Question 1

If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a

Accepted Answer

A)   global franchise.
B)   global joint venture.
C)   foreign subsidiary.
D)   contract manufacturer.E) All of the above
F) A) and B)

Question 2

The North American Free Trade Agreement (NAFTA) requires member nations to negotiate uniform trade agreements with nonmember nations.

Accepted Answer

A) True 
 B)False

Question 3

When entering a foreign market, Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer. This is an example of

Accepted Answer

A)   licensing.
B)   franchising.
C)   foreign direct investment.
D)   foreign subsidiaries.E) A) and B)
F) All of the above

Question 4

Explain and provide at least one example of how legal and regulatory forces impede global trade.

Accepted Answer

Examples will vary. In global markets, t...

Question 5

Shortly after graduating college, Roberto took his place in his family's company in Miami. Roberto's father and uncle started a company that buys bauxite, copper, and other minerals from Chile, and brings them into the U.S. Every day, Roberto brokers trades with mines in Chile. The company is in the export business.

Accepted Answer

A) True 
 B)False

Question 6

If tourists from Norway spend money at Orlando's Island of Adventure theme park, it will increase the U.S.'s unfavorable balance of payments.

Accepted Answer

A) True 
 B)False

Question 7

The website for Electricity City noted, "Russia has been a country in which Electricity City has made substantial investments. We are one of the largest foreign companies in Russia, operating multiple businesses, including an equipment fleet with more than 1,500 large units." With physical presence in Russia, Brazil, New Zealand, France, Turkey, Nigeria, Canada, and other countries, Electricity City is an example of a multinational company.

Accepted Answer

A) True 
 B)False

Question 8

A small wine and cheese store in Milwaukee sells dozens of different type of cheese: Bulgarian, French, Danish, Greek, and a domestic from its home state of Wisconsin. The domestic Wisconsin cheese sells for $1.99/pound, while all the others sell for more than $2.99/pound, and the Greek variety is priced at $6.99/pound. The domestic variety is much cheaper because

Accepted Answer

A)   customers always perceive the domestic varieties to be of lower quality than the imported varieties.
B)   the value of the dollar never favors imported goods.
C)   imported cheese producers often pay protective tariffs on these goods, which ultimately raises the price at the grocery store.
D)   the distributors of these imports refuse to buy the cheese in large enough quantities to enjoy economies of scale.E) C) and D)
F) A) and B)

Question 9

Why does it make sense to trade with other nations?

Accepted Answer

A)   After producing all the product and service its people want and need, a nation can sell the excess products to the world.
B)   Some nations have lots of natural resources and technological know-how. They have an ethical obligation to offer the rest to other nations.
C)   Other nations need foreign currency.
D)   A nation will produce what it can produce most efficiently and effectively and buy from other nations what they can produce most efficiently and effectively.E) None of the above
F) A) and B)

Question 10

Hasalot is a small nation that has followed protectionist policies for many years. Which of the following would be an example of a nontariff barrier established by Hasalot?

Accepted Answer

A)   Establishment of a tax levied on imported goods so that foreign products are more expensive than competing domestic goods.
B)   Establishment of a tax levied on imported goods designed primarily to raise money for the government.
C)   Establishment of restrictive quality standards requiring foreign firms to make expensive modifications to their products before they can be exported to Hasalot.
D)   Participation in the Uruguay Round of GATT negotiations.E) C) and D)
F) None of the above

Question 11

Sociocultural differences that affect global businesses include customs, language, and religion.

Accepted Answer

A) True 
 B)False

Question 12

The Tsingtao Brewing company pays a fee to Anheuser-Busch InBev for the right to brew and distribute Budweiser in China. Tsingtao is the licensor and the fee paid is a royalty.

Accepted Answer

A) True 
 B)False

Question 13

A free-trade agreement is likely to result in

Accepted Answer

A)   an increase in imported goods and services.
B)   an absolute advantage.
C)   less competition.
D)   productivity increases in all product categories, for all participating nations.E) None of the above
F) B) and C)

Question 14

The theory of comparative advantage exists because

Accepted Answer

A)   there are too many products and services to choose from today.
B)   customers are always comparing the quality of service from companies in the same industry.
C)   no nation can produce all the products its people want and need.
D)   free-trade agreements became the trend during the past 15 years.E) A) and B)
F) A) and C)

Question 15

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a

Accepted Answer

A)   licensor.
B)   joint venture.
C)   foreign subsidiary.
D)   host company.E) All of the above
F) A) and B)

Question 16

Sovereign wealth funds are investment funds controlled by governments that hold large stakes in foreign companies.

Accepted Answer

A) True 
 B)False

Question 17

Current trade data shows that the country of Hasalot exports far more to other nations than it imports. Hasalot has

Accepted Answer

A)   an unfavorable balance of trade.
B)   a trade surplus.
C)   a trade deficit.
D)   a low balance of trade.E) A) and B)
F) None of the above

Question 18

Free trade is the movement of goods and services between nations without political or economic barriers.

Accepted Answer

A) True 
 B)False

Question 19

One characteristic of an international joint venture is all parties sharing the risk of a major project.

Accepted Answer

A) True 
 B)False

Question 20

One advantage of licensing as a strategy to enter the global market is the sharing of trade secrets.

Accepted Answer

A) True 
 B)False

Exam 3: Doing Business in Global Markets

The Tsingtao Brewing company pays a fee to Anheuser-Busch InBev for the right to brew and distribute Budweiser in China. Tsingtao is the licensor and the fee paid is a royalty.

Correct Answer
verified

One characteristic of an international joint venture is all parties sharing the risk of a major project.

Correct Answer
verified

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a

Correct Answer
verified

Correct Answer
verified

Explain and provide at least one example of how legal and regulatory forces impede global trade.

Correct Answer
verified
Examples will vary. In global markets, t...
View Answer

The North American Free Trade Agreement (NAFTA) requires member nations to negotiate uniform trade agreements with nonmember nations.

Correct Answer
verified

If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a

Correct Answer
verified

Correct Answer
verified

One advantage of licensing as a strategy to enter the global market is the sharing of trade secrets.

Correct Answer
verified

Sociocultural differences that affect global businesses include customs, language, and religion.

Correct Answer
verified

Why does it make sense to trade with other nations?

Correct Answer
verified

Current trade data shows that the country of Hasalot exports far more to other nations than it imports. Hasalot has

Correct Answer
verified

A free-trade agreement is likely to result in

Correct Answer
verified

When entering a foreign market, Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer. This is an example of

Correct Answer
verified

The theory of comparative advantage exists because

Correct Answer
verified

Correct Answer
verified

Free trade is the movement of goods and services between nations without political or economic barriers.

Correct Answer
verified

If tourists from Norway spend money at Orlando's Island of Adventure theme park, it will increase the U.S.'s unfavorable balance of payments.

Correct Answer
verified

Sovereign wealth funds are investment funds controlled by governments that hold large stakes in foreign companies.

Correct Answer
verified

Hasalot is a small nation that has followed protectionist policies for many years. Which of the following would be an example of a nontariff barrier established by Hasalot?

Correct Answer
verified

Exam 3: Doing Business in Global Markets

The Tsingtao Brewing company pays a fee to Anheuser-Busch InBev for the right to brew and distribute Budweiser in China. Tsingtao is the licensor and the fee paid is a royalty.

Correct AnswerverifiedShow Answer

One characteristic of an international joint venture is all parties sharing the risk of a major project.

Correct AnswerverifiedShow Answer

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain and provide at least one example of how legal and regulatory forces impede global trade.

Correct AnswerverifiedExamples will vary. In global markets, t...View AnswerShow Answer

The North American Free Trade Agreement (NAFTA) requires member nations to negotiate uniform trade agreements with nonmember nations.

Correct AnswerverifiedShow Answer

If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One advantage of licensing as a strategy to enter the global market is the sharing of trade secrets.

Correct AnswerverifiedShow Answer

Sociocultural differences that affect global businesses include customs, language, and religion.

Correct AnswerverifiedShow Answer

Why does it make sense to trade with other nations?

Correct AnswerverifiedShow Answer

Current trade data shows that the country of Hasalot exports far more to other nations than it imports. Hasalot has

Correct AnswerverifiedShow Answer

A free-trade agreement is likely to result in

Correct AnswerverifiedShow Answer

When entering a foreign market, Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer. This is an example of

Correct AnswerverifiedShow Answer

The theory of comparative advantage exists because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Free trade is the movement of goods and services between nations without political or economic barriers.

Correct AnswerverifiedShow Answer

If tourists from Norway spend money at Orlando's Island of Adventure theme park, it will increase the U.S.'s unfavorable balance of payments.

Correct AnswerverifiedShow Answer

Sovereign wealth funds are investment funds controlled by governments that hold large stakes in foreign companies.

Correct AnswerverifiedShow Answer

Hasalot is a small nation that has followed protectionist policies for many years. Which of the following would be an example of a nontariff barrier established by Hasalot?

Correct AnswerverifiedShow Answer

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Examples will vary. In global markets, t...
View Answer

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verified

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Correct Answer
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