Question 1

To the extent that a country sells more goods and services abroad than it buys,there will be:

Accepted Answer

When a country sells more goods and services abroad than it buys, it earns more foreign currency than it spends. This increased demand for its currency can lead to appreciation in its value, as foreign buyers need the country's currency to pay for its goods and services.

Question 2

The United States' growing trade deficit reflects a number of factors,which exclude:

Accepted Answer

The services trade surplus actually helps to offset the trade deficit, not contribute to it. The trade deficit is primarily concerned with the balance of goods, and a surplus in services trade indicates that the U.S. exports more services than it imports, which would mitigate rather than exacerbate the trade deficit.

Question 3

The important fact to recognize about the overall balance of payments is that it is always in balance,although imbalances do occur in subsets of the overall balance.

Accepted Answer

The overall balance of payments must always balance because it is a double-entry accounting system that records transactions made between one country and the rest of the world. Imbalances can occur within its subsets, such as the current account or the financial account, but these are offset by equal and opposite entries elsewhere in the account, ensuring the overall balance of payments sums to zero.

Question 4

Authors Prahalad and Hammond have identified several assumptions and misconceptions about the "bottom of the pyramid" (BOP).Explain these assumptions,giving examples.

Accepted Answer

The answer of Authors Prahalad and Hammond have identified several...

Question 5

Some people believe that marketing is relevant only in affluent,industrialized countries,whereas others believe that the role of marketing is to identify people's needs and wants worldwide,irrespective of the economy.Giving examples of companies involved in energy conservation and technology,support the latter argument.

Accepted Answer

The answer of Some people believe that marketing is relevant...

Question 6

The foreign exchange market consists literally of a buyer's and a seller's market where currencies are traded for both spot and future delivery on a continuous basis.The forward market is for immediate delivery and the spot market is for future delivery.

Accepted Answer

In the foreign exchange market, the spot market is for immediate delivery, whereas the forward market is for future delivery.

Question 7

The newly independent countries of the former Soviet Union present an interesting situation: income is declining,and there is considerable economic hardship.The potential for disruption is certainly high.Are these disruptions problem cases,or are they attractive opportunities with good potential for moving out of the low-income category?

Accepted Answer

The answer of The newly independent countries of the former...

Question 8

What are some challenges facing the BRIC framework? Explain with examples from a corporation.

Accepted Answer

The answer of What are some challenges facing the BRIC...

Question 9

When a company conducts business across boundaries in countries with different currencies,it is thrust into the turbulent world of exchange risk.

Accepted Answer

When a company engages in international business, it must deal with different currencies, exposing it to exchange rate fluctuations that can affect the value of its transactions and profits.

Question 10

A country with a positive current account balance has a trade deficit;that is,the outflow of money to pay for imports exceeds the inflow of money for sales of exports.

Accepted Answer

A positive current account balance indicates a trade surplus, not a deficit, meaning the inflow of money from exports exceeds the outflow of money for imports.

Question 11

The "balance of payments" is a record of all economic transactions between the residents of a country and the rest of the world.It is divided into the current and capital accounts.Current accounts include all of the following except:

Accepted Answer

Portfolio investments are recorded in the capital account, not the current account. The current account includes transactions like the balance on goods and services, goods imports, and goods exports.

Question 12

The fastest-growing sector of world trade includes:

Accepted Answer

All the options listed (travel and entertainment, accounting and legal services, royalties and license fees, and engineering services) are part of the services sector, which is the fastest-growing sector in world trade. This sector includes a wide range of services that are increasingly being traded internationally, thanks to advancements in technology and globalization.

Question 13

The top global merchandise exporter is:

Accepted Answer

China has been the world's largest exporter of goods since 2009, leading in various categories including electronics, machinery, and textiles.

Question 14

One of the major issues in trade relations between the high- and lower-income countries is trade in:

Accepted Answer

The answer of One of the major issues in trade...

Question 15

The CEO of Otis Elevators says they measure elevator populations in countries as units installed per thousand people.According to this,China is about one-half an elevator per thousand people.

Accepted Answer

China's elevator density is relatively low compared to more developed regions, reflecting its stage of urban development and the vast potential market for elevator installations.

Question 16

The "balance of payments" is a record of all economic transactions between the residents of a country and the developed countries of the world.

Accepted Answer

The "balance of payments" is a record of all economic transactions between the residents of a country and the rest of the world, not just developed countries.

Question 17

Measuring elevator populations in countries measured as units installed per thousand people gives an estimate of the market for elevators.That China has about one-half an elevator per thousand people is indicative of:

Accepted Answer

Having about one-half an elevator per thousand people suggests a low product saturation level, indicating that there is a significant potential market for more elevators in China.

Question 18

What are some of the challenges faced by marketers in relation to the newly formed smaller countries? Explain giving examples.

Accepted Answer

The answer of What are some of the challenges faced...

Quiz 2: The Global Economic Environment