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Exam 3: Doing Business in Global Markets

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Question 111

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The U.S. government continues to be committed to free-trade agreements, as evidenced by the more recent passage of CAFTA. The future goal of U.S. free-trade advocates is:

A) to make South and Central American nations the textile hubs of the world, while the U.S. focuses on the advancement of services.
B) a large free-trade area that would include all nations of South and North America.
C) unmonitored free trade across all international borders.
D) standardized import quotas among participating nations.

E) C) and D)
F) All of the above

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Question 112

Multiple Choice

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Free trade between nations generally results in:

A) industrialized nations gaining at the expense of developing nations.
B) an increase of jobs in developed nations.
C) mutually beneficial exchange relationships.
D) higher prices for imported goods.

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

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Question 113

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Johanna Breese, a graduate student from Carnegie Mellon, connected with the culture of Madagascar when she created lamba hoany (a native garment) with artful messages to save the more than 150 rare species of animals that inhabit Madagascar. In contrast to many Americans trying to do business abroad, Johanna successfully adapted her message to the native culture when she imprinted it on the native garment.

In order to enjoy the highest standard of living possible, comparative advantage theory states that all nations should strive to become self-sufficient.

_____________ is buying products from another country.

Since the approval of the North American Free Trade Agreement (NAFTA), the value of U.S. exports to Mexico and Canada has increased.

Climate and terrain in several South American countries are conducive to growing coffee efficiently. While other countries can grow coffee, they are not as efficient and effective at coffee growing because of short seasons and climate concerns. This fact would lead you to believe that South American countries have a(n) __________ advantage in the production of coffee.

Monique's Unique Tile Boutique offers decorative tile from around the world. The owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer. Monique participates in _____________.

An influential foreign government official approaches your firm requesting a large sum of money. In return for this bribe, the official promises that your firm will receive preferential treatment in future government contracts. You refuse the request, explaining that the _________ Act of the United States prohibits you from making such payments.

A major goal of the Mercosur common market consisting of several South American countries is to develop a common currency.

Which of the following continents is home to the largest percentage of the world's population?

The __________________ is a firm that has made sizeable investments and has a physical presence in several foreign countries as a manufacturer and marketer of products and services.

One goal of the World Trade Organization (WTO) is to increase national subsidies on agricultural products.

Traders in the 18th century were encouraged to focus on selling their nation's goods in the global market to create a favorable balance of trade. Nations attempted to sell more goods to other nations than they bought from other nations. This approach to global trading is called:

The "second wave" of offshore outsourcing refers to:

Workers in the nation of Argenia prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This __________ difference between Argenian workers and U.S. workers represents a management challenge for firms trading in the global market.

A favorable balance of trade occurs when the value of a nation's exports exceeds its imports.

A small Italian grocery store sells five varieties of feta cheese. It offers Bulgarian, French, Danish, Greek, and one that is processed and sold from Tillamook, Oregon. The domestic variety 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:

ExxonMobil Corporation refines and markets its petroleum products in many different nations. In addition, Exxon's 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:

An example of foreign direct investment would be Pepsi granting a Japanese firm the use of its formula and trademark, for a fee.