Question 1

__________ is lowering the value of a nation's currency relative to other currencies.

Accepted Answer

Devaluation is the process of reducing the value of one currency in terms of others. It can be a deliberate policy decision by a government or central bank in order to make their exports cheaper and more competitive on the international market.

Question 2

__________ is the exchange of merchandise or services for other merchandise or services without the exchange of money.

Accepted Answer

Bartering is the exchange of goods or services without the exchange of money. Exporting is the act of selling goods or services to another country, importing is the act of buying goods or services from another country, and factoring is a financial transaction where a company sells its accounts receivables at a discount to a third-party company to get immediate cash.

Question 3

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

Accepted Answer

Under the floating exchange rate system, the value of a country's currency is determined by the supply and demand in the global market. The currency is allowed to fluctuate based on various economic and political factors, and its value is not directly controlled by the monetary authorities of that country.

Question 4

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

Accepted Answer

Culture encompasses all aspects of a specific group's way of life, including their values, beliefs, rules, language, and institutional structures. Ethnocentricity refers to the belief that one's own culture is superior to others, while institutional society and social myopia are not directly related to the definition provided in the question.

Question 5

Global financial markets operate under a system of ___________, where the supply and demand for various currencies dictate their value at any moment in time.

Accepted Answer

Floating exchange rates refer to the system where the value of currency is determined by the market forces of supply and demand, rather than being fixed to a specific value. This allows for flexibility in response to economic and political changes, and allows for currency values to fluctuate in response to changing market conditions.

Question 6

Nike _________________ its products in foreign countries, where labor is cheap and production sites are owned by other companies. This strategy allows Nike to experiment in new markets without incurring large start-up costs involved with building their own production facilities.

Accepted Answer

Nike uses contract manufacturing to produce their products in foreign countries. This allows them to take advantage of cheaper labor and the existing production facilities of other companies, without having to incur large start-up costs themselves.

Question 7

ExxonMobil Corporation refines and markets its petroleum products in many different nations. In addition, Exxon's stockholders and managers come from many different nations. If some of the nations where it operates decided to take over the assets of the company, this act would constitute:

Accepted Answer

If a nation decides to take over a company's assets, it would constitute expropriation, which is the act of a government taking over private property or businesses. This can be done with or without compensation to the owner.

Question 8

Which of the following represents the value of one nation's currency relative to the currencies of another country?

Accepted Answer

The exchange rate represents the value of one country's currency relative to another country's currency. The Euro rate only applies to the Euro currency, and currency rate is a vague term that could refer to various aspects of a currency's value. Standard of living is a measure of the quality of life in a particular country and is not directly related to currency value.

Question 9

Adam's Apple Corporation ships all of the apples from its orchards in Washington to a single buyer in Japan. The firm's entire profits are derived from this international transaction. Adam's Apple Corporation:

Accepted Answer

A multinational corporation is a company that operates in multiple countries and has a global presence. Adam's Apple Corporation only ships its apples to Japan, meaning it does not operate in multiple countries and is not considered a multinational corporation. Additionally, without more information on the cost of importing and exporting the apples, it is impossible to determine whether the company is contributing to the U.S. balance of trade deficit. Lastly, the establishment of NAFTA, which is a trade agreement between the U.S., Canada, and Mexico, would not have any direct impact on Adam's Apple Corporation since it only ships to Japan.

Question 10

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

Accepted Answer

When a nation's currency is weak, it becomes more difficult to import goods from other countries as the cost increases. Therefore, people may have to resort to bartering (the exchange of goods or services without involving money) as a means of obtaining goods and services. Exporting (selling goods to other countries) may be a useful strategy for businesses to earn foreign currency, but it may not be relevant to individuals. Factoring (selling accounts receivable to a financial institution) is not directly related to a weak currency.

Question 11

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 ________________.

Accepted Answer

Emerson, Inc. is a multinational corporation as it operates in multiple countries and has a significant portion of its sales coming from outside the U.S.

Question 12

Ethnocentricity means:

Accepted Answer

Ethnocentricity refers to the belief that one's own culture is superior to others. It can lead to judgment and prejudice against other cultures, and a failure to understand or appreciate them.

Question 13

Which of the following sociocultural forces can have a significant impact on global business operations?

Accepted Answer

Religion can have a significant impact on global business operations as it can affect consumer behavior, business practices, and laws/regulations in different countries. For example, some religions may prohibit certain products or services, demand specific business practices, or require adherence to certain religious laws. Therefore, businesses operating globally should consider the religious practices and customs of the countries they operate in to avoid offending customers or violating local laws.

Question 14

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

Accepted Answer

The American ice cream manufacturer becomes a foreign subsidiary because it is being fully owned and controlled by a foreign company (the Swiss chocolate firm). A global franchise implies a license agreement between companies, a global joint venture implies a partnership between companies, and a contract manufacturer implies a third-party manufacturer hired by the Swiss chocolate firm. None of these fully represent the acquisition of an American ice cream manufacturer by a Swiss chocolate firm.

Question 15

Boasting a $1.6 billion Ketchup brand, the Heinz Company is flying high with a 44% increase in its sales of Indonesian-based ABC, a soy sauce company that it owns. ABC is a _____________ of Heinz.

Accepted Answer

A foreign subsidiary is a company that is controlled by another company in a different country. In this case, Heinz owns ABC, which is based in Indonesia, making it a foreign subsidiary.

Question 16

Which of the following statements is the most accurate observation regarding multinational corporations?

Accepted Answer

The answer of Which of the following statements is the...

Question 17

_______ is a complex form of bartering in which several countries may be involved, each trading products and services for the products and services of another country.

Accepted Answer

Countertrading is a complex form of bartering in which several countries may be involved, each trading products and services for the products and services of another country. This type of trade is often used by countries with limited currency exchange options or by those seeking to bypass economic sanctions.

Question 18

McGowan Corporation of Ireland and Enomoto Enterprises based in Japan recently produced a new electric car with rechargeable batteries that can be driven at high speeds for long distances. They have shared the investment, each contributing important technological expertise to the effort. These firms entered into a(n) ____ to build this car.

Accepted Answer

McGowan Corporation of Ireland and Enomoto Enterprises based in Japan created a new electric car together by sharing the investment and important technological expertise. This collaboration between two companies is known as a joint venture.

Question 19

The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials, to secure business contracts is the _____________.

Accepted Answer

The legislation described in the question is commonly known as the Foreign Corrupt Practices Act (FCPA). Option B (Foreign Anti-trust Act) is not specific to prohibiting questionable payments to foreign officials, while options C and D (Multinational Collusion Law and Global Good Conduct Law) do not exist as actual laws.

Question 20

____________ describes an attitude held by some American businesspeople that American culture is superior to all others.

Accepted Answer

Ethnocentricity is the belief that one's own culture is superior to others. This attitude can be held by individuals or organizations, and in this case, some American businesspeople are believed to hold it. The other answer choices are not applicable to the given scenario.

Quiz 3: Doing Business in Global Markets