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Exam 3: Doing Business in Global Markets

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Question 71

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Firms with a physical presence in several different nations are considered multinational corporations.

A) True
B) False

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Question 72

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CAFTA permits the United States, Canada, and Mexico to reduce trade barriers with one another while maintaining independent trade agreements with other countries.

A) True
B) False

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Question 73

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Compared to many other industrialized countries, the United States has historically exported a lower percentage of its products than other countries do.

A country has an absolute advantage if the production of a specific product is more efficient than all other nations.

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

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

If your business has an outstanding product, exporting offers a quick, easy, no-hassle way to improve your profitability.

___________ is the use of government regulations to limit the import of goods and services.

Emerson, Inc., reported that it owns and operates 265 companies worldwide with 23% of its sales coming from Europe, 18% from Asia, 46% from the U.S., and 13% from other parts of the world. Clearly, Emerson exemplifies ________________.

Which of the following terms describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?

To understand legal and regulatory conditions and be successful in global markets it's often useful to contact:

According to the theory of comparative advantage, a country should buy from other countries those goods it produces most efficiently.

Another name for a common market is:

A(n) __________ refers to a complete ban on importing or exporting of products from a specific country.

Nontariff barriers can be just as detrimental to free trade as tariffs.

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

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.

One characteristic of an international joint venture is all parties sharing the risk of a major project.

__________ is the practice of selling a product in foreign countries for a lower price than the good is sold in the producing country.

General Electric's (GE) website noted, "Russia has been one European country in which GE has made significant investments. GE is one of the largest foreign companies in Russia, operating multiple businesses including an equipment fleet with more than 1,500 large units." With physical presence in Russia, Argentina, Australia, Belgium, Greece, Kenya, Canada and other countries, GE is an example of a multinational company.