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Exam 3: Doing Business in Global Markets

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Question 131

True/False

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The purchase of U.S.based Anheuser-Busch,by Belgian brewer InBev is an example of foreign direct investment.

A) True
B) False

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Question 132

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In 1999,the European Economic Community adopted a common currency known as the Euro.

A) True
B) False

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Question 133

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Telewhiz,Inc.just contracted with a firm in the Philippines to provide customer service for its cell phone customers.Although there were cheaper labor markets that Telewhiz could have tapped,customers have reported that they understand English speaking Filipino people better than English speaking people in other countries.As an outsourcing option,it is a good compromise.

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 (from Oregon) 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:

Household Appliances,Inc.has a manufacturing plant near Chicago.The company specializes in compact washers and dryers for countries where consumers have less living space.Household Appliances participates in the global market through:

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

Free trade between nations generally results in:

Franchising is popular both domestically and internationally.

A firm may export everything it produces overseas and yet not be considered a multinational.

____________ is the selling of products to another country.

The nation of New Maraguay has a small commercial airplane industry that is struggling to keep up with the two large international commercial airplane manufacturers.The other nations in its trading bloc have agreed on an import quota on commercial airplanes,which limits the number of planes that any country in the trading bloc can buy from other airplane manufacturers.This strategy is necessary to help the New Maraguay's airplane manufacturer while it is in its infancy.

If global trade experts predict that the value of the dollar will soon fall,it will result in:

Contract manufacturing is a form of outsourcing.

__________ is an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell the parent company's product or service to others in a given territory in a specified manner.

Due to a nation's weak currency,people may have to fall back on ___________.

A joint venture is a partnership in which two or more companies join to undertake a major project.All parties commit financing and risk to the project.

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:

Bartering is the exchange of goods or services for other goods or services with no exchange of money traded.

A common market is a group of countries that have no internal tariffs among member nations,yet have a common external tariff.

A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.