Deck 5: Developing a Global Vision

Question 1

Globalization expands economic freedom,spurs competition,and lowers the productivity and living standards of people in countries that open themselves to the global marketplace.

Answer 1

False

Question 2

Which of the following indicates a benefit of outsourcing?

A) Increased corporate growth
B) Chances of increased production delays
C) Rising wages in the developing world
D) Decreases efficiency

Answer 2

A

Question 3

Which of the following countries has the highest gross domestic product?

A) Belwick,whose market value of final goods is $100 billion and market value of final services is $50 billion for two years
B) Sparanthea,whose market value of intermediate goods is $200 billion and market value of intermediate services is $50 billion for a quarter year
C) Zaneland,whose market value of final goods is $120 billion and market value of intermediate goods is $20 billion for a year
D) Acquardica,whose market value of final goods is $170 billion and market value of final services is $90 billion for a year

Answer 3

D

Question 4

Fresnas Corp.,a company that designs in its New York headquarters and had manufactured apparel in Malaysia,now practices inshoring.Given this information,which of the following is most likely to be true of Fresnas Corp.?

A) It keeps its research team in close proximity to its domestic manufacturers.
B) It faces increased shipping and transportation costs.
C) It outsources its manufacturing jobs to other countries.
D) It outputs a lot of production.

Question 5

Which of the following is true of outsourcing?

A) It reduces corporate growth.
B) It reduces productivity and revenue growth.
C) It faces production delays due to faulty parts.
D) It increases energy costs in the United States.

Question 6

Which of the following companies is in the first stage of developing a global business?

A) The Footwear Corp.,which manufactures shoes and boots in a small town in Lucitona,sells its products to several countries around the world.
B) Laelle Inc.is based in Euphonia and has set up several subsidiaries to manage its business in another country
C) Fournotts Bros.,which is based in Datford,is opening a new line of business in a neighboring country.
D) Rues and West Inc.operated in Yucatan,is operating an entire line of business in another country.

Question 7

Which of the following statements is true of globalization?

A) It expands economic freedom and increases the living standards of people.
B) It increases prices and decreases product and service quality.
C) It has curbed the growth of the middle class in developing countries.
D) It leads to a monopoly of domestic producers.

Question 8

Marketing that aims at markets across the world is called _________.

A) global marketing
B) outsourcing
C) inshoring
D) regional marketing

Question 9

Which of the following refers to the total market value of all final goods and services produced in a country during a given time period?

A) Gross domestic product
B) Intermediate product
C) Final product
D) International commerce

Question 10

GE has been in the news lately for _____,or bringing back the production of GE appliances to its Louisville,Kentucky plant from China.

A) inshoring
B) offshoring
C) insourcing
D) importing

Question 11

Which of the following is NOT correct regarding the practice of inshoring?

A) Rapid consumer product innovation has led to the need to keep production experts in close proximity so that they can work together.
B) Expanding development and manufacturing timelines have contributed to inshoring.
C) Increased fuel and transportation costs associated with long-distance shipping has given impetus to inshoring.
D) Rising wages in the developing world have made U.S.rates more competitive.

Question 12

Which term refers to understanding international marketing opportunities,using effective global marketing strategies,and knowing the threats from foreign competitors in all markets?

A) Global vision
B) Global marketing
C) Outsourcing
D) Inshoring

Question 13

Global marketing is a one-way street whereby only U.S.companies sell their wares and services throughout the world.

Question 14

Discuss the impact of international trade on the United States.

Question 15

Which of the following is/are the benefits of outsourcing?

A) Cost saving
B) Corporate growth
C) Increase in productivity and revenue growth
D) All of these are correct

Question 16

Which of the following is correct regarding the benefit of globalization?

A) Decreases product and service quality
B) Hampers economic freedom
C) Access to global export markets and advanced technology
D) Crushing competition

Question 17

Melrow Inc.,a U.S.firm,suffers heavy losses and lays off many of its employees.To reduce its manufacturing costs,it shifts its production units to another country where labor costs are less.In this scenario,Melrow Inc.is engaged in _____.

A) licensing
B) outsourcing
C) franchising
D) inshoring

Question 18

If a country can boost exports and limit imports,then fewer jobs are created and there is more competition for local businesses.

Question 19

Often small ventures are skeptical about entering the global market because it:

A) limits access to advanced technologies in less developed countries.
B) slows down the rate at which people's living standards increase.
C) involves various trade laws or tariffs.
D) empowers governments to abuse the freedom and property of their citizens.

Question 20

A company that is heavily engaged in global trade,beyond exporting and importing,is called ___________.

A) a regional firm
B) a multinational corporation
C) a capital intensive firm
D) an export agent

Question 21

Which of the following statements is true of third-stage multinational companies?

A) They sell products only in one country.
B) Their top executives and core corporate functions are in different countries.
C) They operate an entire line of business in another country.
D) They set up foreign subsidiaries to handle sales in one country.

Question 22

Companies at the fourth stage of developing their global business:

A) set up foreign subsidiaries to handle sales in one country.
B) operate in one country and sell into others.
C) operate an entire line of business in another country.
D) have their top executives and core corporate functions located in different countries.

Question 23

The ability of multinationals to tap financial,physical,and human resources from all over the world and combine them economically and profitably can benefit any country.

Question 24

A __________ strategy occurs when multinational firms enable individual subsidiaries to compete independently in domestic markets.

A) multidomestic
B) multinational
C) global
D) capital-intensive

Question 25

Which of the following statements is true of the term boycott?

A) It refers to a limit on the amount of a specific product that can enter a country.
B) It refers to a tax levied on the goods entering a country.
C) It refers to the exclusion of all products from certain countries or companies.
D) It refers to an agreement to stimulate international trade.

Question 26

Which of the following statements is not correct about multinational companies

A) They possess and can transfer the most up-to-date technology.
B) Multinational companies employ a small proportion of the labor force with increasingly capital-intensive technologies.
C) Multinationals may not substantially increase employment in developing nations.
D) Multinational companies have low income levels.

Question 27

A company is doomed to failure in a foreign country if it _____.

A) does not understand the foreign country's culture
B) focuses on translating product names to the foreign country's language
C) varies its marketing mix according to the foreign customers
D) pays attention to the foreign country's demographics

Question 28

Which of the following statements is true of a company that is in the second stage of developing a global business?

A) It maintains a virtual executive suite.
B) It sets up foreign subsidiaries to handle sales in one country.
C) It runs its business entirely through the Internet.
D) It bases its entire operations in its home country.

Question 29

Traditionally,companies utilizing a multidomestic strategy enable individual subsidiaries to compete independently in domestic markets.

Question 30

_____ was founded in 1945,one year after the creation of the World Bank,to promote trade through financial cooperation and eliminate trade barriers in the process.

A) The European Union (EU)
B) The World Trade Organization (WTO)
C) The North American Free Trade Agreement (NAFTA)
D) The International Monetary Fund (IMF)

Question 31

Which statement is true of global marketing standardization?

A) Consumers worldwide don't want the same things.
B) Companies utilizing global marketing standardization have different foreign market segments with different products.
C) The markets throughout the world are becoming more alike.
D) Companies must differentiate their offerings to satisfy different target markets.

Question 32

Which of the following statements is true of the term quota?

A) It refers to a limit on the amount of a specific product that can enter a country.
B) It refers to the exclusion of all products from certain countries or companies.
C) It refers to a tax levied on the goods entering a country.
D) It refers to an agreement to stimulate international trade.

Question 33

The stage in which multinationals set up foreign subsidiaries to handle sales in one country is the _______________ in developing a global business.

A) first stage
B) second stage
C) third stage
D) fourth stage

Question 34

Discuss the four stages in which multinational corporations develop their global businesses.

Question 35

Which of the following is NOT true about culture from the perspective of a global marketer?

A) Culture underlies the family,the educational system,religion,and the social class system.
B) A company that does not understand a country's culture may try other means to succeed in the country.
C) Cultural blunders lead to misunderstandings and often perceptions of rudeness or even incompetence.
D) Culture is the common set of values shared by its citizens that determines what is socially acceptable.

Question 36

Which term refers to the production of uniform products that can be sold the same way all over the world?

A) Global marketing standardization
B) Inshoring
C) Outsourcing
D) Global marketing differentiation

Question 37

Using a capital-intensive technology refers to spending less money for equipment than labor in the production process.

Question 38

Which of the following is true about the different stages of business development of a multinational corporation?

A) In the second stage,companies operate in one country and sell into others.
B) In the third stage,multinationals operate an entire line of business in another country.
C) The third stage has evolved primarily due to the Internet and involves mostly high-tech companies.
D) The top executives and core corporate functions of a multinational corporation operate in the same country.

Question 39

Which of the following is NOT a factor of external environment?

A) Culture of a country
B) Global economy
C) Demographics
D) Human resources of the organization

Question 40

A business that requires a greater expenditure for equipment than for labor is called:

A) capital intensive.
B) labor intensive.
C) market intensive.
D) production intensive.

Question 41

Which of the following identifies a difference between a boycott and a quota?

A) A boycott sets a limit on the amount of goods entering a country,whereas a quota is a tax levied on goods entering a country.
B) A boycott is the revenue received from international trade,whereas a quota is the revenue received from domestic trade.
C) A boycott is used to include all foreign competition,whereas a quota is used by governments to exclude companies from countries with which they have a political dispute.
D) A boycott is the exclusion of all products from certain countries or companies,whereas a quota is a means of protection from foreign competition.

Question 42

Sinesia is a country that has very few sources of potable water.Given this information,which of the following is most likely to happen?

A) Sinesia's international marketing will remain unaffected because petroleum is the only factor that affects international marketing.
B) Sinesia will remain an importer of foodstuffs.
C) Sinesia will become an attractive target for military intervention.Sinesia will not be having absolute water scarcity.
D) Sinesia's wealth will equal that of countries with rich sources of water.

Question 43

Which statement correctly states the relationship between a country's political structure and actions and businesses?

A) Regulation does not burden businesses or make it difficult for them operate.
B) International politics rarely affect business laws.
C) Government-owned industries and centralized planning tend to decrease as rights of private property increase.
D) Regulations do not help businesses grow and prosper.

Question 44

Which of the following correctly defines balance of payments?

A) The difference between the value of a country's exports and the value of its imports over a given period
B) The difference between a country's total payments to other countries and its total receipts from other countries
C) Total market value of all final goods and services produced in a country for a given time period
D) Total income estimated from returning production jobs to the United States

Question 45

Which of the following is a characteristic of market grouping?

A) It occurs when government efforts stifle imports or investment by foreign corporations.
B) It occurs when several countries agree to work together to form a common trade area.
C) It occurs when a trade agreement dramatically lowers trade barriers across the world.
D) It occurs when a domestic firm joins with a foreign company to create a new entity.

Question 46

Average family incomes are higher in more developed countries than in less developed countries.

Question 47

Which statement is true of natural resources in terms of global trade or a country's economy?

A) The past decade has witnessed the discovery of an abundance of natural resources.
B) Petroleum is the only natural resource that affects international marketing.
C) Vast differences in natural resources result in minor shifts of wealth among countries.
D) Steep declines in the price of oil had a negative impact on America's oil producers.

Question 48

The Uruguay Round replaced the General Agreement on Tariffs and Trade (GATT)with _____.

A) the European Union (EU)
B) the World Trade Organization (WTO)
C) the North American Free Trade Agreement (NAFTA)
D) the International Monetary Fund (IMF)

Question 49

Which of the following made several major changes in world trading practice?

A) The Uruguay Round
B) Mercosur
C) The North American Free Trade Agreement (NAFTA)
D) The International Monetary Fund (IMF)

Question 50

Which of the following is a tool that governments use to exclude companies from countries with which they have a political dispute?

A) Exchange control
B) Market grouping
C) Boycott
D) Tariff

Question 51

_____ is a trade agreement that has dramatically lowered trade barriers worldwide and that led to the creation of the World Trade Organization.

A) The European Agreement
B) General Agreement on Tariffs and Trade
C) The North American Free Trade Agreement
D) The Uruguay Round

Question 52

A tax levied on the goods entering a country is called:

A) tariff.
B) quota.
C) exchange control.
D) market control.

Question 53

_____ is the largest Latin American trade agreement,and it includes Argentina,Bolivia,Brazil,Chile,Colombia,Ecuador,Paraguay,Peru,Uruguay,and Venezuela.

A) Mercosur
B) General Agreement on Tariffs and Trade (GATT)
C) The Uruguay Round
D) The North American Free Trade Agreement (NAFTA)

Question 54

In North Korea,a company wishing to buy goods abroad must first obtain a foreign currency exchange from the control agency.

Question 55

A law compelling a company earning from the markets overseas to sell it to a control agency,usually a central bank,is called ___________.

A) exchange control
B) market grouping
C) quota
D) tariff

Question 56

Which term refers to the difference between the value of a country's exports and the value of its imports over a given period?

A) Balance of trade
B) Balance of payment
C) Gross domestic product
D) Gross national product

Question 57

Which of the following is true about the European Union (EU)?

A) All consumer and industrial goods exported to EU countries are no longer subject to tariffs.
B) European Union (EU)is a trade agreement instituted in 2005 that includes Costa Rica,the Dominican Republic,El Salvador,Guatemala,Honduras,Nicaragua,and the United States.
C) European Union (EU)does not maintain a common trade policy with outside nations and a regional development policy.
D) European Union (EU)is one of the world's most important free trade zones.It has member countries such as Austria,Belgium,Bulgaria,the Czech Republic,Denmark,France,and so on,and it guarantees the freedom of movement of people,goods,services,and capital between member states.

Question 58

Which of the following eliminated the extensive loopholes of the General Agreement on Tariffs and Trade (GATT)?

A) The European Union (EU)
B) The World Trade Organization (WTO)
C) The North American Free Trade Agreement (NAFTA)
D) The International Monetary Fund (IMF)

Question 59

Which of the following statements is correct about BRICS?

A) Outside of China,the brightest light among the BRICS is India.
B) India is more dependent on exports than other BRICS country.
C) Politics do not play a role in the development of BRICS.
D) China is not one of the BRICS countries.

Question 60

All countries follow a similar set of customs and traditions that determine business practices and influence negotiations with foreign customers.

Question 61

Discuss the most common legal structures that affect international trade.

Question 62

Identify and discuss the economic factors that influence the external business environment.

Question 63

The Group of Twenty (G-20)was founded in 1945,one year after the creation of the World Bank,to promote trade through financial cooperation and eliminate trade barriers in the process.

Question 64

Which way of entering the global marketplace subjects a company to the highest risk,but offers the highest return?

A) Exporting
B) Contract manufacturing
C) Joint venture
D) Direct investment

Question 65

The International Monetary Fund (IMF)makes short-term loans to member nations that are unable to meet their budgetary expenses.

Question 66

Which of the following is true about joint ventures?

A) A joint venture is a risky way of entering a global market.
B) Joint ventures are usually the only way a government will allow a foreign company to enter its country.
C) Joint ventures enable the local firm or government to acquire managerial skills and new technology.
D) All of these are correct

Question 67

Governments use boycotts to exclude companies from countries with which they have a political dispute.

Question 68

A(n)_____ is an intermediary who brings a buyer and a seller together.

A) licensor
B) export broker
C) contract manufacturer
D) export merchant

Question 69

Which of the following could be a motive for a company going global?

A) It can earn additional profits.
B) It has a unique product or technological advantage not available to other international competitors.
C) Management may have exclusive market information about foreign customers.
D) All of these

Question 70

The legal process whereby a company allows another firm to use its manufacturing process,trademarks,patents,trade secrets,or other proprietary knowledge is ______________.

A) licensing
B) contract manufacturing
C) joint venture
D) direct foreign investment

Question 71

Which of the following is a difference between a joint venture and contract manufacturing?

A) A joint venture is formed when a domestic firm buys part of a foreign company to create a new entity,while firms choose contract manufacturing to avoid being involved in licensing.
B) A joint venture is formed when a domestic firm broadens its global marketing base without investment,while in contract manufacturing; a licensor allows another firm to use its manufacturing process.
C) A joint venture is formed when several countries agree to work together to form a common trade area,while contract manufacturing occurs when government efforts stifle investment by foreign corporations.
D) A joint venture is formed when an agreement to stimulate international trade is made,while contract manufacturing occurs when a tax is levied on the goods entering a country.

Question 72

Generally,complex and sophisticated industries are found in developed countries,and more basic industries are found in less developed nations.

Question 73

An intermediary in the global market that assumes all ownership risks and sells globally for its own account is called _________.

A) a buyer for export
B) an export broker
C) an export agent
D) a direct exporter

Question 74

Which of the following correctly defines the role of an export broker?

A) An export broker is an intermediary who plays the traditional broker's role by bringing buyer and seller together.
B) An export broker is an intermediary who acts like a manufacturer's agent for the exporter; the export agent lives in the foreign market.
C) An export broker is an intermediary in the global market that assumes all ownership risks and sells globally for its own account.
D) An export broker is an intermediary who sells domestically produced products to buyers in other countries.

Question 75

When a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity,it is called _____________.

A) licensing
B) contract manufacturing
C) a joint venture
D) a direct foreign investment

Question 76

Active ownership of a foreign company or of overseas manufacturing or marketing facilities is called ____________.

A) direct foreign investment
B) foreign institutional investment
C) contract manufacturing
D) licensing

Question 77

Which of the following refers to private label manufacturing by a foreign company?

A) Licensing
B) Contract manufacturing
C) Joint venture
D) Direct foreign investment

Question 78

A U.S.licensor will be most successful at maintaining effective control over licensees and preventing them from voiding the contract by:

A) using lawyers from both countries to write the licensing agreement.
B) insisting that all licensees have a published code of ethics.
C) receiving all the revenue earned by the licensees.
D) locally registering patents and trademarks.

Question 79

A global marketer or a firm considering global marketing must consider the external environment.

Question 80

Given the United States' current balance of trade,if more U.S.firms that export their goods,the country's balance of trade will improve.