentrism
C)   Xenophobia
D)   Consumer ethnocentrism
E)   Nationalism

Question 20

A restriction placed on the amount of a product allowed to enter or leave a country is referred to as

Accepted Answer

A)   a quota.
B)   a tariff.
C)   a WTO tax.
D)   a subsidy.
E)   an excise tax.

Exam 7: Understanding and Reaching Global Consumers and Markets