Question 1

The North American Free Trade Agreement removed trade restrictions between Canada, the United States, and Brazil.

Accepted Answer

The North American Free Trade Agreement (NAFTA) removed trade restrictions between Canada, the United States, and Mexico, not Brazil.

Question 2

Marketing abroad requires only one step: all rules and regulations for bringing the product to market must be researched and considered.

Accepted Answer

Marketing abroad involves much more than just research and consideration of rules and regulations. Cultural differences, language barriers, and competition are all important factors to consider when entering a new market. Developing a successful international marketing strategy requires comprehensive research, analysis, and localization efforts.

Question 3

Offset agreements combine small firms with major international companies; the larger company acts as the primary contractor, and the smaller firm supports the larger with specialized exporting knowledge.

Accepted Answer

Offset agreements typically involve a larger company agreeing to purchase goods or services from a smaller company in the same country as the buyer, to offset the economic impact of a large purchase, rather than the smaller firm supporting the larger with specialized exporting knowledge.

Question 4

Dumping is the practice of selling a large volume of product into a foreign market at prices lower than the company's own domestic market.

Accepted Answer

Dumping is indeed the practice of selling a large volume of product into a foreign market at prices lower than the company's own domestic market.

Question 5

The World Trade Organization oversees GATT agreements, mediates disputes, and continues the effort to further reduce trade barriers throughout the world.

Accepted Answer

The statement is true. The World Trade Organization (WTO) was established in 1995 to replace the General Agreement on Tariffs and Trade (GATT) and continues to oversee GATT agreements, mediate disputes, and work towards reducing trade barriers globally.

Question 6

An importer takes goods manufactured domestically and sells them abroad.

Accepted Answer

An importer brings goods into a country from abroad for sale, rather than selling domestically manufactured goods abroad. That role is typically referred to as an exporter.

Question 7

In a free trade area, there is a uniform tariff that is set for participating nations.

Accepted Answer

In a free trade area, there are no tariffs or trade barriers between participating nations.

Question 8

Nearly all trade officials of member countries are in agreement as to the direction the WTO should follow in pursuing its major policy initiatives.

Accepted Answer

While member countries may generally agree on the importance of certain policy initiatives, there are often disagreements on the specific details and approach to pursuing them. Therefore, it would not be accurate to say that "nearly all trade officials" are in agreement on the direction of these initiatives.

Question 9

The Canadian wine industry went global to increase international sales as well as domestic sales.

Accepted Answer

This statement is true. The Canadian wine industry has been actively seeking to increase its international markets and presence, in addition to growing its domestic sales. This has been driven in part by increased recognition of the quality of Canadian wines, as well as the desire to diversify its customer base and mitigate the effects of a small domestic market.

Question 10

Neither export-management nor export-trade takes ownership of the product; in both cases, title for the product is retained by the manufacturer until a buyer is located and the sales transaction is completed.

Accepted Answer

Export-management companies (EMCs) typically act as the export department for a manufacturer, facilitating the export process and sometimes taking title to the goods, whereas export-trading companies (ETCs) might or might not take title to the goods but focus on trading a variety of products. The key difference is in their roles and functions, not in the ownership of the product, which can vary based on the agreement between the parties.

Question 11

Export-management companies provide a marketer with business advice and administrative services that might include working with the foreign government to ensure all of the regulations are met and the necessary paperwork is completed.

Accepted Answer

Export-management companies do provide business advice and administrative services, including working with foreign governments for regulation compliance and paperwork completion.

Question 12

The ultimate goal of the European Union is to remove all barriers to free trade among its members.

Accepted Answer

One of the main objectives of the European Union is to establish a single market among its member states, with the aim of removing all barriers to free trade, including tariffs, quotas, and regulatory obstacles. This creates a level playing field for businesses and consumers across the EU and promotes economic growth and prosperity. However, the EU also has other goals, such as promoting social and environmental standards, protecting consumers, and fostering cooperation among member states in areas such as security and foreign policy.

Question 13

Free trade areas have no integration of nations, just the removal of barriers to trade, whereas the common market attempts to integrate the political, social, and economic elements of nations, along with their infrastructures.

Accepted Answer

Free trade areas do indeed remove barriers to trade, but the common market goes beyond that by attempting to integrate various elements of nations. It aims for a higher level of economic cooperation and coordination among member states, including the free movement of goods, services, capital, and people.

Question 14

A manufacturer retains more control over the export process when it deals with an export-management company than if it were to sell the goods outright to an export-trading company.

Accepted Answer

An export-management company (EMC) serves as an extension of the manufacturer's sales department and is responsible for handling all aspects of the exporting process, including market research, documentation, logistics, and payment processing. As a result, the manufacturer retains more control over the export process, as it works closely with the EMC to ensure that its products are marketed and sold in the desired way. In contrast, if the manufacturer were to sell the goods outright to an export-trading company (ETC), it would have less control over how its products are marketed and may not have as much input into the export process.

Question 15

All world nations, no matter how large or small, are automatically considered to be part of the World Trade Organization.

Accepted Answer

Membership in the World Trade Organization (WTO) is voluntary and requires the agreement of existing members and a formal accession process.

Question 16

The MOST common reason cited by Canadian marketers for going global is to find other markets for their products.

Accepted Answer

According to various studies and surveys, the most common reason cited by Canadian marketers for going global is to expand their market and find new customers for their products.

Question 17

Importing and exporting products is a low-risk strategy for entering a foreign market, as it allows a firm more control over how products are sold.

Accepted Answer

Importing and exporting products may not necessarily offer more control over how products are sold in a foreign market, as the firm will still have to comply with local laws and regulations, as well as compete with local players. It also may not provide opportunities for customization or long-term relationships with customers in the foreign market.

Question 18

An exporter will sell domestically produced goods in foreign markets.

Accepted Answer

An exporter is someone who sells domestically produced goods in foreign markets.

Question 19

Import quotas set dollar volume limits on traded goods as a way to control the amount of product that enters a country.

Accepted Answer

Import quotas limit the quantity of goods that can enter a country, not the dollar volume.

Question 20

Although the European Union has attempted to simplify transactions among members, marketers still face the challenges of the fact that there is no uniform postal or telephone system.

Accepted Answer

The statement is true. While the European Union has made efforts to simplify transactions among members, there is still no uniform postal or telephone system, which presents challenges for marketers operating across multiple countries within the EU.

Quiz 6: Serving Global Markets