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Exam 3: Exploring Global Business

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Question 61

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"Devaluation increases the cost of foreign goods, while it decreases the cost of domestic goods of foreign firms." Explain with an example.

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Devaluation refers to the deliberate dec...

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Question 62

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Despite trade restrictions, international business is

A) moving slowly.
B) growing.
C) slowing down.
D) struggling for survival.
E) decreasing.

F) B) and E)
G) B) and C)

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Question 63

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The Doha Round of negotiations focuses on industrial and nontariff barriers, agriculture, services, and easing trade rules.

Ford Motor Company, Mazda Motor Corporation, and Matsushita Electrical Industrial Company formed a ____ to make heating and cooling units in Japan for Mazda cars beginning in 1988.The new company's heating and cooling units may also be used in Ford's cars.

What is an embargo? When might it be used?

A restriction on the amount of a particular foreign currency that can be purchased or sold is a _____.

Which of the following functions is not performed by a trading company?

____ is the exportation of large quantities of a product at a price lower than that of the same product in the home market.

A favorable balance of payments means that

One of the problems with licensing as a method of achieving international business is that it is a much more difficult procedure to implement than the other methods.

Landing Service Landing Service is a lawn furniture company that has been around for many years.It is known for its ability to produce furniture more efficiently than any other company in the nation.In truth, no other companies in any other nation come close.Landing Service has shipped many of its products internationally.In fact, 80 percent of its profits come from international sales.However, the Italian government has imposed a tax on imported furniture items to protect local companies.The Brazilian government, on the other hand, has imposed taxes on Landing Service products due to the government wanting a piece of the pie. Landing Service initially thought that these taxes were unfair because it was being singled out.However, after Landing Service contacted the organization that had the power to mediate this situation, the furniture company realized that the taxation it was subjected to was legal and that there was nothing it could do about it. -Refer to Landing Service.Because the company is known for its ability to produce lawn furniture more efficiently than any other company in the world, the company must have a(n) ____ advantage.

When was GATT first established?

When a country exports more than it imports, it has a(n) _____.

A reduction in the value of a nation's currency relative to the currencies of other countries is called a currency devaluation.

Suppose the country of Gaditia wanted to join GATT and thus be treated the same as other GATT members.What GATT principle is Gaditia interested in receiving?

When the United States levies a tax on textiles from India, this tax is a type of _____.

Due to worldwide trade restrictions, international business is declining in volume.

Who are the members of NAFTA?

The Saudi Arabian government does not allow the consumption of alcoholic beverages within its country.The Saudi Arabian government is imposing a(n) _____.

Lynn Bernerd, Inc. Lynn Bernerd, Inc., manufactures and sells reclining furniture.The company currently operates in the United States but wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first, the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognized, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace. After all the research was completed, the senior managers realized that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties. -Refer to Lynn Bernerd, Inc.Which of the following alternatives could have worked as a link between the managers at Lynn Bernerd, Inc.and the buyer from a different country?