Question 1

Which of the following statements best describes the effects of subsidies?

Accepted Answer

A)  A subsidy essentially lowers the prices of foreign goods rather than raising the prices of domestic goods. 
B)  A subsidy essentially raises the prices of domestic goods rather than lowering the prices of foreign goods. 
C)  A subsidy essentially lowers the prices of domestic goods rather than raising the prices of foreign goods. 
D)  A subsidy essentially raises the prices of foreign goods while also raising the prices of domestic goods. 
E)  A subsidy essentially lowers the prices of foreign goods while also lowering the prices of domestic goods.

Question 2

China and India require that when foreign firms enter into joint ventures with local firms, the local partners must have the controlling ownership stake. What is this an example of?

Accepted Answer

A)  local content laws 
B)  business practice laws 
C)  fair trade agreements 
D)  quotas 
E)  subsidies

Question 3

What are products that are created abroad and then transported and sold domestically?

Accepted Answer

A)  dumped goods 
B)  exports 
C)  imports 
D)  buy backs 
E)  domestic goods

Question 4

Which of the following types of firms design, produce, and manufacture products in many nations?

Accepted Answer

A)  multinational firms 
B)  importing firms 
C)  domestic firms 
D)  international firms 
E)  exporting firms

Question 5

To avoid transportation costs and tariffs, Apics Enterprises gave exclusive rights to Svenson AB in Finland to produce its product. What is this an example of?

Accepted Answer

A)  licensing arrangement 
B)  strategic alliance 
C)  foreign direct investment 
D)  independent agent 
E)  branch office

Question 6

What are two specific reasons why a company might decide NOT to conduct business internationally?

Accepted Answer

The answer of What are two specific reasons why a...

Question 7

Under which of the following treaties are Canada, the United States, and Mexico gradually eliminating tariffs and all other trade barriers?

Accepted Answer

A)  the EURO Agreement 
B)  the Pan-American Agreement 
C)  the North American Free Trade Agreement 
D)  the General Agreement on Tariffs and Trade 
E)  the G-3 Free Trade Agreement

Question 8

An import is a product made or grown abroad but sold domestically.

Accepted Answer

A) True 
 B)False

Question 9

U.S. imports of Canadian softwood timber are limited to 14.7 billion board feet per year. What is this practice called?

Accepted Answer

A)  tariff 
B)  embargo 
C)  subsidy 
D)  dumping 
E)  quota

Question 10

In some South American countries, it is sometimes legal to bribe other businesses and government officials, while this practice is illegal in the United States. Which of the following refers to this type of policy?

Accepted Answer

A)  protectionism 
B)  business practice laws 
C)  free trade agreements 
D)  fair trade agreements 
E)  local content laws

Question 11

Which of the following buys products in foreign markets and then sells them for resale in its home country?

Accepted Answer

A)  importer 
B)  exporter 
C)  multinational firm 
D)  international firm 
E)  direct foreign investor

Question 12

Which country dominates the Pacific Asia region economically?

Accepted Answer

A)  South Korea 
B)  China 
C)  Indonesia 
D)  Japan 
E)  Taiwan

Question 13

Which of the following, if True, would strengthen the argument for exporting the company's products to China?

Accepted Answer

A)  Lite Foods has a large budget set aside for foreign direct investments. 
B)  Lite Foods wants to have strict control over its international operations. 
C)  Lite Foods has to modify its product line to suit Chinese tastes and preferences. 
D)  Lite Foods' products do not have a "healthy" reputation in the United States. 
E)  Lite Foods has significant excess capacity that results in production overruns.

Question 14

Free market economies often establish some system of quotas and/or tariffs.

Accepted Answer

A) True 
 B)False

Question 15

In a licensing arrangement, firms choose foreign organizations to manufacture their products in another country in return for a fee plus royalties.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following countries is the world's third largest economy, behind that of the United States and Japan?

Accepted Answer

A)  China 
B)  India 
C)  Brazil 
D)  Germany 
E)  Russia

Question 17

Explain why fluctuations in exchange rates have significant influence on the balance of trade.

Accepted Answer

The answer of Explain why fluctuations in exchange rates have...

Question 18

The ultimate form of a quota is a tariff.

Accepted Answer

A) True 
 B)False

Question 19

The vice president of Fembooks argues that they will encounter too many difficulties in taking the business global via the Internet. The president argues that the benefits would be worth the problems encountered. Which of the following statements, if True, would support the argument of the vice president against going global?

Accepted Answer

A)  While English is the dominant language of the Internet, more local traffic would be generated by Web pages in the local language. 
B)  Being a niche business, going global over the Internet would not put a huge strain on existing personnel. 
C)  Shipping books overseas could easily be handled by UPS, FedEx, or airmail. 
D)  Sales predictions for overseas expansion anticipate an initial 30 percent increase, then tapering off to a 20 percent increase annually. 
E)  Increased Internet advertising costs would be a fairly inexpensive investment to increase business on a global basis.

Question 20

Derrido's marketing director thinks that the company should craft a contractual agreement as an initial entry strategy, because the company might want to choose a more advanced entry strategy later. Which of the following, if True, would strengthen this position?

Accepted Answer

A)  Foreign partners usually want to enter into contractual agreements with American companies for a long-term period. 
B)  A contractual agreement should spell out as many expectations of the foreign partner as possible. 
C)  Contractual agreements should be entered into only if the foreign partner is extremely reliable. 
D)  Contractual agreements require approval by legal specialists from all countries involved. 
E)  Contractual agreements allow a company to provide for open, flexible terms of operation.

Exam 4: The Global Context of Business

Which of the following statements best describes the effects of subsidies?

China and India require that when foreign firms enter into joint ventures with local firms, the local partners must have the controlling ownership stake. What is this an example of?

What are products that are created abroad and then transported and sold domestically?

Which of the following types of firms design, produce, and manufacture products in many nations?

To avoid transportation costs and tariffs, Apics Enterprises gave exclusive rights to Svenson AB in Finland to produce its product. What is this an example of?

What are two specific reasons why a company might decide NOT to conduct business internationally?

Under which of the following treaties are Canada, the United States, and Mexico gradually eliminating tariffs and all other trade barriers?

An import is a product made or grown abroad but sold domestically.

U.S. imports of Canadian softwood timber are limited to 14.7 billion board feet per year. What is this practice called?

In some South American countries, it is sometimes legal to bribe other businesses and government officials, while this practice is illegal in the United States. Which of the following refers to this type of policy?

Which of the following buys products in foreign markets and then sells them for resale in its home country?

Which country dominates the Pacific Asia region economically?

Which of the following, if True, would strengthen the argument for exporting the company's products to China?

Free market economies often establish some system of quotas and/or tariffs.

In a licensing arrangement, firms choose foreign organizations to manufacture their products in another country in return for a fee plus royalties.

Which of the following countries is the world's third largest economy, behind that of the United States and Japan?

Explain why fluctuations in exchange rates have significant influence on the balance of trade.

The ultimate form of a quota is a tariff.

Derrido's marketing director thinks that the company should craft a contractual agreement as an initial entry strategy, because the company might want to choose a more advanced entry strategy later. Which of the following, if True, would strengthen this position?