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Exam 3: Doing Business in Global Markets

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Question 31

True/False

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China and Russia present enormous trading opportunities. However, due to political risks in those counties, foreign direct investment is halted.

A) True
B) False

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Question 32

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Trade protectionism

A) always leads to a favorable balance of trade.
B) is the use of government regulations to limit the import of goods and services.
C) is not a barrier to global trade.
D) encourages dumping by foreign industries in the home country.

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

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Question 33

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Foreign travel can help in identifying global business opportunities.

Export trading companies assist businesses in reaching buyers, and dealing with customs, documentation, and payment.

Protective tariffs are designed to raise money for the government.

Devaluation refers to a decline in the value of a nation's currency relative to other currencies.

When foreign firms build production facilities in the United States, they are engaging in

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 volume of exports, the two leading nations are

Under the floating exchange rate system, the value of a country's currency is determined by

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?

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.

The principle of mercantilism encouraged nations to keep economics separate from politics.

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.

The theory of comparative advantage exists because

Jitensha Bike Parts was called to testify before the U.S. Congress. The CEO of Jitensha defended the company against an accusation that it was dumping parts on the U.S. market. In her testimony, the CEO claimed ________. Using traditional guidelines, Congress determined that Jitensha was not dumping.

With the achievements of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), nearly all barriers to trade expansion are finally removed.

One advantage of licensing is the relatively low cost of entering a foreign market.

The World Trade Organization (WTO) was established to mediate trade disputes among nations.

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