Question 1

Which of the following is an example of licensing?
A)When a company allows another company to pay it a fee to train its employees.
B)When a company allows a foreign company to pay it a fee to make or distribute the first company's product or service.
C)When a company pays a competitor a fee to stop the competitor from selling its products in the company's territory.
D)When a company develops a strategic plan for another organization.
E)When a company barters goods for goods in lieu of a monetary payment.

Accepted Answer

Licensing refers to the process wherein a company allows another company to pay it a fee to make or distribute the first company's product or service. This is a common strategy used by companies to expand their reach in foreign markets without investing significant resources in setting up their own operations. Option A is an example of training, option C is an example of a territorial agreement, option D is an example of a consulting service, and option E is an example of bartering.

Question 2

Donald is the owner of The Party Hat,a U.S.event-planning company.He plans to open an event-planning company,Events & Adventures,in London.Events & Adventures will be totally owned and controlled by The Party Hat,which makes Events & Adventures a ____ of The Party Hat.
A)joint venture
B)total investment agreement
C)strategic alliance
D)wholly-owned subsidiary
E)maquiladora

Accepted Answer

A wholly-owned subsidiary is a company that is completely owned and controlled by another company. In this case, The Party Hat completely owns and controls Events & Adventures, making it a wholly-owned subsidiary. Joint venture refers to a partnership between two or more companies, total investment agreement and maquiladora are not relevant in this context, and strategic alliance refers to a partnership between two companies to achieve a specific goal, which is not the case here.

Question 3

An import quota is a(n)
A)trade barrier.
B)embargo.
C)sanction.
D)export fee.
E)type of dumping.

Accepted Answer

An import quota is a type of trade barrier that restricts the amount of a particular good that can be imported into a country. This is typically done in order to protect domestic industries and producers from foreign competition.

Question 4

The United States uses government regulations,such as tariffs,embargoes,and import quotas,to limit the import of goods and services and to protect U.S.industries against foreign competition.______ is the use of these regulations.
A)Domestic protectionism
B)Blocking
C)Trade protectionism
D)Dumping
E)Export protectionism

Accepted Answer

Trade protectionism refers to the use of government regulations, such as tariffs, embargoes, and import quotas, to limit the import of goods and services and to protect domestic industries against foreign competition.

Question 5

Luxere Hotels International,an American company,sells the rights to other hospitality companies globally to open hotels with the Luxere name for a fee and a share of the profit,in return for using Luxere's brand name and a package of materials and services.Luxere is engaged in
A)franchising.
B)importing.
C)offshoring.
D)exporting.
E)countertrading.

Accepted Answer

The given scenario describes franchising, where the parent company (Luxere Hotels International) sells the rights to other companies to use its brand name and resources in exchange for a fee and a share of their profits.

Question 6

The World Bank
A)finances worldwide mergers.
B)provides low-interest loans for improvements in developing nations.
C)provides banking operations for multinational organizations.
D)provides loans to communist nations.
E)monitors banks and credit unions globally.

Accepted Answer

The World Bank provides low-interest loans for improvements in developing nations.

Question 7

Shrimpers in South Louisiana have accused China of selling shrimp in the United States at a lower price than U.S.suppliers.The goal of the Chinese,they argue,is to drive down the price of U.S.shrimp.The U.S.shrimpers are accusing the Chinese of
A)outsourcing.
B)applying import quotas.
C)trade protectionism.
D)dumping.
E)establishing an embargo.

Accepted Answer

The accusation of selling shrimp in the United States at a lower price with the intention of driving down the price of U.S. shrimp is a classic example of dumping, which refers to the practice of selling goods in a foreign market at a price lower than the production cost or the price charged in the domestic market. This unfair trade practice can harm domestic producers by making it difficult for them to compete, leading to lower sales, lower profits, and even bankruptcy.

Question 8

Technology Experts is a U.S.company that specializes in IT research.It has formed a joint venture with Processor Inc. ,a Canadian organization that has a reputation for producing quality PCs.The two companies will work together to market laptops in China,sharing the risks and rewards of starting the new enterprise together.Technology Experts and Processor Inc.are partners in a(n)
A)strategic alliance.
B)global strategy.
C)export strategy.
D)import strategy.
E)franchising strategy.

Accepted Answer

A strategic alliance is a type of partnership between two or more companies that work together towards a common goal, while still remaining independent entities. In this case, Technology Experts and Processor Inc. have formed a joint venture to market laptops in China and will share the risks and rewards of the new enterprise, which is indicative of a strategic alliance.

Question 9

Prior to 1990,the United States imposed a tax,known as a(n)________,on automobiles imported from Mexico.
A)licensing fee
B)tariff
C)embargo
D)import quota
E)export quota

Accepted Answer

A tariff is a tax on imported goods, and the United States imposed a tariff on automobiles imported from Mexico prior to 1990. A licensing fee is a fee for the right to use a certain product or service, an embargo is a complete ban on trade, an import quota limits the amount of imports allowed, and an export quota limits the amount of exports allowed. None of these options fit the situation described in the question.

Question 10

NAFTA and the EU are both
A)greenfield ventures.
B)world banks.
C)terrorist-monitoring associations.
D)monetary funds.
E)trading blocs.

Accepted Answer

NAFTA (North American Free Trade Agreement) and the EU (European Union) are both trading blocs. NAFTA is a trade agreement between the United States, Canada, and Mexico, while the EU is a political and economic union of 27 European countries. Both promote economic cooperation and free trade between member countries.

Question 11

The WTO
A)oversees mergers between large multinational corporations.
B)monitors business start-ups globally.
C)monitors and enforces trade agreements.
D)ensures that multinational organizations are behaving ethically.
E)keeps an eye on suspected terrorists.

Accepted Answer

The WTO (World Trade Organization) is responsible for monitoring and enforcing trade agreements between member countries. It ensures that countries are following rules and regulations related to international trade, such as tariffs and quotas. The other options (A, B, D, and E) do not accurately describe the role of the WTO.

Question 12

According to the watchdog group Public Citizen,NAFTA is responsible for
A)a decrease in illegal immigration into the United States.
B)the loss of 845,000 U.S.jobs.
C)a higher standard of living among its trading partners.
D)closing the wage gap between Mexico and the United States.
E)the formation of the IMF and World Bank.

Accepted Answer

Public Citizen has stated that NAFTA resulted in the loss of 845,000 U.S. jobs.

Question 13

________ is prevented by quotas.
A)Outsourcing
B)Tariffs
C)Exporting
D)An embargo
E)Dumping

Accepted Answer

Quotas are designed to prevent dumping, which is the practice of a foreign company's exporting products abroad at a lower price than the price in the home market-or even below the costs of production-to drive down the price of the domestic product.

Question 14

The United States limits the amount of cheese purchased from other countries;this is a(n)____ policy .
A)export quota
B)import dump
C)import quota
D)trade embargo
E)import tariff

Accepted Answer

The policy described is an import quota, which is a limit on the quantity of a good that can be imported.

Question 15

Free trade is the
A)movement of customers between nations that do not have trade embargoes.
B)policy of cost-free exchange of goods.
C)bartering of goods or services locally or globally.
D)bartering or sale of goods without taxes.
E)movement of products between countries without political or economic obstruction.

Accepted Answer

Free trade refers to the movement of products between countries without political or economic obstruction. It is the policy of removing barriers to the free exchange of goods and services between different countries. Free trade allows countries to specialize in the production of goods in which they have a comparative advantage, leading to an increase in economic efficiency and productivity.

Question 16

Recent protests against World Bank operations involve complaints that the World Bank (1)supports countries that permit sweatshop labor or restrict religious freedom,and (2)
A)financially assists al Qaeda-linked governments.
B)encourages fraudulent lending practices in Latin America.
C)ignores major human-rights violations in western Africa.
D)institutes an unfavorable balance of payments in developing nations.
E)finances projects that could damage the ecosystem.
In recent years,the World Bank has been the target of demonstrations.Protesters believe it finances projects that could damage the ecosystem,such as the Three Gorges Dam on China's Yangtze River.Others complain that the World Bank supports countries that permit low-paying sweatshops or that suppress religious freedom.

Accepted Answer

The passage states that recent protests against World Bank operations involve complaints about the World Bank financing projects that could damage the ecosystem, such as the Three Gorges Dam on China's Yangtze River. This aligns with option E: "finances projects that could damage the ecosystem". None of the other options are mentioned in the passage as reasons for recent protests against the World Bank.

Question 17

The IMF has
A)helped support some weaker European countries during the recent financial crisis.
B)been very helpful in monitoring international terrorists.
C)ignored the cause of income inequality.
D)provided significant funding for business start-ups globally.
E)provided support to global terrorists.

Accepted Answer

The IMF has provided financial assistance and support to some of the weaker European countries during the recent financial crisis.

Question 18

Sometimes a country's laws forbid foreigners from owning a business in the nation.In the presence of such laws,a(n)_____ is one way for an American company to have a presence in that foreign country.
A)export agreement
B)MBO pact
C)import agreement
D)bartering union
E)joint venture

Accepted Answer

A joint venture involves a partnership between a foreign company and a local company in the foreign country, allowing the American company to have a presence in the nation without directly owning the business. This is a common strategy used by companies when faced with restrictions on foreign ownership of businesses.

Question 19

A tax on automobiles imported into the United States that raises prices on imported vehicles to make the price of cars produced in the United States more competitive is a(n)______;a tax on all oil imported into the United States,which is implemented to raise money for the U.S.government,is a(n)
A)protective tariff;revenue tariff
B)revenue tariff;protective tariff
C)quota tariff;revenue tariff
D)embargo agreement;income tariff
E)import barrier;income tariff

Accepted Answer

A tax on automobiles imported into the United States that raises prices on imported vehicles to make the price of cars produced in the United States more competitive is a protective tariff. On the other hand, a tax on all oil imported into the United States, which is implemented to raise money for the U.S. government, is a revenue tariff. Therefore, option A is the correct choice.

Question 20

At one time,the United States used a(n)________ to prohibit the import of all products made in Cuba.
A)tariff
B)limit agreement
C)export ban
D)embargo
E)protective quota

Accepted Answer

The correct term for prohibiting the import of products from a specific country is an embargo. In this case, the United States implemented an embargo on products made in Cuba.

Quiz 4: Global Management: Managing Across Borders

Which of the following is an example of licensing?

Donald is the owner of The Party Hat,a U.S.event-planning company.He plans to open an event-planning company,Events & Adventures,in London.Events & Adventures will be totally owned and controlled by The Party Hat,which makes Events & Adventures a ____ of The Party Hat.

An import quota is a(n)

The United States uses government regulations,such as tariffs,embargoes,and import quotas,to limit the import of goods and services and to protect U.S.industries against foreign competition.______ is the use of these regulations.

Luxere Hotels International,an American company,sells the rights to other hospitality companies globally to open hotels with the Luxere name for a fee and a share of the profit,in return for using Luxere's brand name and a package of materials and services.Luxere is engaged in

The World Bank

Shrimpers in South Louisiana have accused China of selling shrimp in the United States at a lower price than U.S.suppliers.The goal of the Chinese,they argue,is to drive down the price of U.S.shrimp.The U.S.shrimpers are accusing the Chinese of

Prior to 1990,the United States imposed a tax,known as a(n) ________,on automobiles imported from Mexico.

NAFTA and the EU are both

The WTO

According to the watchdog group Public Citizen,NAFTA is responsible for

________ is prevented by quotas.

The United States limits the amount of cheese purchased from other countries;this is a(n) ____ policy .

Free trade is the

Recent protests against World Bank operations involve complaints that the World Bank (1) supports countries that permit sweatshop labor or restrict religious freedom,and (2)

The IMF has

Sometimes a country's laws forbid foreigners from owning a business in the nation.In the presence of such laws,a(n) _____ is one way for an American company to have a presence in that foreign country.

A tax on automobiles imported into the United States that raises prices on imported vehicles to make the price of cars produced in the United States more competitive is a(n) ______;a tax on all oil imported into the United States,which is implemented to raise money for the U.S.government,is a(n)

At one time,the United States used a(n) ________ to prohibit the import of all products made in Cuba.