Question 1

Which organization was established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries?

Accepted Answer

The World Bank, more formally known as the International Bank for Reconstruction and Development, was established by the industrialized nations, including the United States, in 1946 to loan money to underdeveloped and developing countries.

Question 2

What is true of the World Bank?

Accepted Answer

The World Bank loans its own funds or borrows funds from member countries to finance projects ranging from road and factory construction to the building of medical and educational facilities. The World Bank and other multilateral development banks are the largest source of advice and assistance for developing nations.

Question 3

Stuart handles international transactions for other firms. He buys goods on consignment and stores them until they are purchased by a buyer in the international marketplace. After the goods are purchased, Stuart is also responsible for transporting the goods. Stuart is acting as a(n)

Accepted Answer

Export agents are intermediaries who seldom produce goods themselves; instead, they usually handle international transactions for other firms. Export agents either purchase products outright or take them on consignment. They are also responsible for storage and transportation.

Question 4

Which scenario is an example of importing?

Accepted Answer

Many companies first get involved in international trade when they import goods from other countries for resale in their own businesses. For example, a grocery store chain may import bananas from Honduras and coffee from Colombia.

Question 5

What is true regarding trading companies?

Accepted Answer

A trading company buys goods in one country and sells them to buyers in another country. Trading companies handle all activities required to move products from one country to another, including consulting, marketing research, advertising, insurance, product research and design, warehousing, and foreign exchange services to companies interested in selling their products in foreign markets. They are similar to export agents, but their role in international trade is larger.

Question 6

What type of company benefits the most from licensing?

Accepted Answer

Licensing is especially advantageous for small manufacturers wanting to launch a well-known brand internationally.

Question 7

An American company that manufactures coffee makers has a foreign firm assemble the water reservoir tanks for the machines but the final product carries the name of the American firm. This is an example of

Accepted Answer

Contract manufacturing occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification; the final product carries the domestic firm's name.

Question 8

A Swedish auto manufacturer has an American company produce its auto manuals. For the American firm, this is an example of

Accepted Answer

Although outsourcing has become politically controversial in recent years amid concerns over jobs lost to overseas workers, foreign companies transfer tasks and jobs to U.S. companies-sometimes called insourcing-far more often than U.S. companies outsource tasks and jobs abroad.

Question 9

A company headquartered in Milan, has completely transferred its printing services to a company in Germany because the labor and supplies are less expensive there. This is an example of

Accepted Answer

The given process is known as outsourcing. Outsourcing is the transfer of manufacturing or other tasks (such as information technology operations) to companies in countries where labor and supplies are less expensive. Many U.S. firms have outsourced tasks to India, Ireland, Mexico, and the Philippines, where there are many well-educated workers and significantly lower labor costs. Services, such as taxes or customer service, can also be outsourced.

Question 10

An American firm decides to build another manufacturing plant in Poland to handle the demand for its products in that country. This is an example of

Accepted Answer

This is an example of a direct investment. Direct investments may involve the development and operation of new facilities or the purchase of all or part of an existing operation in a foreign company.

Question 11

Suppose a company headquartered in Europe operates over 500 factories around the world but does not have any significant ties to any nation or region in which it operates. This company would be an example of a(n)

Accepted Answer

This is an example of a multinational corporation. These corporations operate on a worldwide scale, and they often have greater assets than some of the countries in which they operate. MNCs do not have significant ties to any one nation or region.

Question 12

On what grounds are multinational corporations (MNCs) often criticized by anti-globalization activists?

Accepted Answer

Many multinational corporations (MNCs) have been targeted by anti-globalization activists at global business forums, and some protests have turned violent. The activists contend that MNCs increase the gap between rich and poor nations, misuse and misallocate scarce resources, exploit the labor markets in LDCs, and harm their natural environments.

Question 13

All of the following are examples of multinational strategy EXCEPT

Accepted Answer

Multinational strategy involves customizing products, promotions, and distribution according to cultural, technological, regional, and national differences. McDonald's McPork sandwiches; soap and detergent manufacturers' products catered to local conditions, equipment, and habits; Colgate-Palmolive Company's inexpensive, plastic, hand-powered washing machines; and advertising modified for language and cultural differences are all examples of multinational strategy.

Question 14

More and more companies are moving from the multinational strategy to a global strategy that involves ________ products.

Accepted Answer

More and more companies are moving from the multinational strategy to a global strategy (globalization), which involves standardizing products (and, as much as possible, their promotion and distribution) for the whole world, as if it were a single entity. Examples of globalized products are American clothing, movies, music, and cosmetics.

Question 15

________ involves standardizing products, and their promotion and distribution if possible, for the whole world, as if it were a single entity.

Accepted Answer

More and more companies are moving from this customization strategy to a global strategy (globalization), which involves standardizing products (and, as much as possible, their promotion and distribution) for the whole world, as if it were a single entity.

Question 16

Which statement is true of the Commercial Service of the U.S. Department of Commerce?

Accepted Answer

Commercial Service is the global business solutions unit of the U.S. Department of Commerce that offers U.S. firms wide and deep practical knowledge of international markets and industries, a unique global network, inventive use of information technology, and a focus on small and mid-sized businesses.

Question 17

Which statement is true about CIBERs?

Accepted Answer

The network of CIBERs (Centers for International Business Education and Research) at leading business schools in the United States conducts benchmarking of the best international practices that benefit U.S. firms. These CIBERs are funded by the U.S. government to help U.S. firms become more competitive globally. A major element of the assistance that these governmental organizations can provide firms (especially for small and medium-sized firms) is knowledge of the internationalization process.

Question 18

Explain the terms balance of trade, trade deficit, and trade surplus in the context of the United States.

Accepted Answer

The answer of Explain the terms balance of trade, trade...

Question 19

Describe how economic barriers such as economic development, infrastructure, exchange rates, and devaluation affect international trade.

Accepted Answer

The answer of Describe how economic barriers such as economic...

Question 20

Describe the types of tariffs that are imposed on products and the reasons for their use.

Accepted Answer

The answer of Describe the types of tariffs that are...

Quiz 3: Business in a Borderless World