Question 1

Nikkei Auto Parts testified before Congress defending the company against an accusation that it was dumping auto parts on the U.S. market. In her testimony, the president claimed . Using traditional guidelines, Congress determined that Nikkei was not dumping.
A)Nikkei includes 10% overhead costs and an 8 percent profit margin in the price of all the parts they export to the U.S.
B)Japan runs a trade deficit with the U.S. in auto parts.
C)Nikkei is a staunch supporter of free trade.
D)Nikkei sells more auto parts in Europe than it does in the U.S.

Accepted Answer

The statement that Nikkei includes 10% overhead costs and an 8 percent profit margin in the price of all the parts they export to the U.S. indicates that they are not selling their parts at an unfairly low price (dumping) in the U.S. market.

Question 2

are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.
A)Export trading companies
B)Licensees
C)Strategic alliances
D)Keiretsu

Accepted Answer

Export trading companies specialize in matching buyers and sellers from different countries and providing services to ease the process of entering global markets. Licensees are companies that have been granted the right to use a specific product or technology. Strategic alliances are partnerships between two or more companies to achieve a specific goal. Keiretsu is a business group composed of interlocking companies that work together in a coordinated and collaborative manner.

Question 3

A is a partnership in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project.
A)multinational cooperative
B)joint venture
C)franchisee transfer
D)recruit affiliation

Accepted Answer

A joint venture is a partnership in which two or more companies join together to undertake a specific project or task. They share the risks and costs involved in the project and work towards a common goal.Joint ventures are commonly used by companies operating in different countries, as it allows them to pool their expertise and resources to enter a new market or undertake a large-scale project in a foreign country.

Question 4

When a company's strategy is the firm makes arrangements for a foreign manufacturer to produce the product. The domestic company's label and/or trademark are attached to the completed product.
A)franchising
B)contract manufacturing
C)import sourcing
D)export trading

Accepted Answer

This is contract manufacturing, where the company outsources the production of their product to a foreign manufacturer and attaches their label or trademark to the finished product.

Question 5

The value of goods imported into France exceeds the value of French exports. This indicates that France:
A)Has an exchange rate decrease.
B)Utilizes high tariffs.
C)Has a budget deficit.
D)Has a trade deficit.

Accepted Answer

A trade deficit occurs when a country imports more goods than it exports. Therefore, if the value of goods imported into France exceeds the value of French exports, France has a trade deficit.

Question 6

Japanese automobile producers sold more of their Japanese production overseas than they sold in Japan. Their business strategy emphasizes:
A)importing.
B)licensing.
C)dumping.
D)exporting.

Accepted Answer

The fact that Japanese automobile producers sold more cars produced in Japan overseas than in Japan itself indicates that their business strategy involves a heavy emphasis on exporting. This is likely due to factors such as the high quality of Japanese cars, competitive pricing, and a concerted effort to expand their marketplace beyond Japan's borders.

Question 7

The nation of Redland reported that its imports for the previous year were $4 billion greater than its exports. During the same period, Redland reported a favorable balance of payments. This information suggests:
A)Redland has made an error in their reporting. The nation must have had a balance of payments deficit since more money flowed out of Redland for imports than flowed into the country for its exports.
B)Redland's gold reserves have increased in value.
C)money inflows from tourism, foreign aid, foreign investment and other sources more than offset Redland's trade deficit.
D)Redland devalued their currency to obtain a more favorable exchange rate.

Accepted Answer

A favorable balance of payments indicates that Redland received more money from foreign sources than it paid out for imports. This could include money inflows from tourism, foreign aid, foreign investment, and other sources which offset the trade deficit. Therefore, choice (C) is the best answer.

Question 8

According to Reaching Beyond our Borders box, the king of global franchising is:
A)Burger King.
B)McDonald's.
C)Taco Bell.

Accepted Answer

According to the Reaching Beyond our Borders box, McDonald's is the king of global franchising with more than 37,000 restaurants in over 120 countries. The article states that McDonald's is "the largest and most successful global franchising company in the world."

Question 9

The president of Auto Parts of America Corporation recently testified before Congress, urging them to limit the flow of imported automobile parts into the United States. He contended that these imports were priced lower than foreign producers were charging for them in their own countries. He believes foreign producers are:
A)dumping.
B)exercising trade deficits.
C)promoting free trade.
D)exhibiting ethnocentricity.

Accepted Answer

Dumping refers to the practice of foreign producers selling their products in a foreign market at a lower price than what they charge in their own domestic market. The president's belief that imported automobile parts are priced lower than what foreign producers charge in their own countries suggests that they may be engaging in dumping, hence the best answer is A. The other options, exercising trade deficits, promoting free trade, and exhibiting ethnocentricity, do not accurately describe the situation the president is presenting.

Question 10

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service is a:
A)licensor.
B)joint venture.
C)foreign subsidiary.
D)host company.

Accepted Answer

A foreign subsidiary is a form of foreign direct investment where a domestic company purchases a company in a foreign country to produce a similar product or service. A licensor allows a foreign company to use its intellectual property or technology, while a joint venture is a partnership between two or more companies to create a new business entity. A host company is the company that is native to the country in which the investment is being made.

Question 11

An American firm recently criticized a Chinese steel producer for charging a lower price for its steel in the United States than it charges in China. If proven to be true, the Chinese firm has engaged in .
A)industrial protectionism
B)a low labor cost strategy
C)dumping
D)exchange rate manipulation

Accepted Answer

If a Chinese firm is charging a lower price for its steel in the United States than it charges in China, it is engaging in 'dumping', which is the practice of exporting goods at a price lower than the selling price of a similar product in the market of the exporting country. This can harm domestic producers in the importing country and distort global markets.

Question 12

According to the material in the "Reaching Beyond Our Borders" box in Chapter 3, which of the following statements best describes McDonald's current involvement in global markets?
A)McDonald's focus is on the U.S. market, and currently has no plans to participate in global markets.
B)The key to McDonald's success worldwide is its adherence to its U.S. menu as standard throughout all of its international franchises.
C)McDonald's global market success reflects its willingness to adapt its menu to local tastes and culture.
D)Unlike Kentucky Fried Chicken and Burger King, McDonald's continues to experience problems abroad due to its inability to adapt to local culture.

Accepted Answer

The "Reaching Beyond Our Borders" box in Chapter 3 describes McDonald's global market success as reflecting its willingness to adapt its menu to local tastes and culture.

Question 13

The federal government created to help small and medium sized businesses get involved in exporting.
A)the World Trade Organization
B)Federal Export Loan Banks
C)Export Assistance Centers
D)the Federal Trade Promotion Commission

Accepted Answer

Export Assistance Centers are specifically designed by the federal government to help small and medium-sized businesses enter the international market. These centers provide guidance and resources on exporting, including market research, trade education, and financial assistance. The other options listed do not specifically focus on providing support for small and medium-sized businesses looking to export.

Question 14

As a business strategy, the strategy behind "dumping" is to .
A)gain a foothold in a new market
B)better utilize e-commerce opportunities
C)avoid trade protectionist laws
D)achieve eligibility for foreign aid

Accepted Answer

The strategy behind "dumping" is to gain a foothold in a new market. This is done by selling goods at a lower price than the market value in order to undercut competitors and gain market share. This can help a company establish itself in a new market and increase their customer base, which can lead to long-term profits. However, it can also harm local businesses and is often considered unethical.

Question 15

Monique's Unique Tile Boutique offers decorative tile from around the world. The owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer. Monique participates in .
A)importing
B)licensing
C)dumping
D)exporting

Accepted Answer

Monique's Unique Tile Boutique imports tile from other countries, as the owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer.

Question 16

Last year, the nation of Kwansai reported that it had a favorable balance of trade even though it imported $11 billion worth of goods. This indicates that Kwansai:
A)exported $11 billion worth of goods.
B)exported more than $11 billion worth of goods.
C)overpriced the value of its exports.
D)exported less than $11 billion worth of goods.

Accepted Answer

The answer of Last year, the nation of Kwansai reported...

Question 17

is an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell the parent company's product or service to others in a given territory in a specified manner.
A)Franchising
B)Contract manufacturing
C)Import trading
D)Export trading

Accepted Answer

Franchising is the arrangement where a person or entity (franchisee) is granted the right to use the business name, products, and services of the parent company (franchisor) for a certain fee or percentage of sales. The franchisor provides the franchisee with support, training, and marketing materials to ensure the success of the business.

Question 18

Last year, the nation of Tigerland imported goods totaling $500 million and exported products totaling $386 million. Tigerland experienced a(n):
A)unfavorable balance of trade.
B)favorable balance of trade.
C)trade surplus.
D)benefit from membership in a free trade zone.

Accepted Answer

Tigerland had a trade deficit of $114 million, meaning it imported more goods than it exported. This is an unfavorable balance of trade.

Question 19

An important principle for firms desiring to export is:
A)sell to countries with high standards of living.
B)keep in mind that American methods are probably always best.
C)find a need in the global market and fill it.
D)if your product sells well in the U.S. it will sell well globally.

Accepted Answer

Firms desiring to export should find a need in the global market and fill it. This requires market research and understanding of the needs, preferences, and regulations of potential target markets. Selling to countries with high standards of living may not guarantee success if the product does not meet their specific needs or preferences. Assuming that American methods are always best may not be accurate or culturally appropriate. Also, the success of a product in the U.S. does not necessarily translate to success in the global market, which has different competitive dynamics and consumer behavior.

Question 20

A represents a long-term partnership between two or more companies established to help each firm build competitive market advantages, without sharing the cost of risk.
A)multinational cooperative
B)shared venture
C)global franchise
D)strategic alliance

Accepted Answer

A strategic alliance is a long-term partnership between two or more companies established to help each firm build competitive market advantages, without sharing the cost of risk. A multinational cooperative involves sharing costs and risks. A shared venture is typically a short-term partnership. A global franchise involves licensing a brand name and business model.

Quiz 3: Doing Business in Global Markets

Nikkei Auto Parts testified before Congress defending the company against an accusation that it was dumping auto parts on the U.S. market. In her testimony, the president claimed . Using traditional guidelines, Congress determined that Nikkei was not dumping.

are specialists that match buyers and sellers from different countries and provide services to ease the process of entering global markets.

A is a partnership in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project.

When a company's strategy is the firm makes arrangements for a foreign manufacturer to produce the product. The domestic company's label and/or trademark are attached to the completed product.

The value of goods imported into France exceeds the value of French exports. This indicates that France:

Japanese automobile producers sold more of their Japanese production overseas than they sold in Japan. Their business strategy emphasizes:

The nation of Redland reported that its imports for the previous year were $4 billion greater than its exports. During the same period, Redland reported a favorable balance of payments. This information suggests:

According to Reaching Beyond our Borders box, the king of global franchising is:

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service is a:

An American firm recently criticized a Chinese steel producer for charging a lower price for its steel in the United States than it charges in China. If proven to be true, the Chinese firm has engaged in .

According to the material in the "Reaching Beyond Our Borders" box in Chapter 3, which of the following statements best describes McDonald's current involvement in global markets?

The federal government created to help small and medium sized businesses get involved in exporting.

As a business strategy, the strategy behind "dumping" is to .

Monique's Unique Tile Boutique offers decorative tile from around the world. The owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer. Monique participates in .

Last year, the nation of Kwansai reported that it had a favorable balance of trade even though it imported $11 billion worth of goods. This indicates that Kwansai:

is an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell the parent company's product or service to others in a given territory in a specified manner.

Last year, the nation of Tigerland imported goods totaling $500 million and exported products totaling $386 million. Tigerland experienced a(n) :

An important principle for firms desiring to export is:

A represents a long-term partnership between two or more companies established to help each firm build competitive market advantages, without sharing the cost of risk.