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Exam 3: Doing Business in Global Markets

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Question 61

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Though illegal in the United States, some firms will practice dumping in order to gain a foothold in a new market.

A) True
B) False

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Question 62

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The nation of Mainland recently reported that its imports for the previous year were $7 billion greater than its exports. During the same period, the country reported a favorable balance of payments. This information suggests

A) Mainland has misstated information in its report. The nation must have had a balance of payments deficit since more money flowed out of Redland for imports than flowed into the country for its exports.
B) Mainland's gold and other precious metal reserves increased in value.
C) money inflows from tourism, foreign aid, foreign investment, and other sources more than offset Mainland's trade deficit.
D) Mainland devalued their currency to obtain a more favorable exchange rate.

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

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Question 63

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The same proven management styles used by companies in their domestic operations can be employed in their foreign subsidiaries.

Describe and provide examples of four different strategies for reaching global markets.

As the most powerful economy in the world, the United States does not need to concern itself with having an unfavorable balance of payments.

Countries often use trade protectionism measures to protect their domestic industries from foreign competition.

The U.S. government announced a 13-million-pound annual limit on Diamontite imported from Taubestan. This type of trade restriction is called a(n)

While Asia represents an important source of U.S. imports, few export opportunities exist for U.S. firms to sell goods and services to Asian consumers.

In the box, "Many Flags Fly Over the Golden Arches," the textbook describes one of the reasons McDonald's has become a global powerhouse. Which statement best describes what led to McDonald's success?

When a company's strategy is ________, the firm makes arrangements for a foreign manufacturer to produce the product. The domestic company's label and/or trademark are attached to the completed product.

The balance of payments measures the inflows and outflows of money from tourism, foreign aid, military expenditures, and foreign investments as well as flows resulting from exports and imports.

Just about anything that can be sold in the United States can also be sold to buyers in other countries.

Engineering Chiefs, a large U.S.-based mechanical engineering firm, wants to enter the global market. Upon careful analysis of the market, they will find that global trade

The tiny nation of Tinian is extremely efficient in the mining of tin. However, its climate and terrain make it difficult to produce corn. According to the theory of comparative advantage, Tinian should

Even though the U.S. exports a large ________ of goods and services, it exports a much lower ________ of its products than many other countries do.

Using contract manufacturing as a strategy to reach global markets gives firms the advantage of

If two nations have a trade dispute, the World Trade Organization may be asked to mediate and provide a decision within one year's time.

Though not as specific or formal as tariffs, nontariff barriers can be just as detrimental to free trade.

In volume of exports, the two leading nations are

The United States enjoys a trade surplus in the global market.