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Exam 3: Doing Business in Global Markets

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Question 141

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Home of Households, Inc., has an appliance manufacturing plant in the Chicago area. The company specializes in producing smaller washers and dryers for countries where consumers have less living space. Home of Households participates in the global market through

A) importing.
B) dumping.
C) exporting.
D) balancing trade.

E) A) and B)
F) A) and D)

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Question 142

Multiple Choice

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Although embargos are enacted upon both imports and exports, this form of trade protectionism is often the result of

A) physical and environmental limitations on trade.
B) nontariff barriers.
C) currency fluctuations.
D) political disagreements between nations.

E) None of the above
F) A) and B)

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Question 143

Multiple Choice

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People from other nations sometimes comment on the ethnocentric attitudes of U.S. businesspeople. This indicates that American businesspeople

Monique's Unique Boutique sells clothing from around the world in the U.S. Monique regularly travels overseas to find the best and most unusual shirts, dresses, and pants that foreign producers have to offer. Monique is a(n)

A country has an absolute advantage if the production of a specific product is more efficient than all other nations.

Governments directly participate in global markets through sovereign wealth funds.

Mini-Case Ever since he was five years old, Rhett Tenna has had poor eyesight and as an eyeglass wearer he suffered through all the names that went along with it. Rhett eventually switched from glasses to contacts, but he always wondered why his glasses were not fashionable. After graduation from college, Rhett set out on a lifelong goal: to make eyewear synonymous with fashion. He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses, and replace it with a sense of flair and high fashion. From the day he opened his first store, Rhett's plan met with resounding success. Today, "The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states, and a manufacturing plant that turns out designer frames. A recent internal audit, however, suggested a problem that Rhett had not anticipated. The study indicated that the U.S. market is just about saturated and growth of "The Eyes Have It" stores will be very limited. The audit concerned Rhett until he recognized an untapped market existed overseas. If people all over the world have the same problem, the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"! -The company was informed by the Taiwanese Ministry of Trade that they could only export 1.1 million pairs of eyeglasses to the Taiwanese market during a given year. The Taiwanese have imposed a(n)

Competition among exporting nations is mild.

Absolute advantage is the basis for most global trade today.

Global trade with China is

Which of the following represents the value of one nation's currency relative to the currencies of another country?

A highly powerful foreign government official approaches your company and requests a large sum of money. In return for this bribe, he promises your company will receive preferential treatment in all future government contracts. You quickly refuse his request, explaining that the ________ Act of the United States prohibits you from making such payments.

Firms with a physical presence in several different nations are considered multinational corporations.

Successful multinational corporations disregard cultural differences between countries where they own property and perform business transactions.

The president of Car Parts Kings, Inc. just testified before Congress. He urged them to limit the flow of imported automobile parts into the country. He stated that these imports were priced lower than foreign producers were charging for them in their own countries. He believes foreign producers are

CAFTA permits the United States, Canada, and Mexico to reduce trade barriers with one another while maintaining independent trade agreements with other countries.

An import quota is a complete ban on the import or export of certain products.

The two basic types of tariffs are

Oilers, Inc. refines and markets its energy products in different nations around the world. In addition, Oilers' stockholders and managers come from many different nations. If some of the nations where it operates decided to take over the assets of the company, this act would constitute

The ban on the sale of Cuban cigars in the United States is an example of an import quota.