Question 1

A ____ is issued by the transport carrier to the exporter to prove merchandise has been shipped.

Accepted Answer

A bill of lading is a document issued by a carrier (such as a shipping line, trucking company, or airline) to the exporter as a proof of shipment. It also serves as a receipt of goods, a contract of carriage, and a document of title, meaning it can be used as collateral for a loan or for transfer of ownership.

Question 2

Memories Forever Scrapbooking Company is interested in global expansion but does not want to make a large financial commitment.Therefore, it decides to allow a Japanese company to manufacture and distribute products under the Memories Forever name.This is a(n) ____ agreement.

Accepted Answer

This is a licensing agreement. In a licensing agreement, a company grants another company the right to use its intellectual property (in this case, the Memories Forever name) in exchange for royalties or other compensation. The Japanese company will manufacture and distribute products under the Memories Forever name, but Memories Forever retains ownership and control of the brand. This allows for global expansion without a large financial commitment.

Question 3

Suppose Gillette is seeking a manufacturer in Bangladesh that will produce and market Gillette razors in that country.Gillette expects a royalty from its partner in Bangladesh.Which arrangement will be the best choice for Gillette?

Accepted Answer

Licensing is the best choice for Gillette as it allows the company to grant rights to a local manufacturer to produce and market its razors in Bangladesh in exchange for royalties, aligning with Gillette's expectation of receiving a royalty.

Question 4

In 1967, several Asian countries banded together to reduce the trade barriers between them and encourage trading among themselves.This is known as

Accepted Answer

The Association of Southeast Asian Nations (ASEAN) was formed in 1967 to reduce trade barriers and promote economic integration among member countries in Southeast Asia. It is not a GATT (General Agreement on Tariffs and Trade) or a multinational, and it is not related to the European Union or orderly marketing agreements.

Question 5

A ____ is issued by the exporter's bank, ordering the importer's bank to pay for the merchandise.

Accepted Answer

The answer of A ____ is issued by the exporter's...

Question 6

Eleven republics of the former Soviet Union are members of the

Accepted Answer

The Commonwealth of Independent States (CIS) is a regional intergovernmental organization of former Soviet republics, including Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. It was formed in 1991 as a successor organization to the Soviet Union.

Question 7

A medium-sized hardware manufacturer wants to become deeply involved in exporting, but it does not yet wish to actually manufacture any of its products overseas.The company wants to maintain control over its sales while gaining experience in foreign markets.Which option would be best for this company?

Accepted Answer

Establishing its own sales offices in foreign countries allows the company to maintain control over its sales and gain experience in foreign markets without manufacturing overseas.

Question 8

Which of the following is a potential drawback of licensing?

Accepted Answer

Licensing involves giving another company the right to use your intellectual property or brand. However, if the quality of the licensed product is compromised or inferior, it may reflect poorly on the company providing the license. This can damage its reputation and hurt its sales and profitability.

Question 9

Which of the following are ways to export a product to a foreign market?

Accepted Answer

All of the above options are ways to export a product to a foreign market. Each option has its own advantages and disadvantages depending on the business's resources, goals, and level of experience in exporting. It is recommended for businesses to research and carefully consider each option before making a decision on which approach to take.

Question 10

Who are the members of NAFTA?

Accepted Answer

NAFTA stands for North American Free Trade Agreement, which includes the United States, Canada, and Mexico.

Question 11

The Organization of Petroleum Exporting Countries (OPEC)

Accepted Answer

OPEC was founded in 1960, not in 1975. It was founded as a collective-bargaining unit for its member countries, which were primarily oil-producing nations. The organization's goal was to coordinate policies and prices among its members, in order to secure fair prices for their oil exports. OPEC has been effective at times in controlling the supply of oil and influencing prices on the global market. However, its objective is not completely free trade among its members, as it seeks to maintain a degree of control over their oil exports.

Question 12

CAFTA, NAFTA, OECD, and OPEC are all examples of

Accepted Answer

CAFTA, NAFTA, OECD, and OPEC are all international economic communities. CAFTA (Central America Free Trade Agreement) and NAFTA (North American Free Trade Agreement) are agreements between countries to reduce or eliminate trade barriers between them. OECD (Organisation for Economic Cooperation and Development) is an international organization made up of member countries committed to promoting economic growth and development. OPEC (Organization of the Petroleum Exporting Countries) is a group of countries that produce and export oil, working together to regulate market prices and protect their interests.

Question 13

The four largest gold-producing countries in the world want to form a collective- bargaining unit to provide gold-producing nations with some control of gold prices.These nations will most likely model the unit along the _____.

Accepted Answer

OPEC (Organization of the Petroleum Exporting Countries) is a collective-bargaining unit formed by oil-producing nations to control oil prices. Therefore, it is the most relevant model for gold-producing nations to follow in their formation of a collective-bargaining unit to control gold prices.

Question 14

Ben Schumpert decides his company will start exporting and he wants to start at the most basic level.What action should Ben take to meet his objectives?

Accepted Answer

Selling the company's products to an export-import merchant is the most basic level of exporting. The merchant will then take care of the logistics of exporting and finding foreign consumers. The other options (A, B, C, and D) involve more complex and advanced strategies for exporting.

Question 15

Ford Motor Company, Mazda Motor Corporation, and Matsushita Electrical Industrial Company formed a ____ to make heating and cooling units in Japan for Mazda cars beginning in 1988.The new company's heating and cooling units may also be used in Ford's cars.

Accepted Answer

The collaborative effort between three companies to form a new company specifically for producing heating and cooling units for Mazda cars in Japan is known as a joint venture.

Question 16

____ is a contractual agreement where one firm gives another permission to produce and market its product and brand name in exchange for a fee.

Accepted Answer

Licensing is a contractual agreement where a company (licensor) allows another company (licensee) to use its intellectual property, such as product design or brand name, for a fee or royalty. The licensee has the right to produce and market the licensed product under the licensor's brand name for a limited period of time and in a specific geographic area. It is a common strategy for companies looking to expand their international presence without committing large amounts of investment or resources.

Question 17

A ____ is issued by a bank upon request of an importer stating that the bank will pay an amount of money to a stated beneficiary.

Accepted Answer

A letter of credit is a financial document issued by a bank that guarantees payment to a seller (beneficiary) on behalf of an importer (buyer) for a specific amount of money, subject to the terms and conditions specified in the letter. This provides a level of assurance to both the buyer and the seller, reducing the risk of non-payment or default.

Question 18

____, which serves as a collective-bargaining unit, has been successful in controlling the production and price of oil.

Accepted Answer

OPEC is a cartel made up of countries that serve as a collective-bargaining unit in the oil industry. They work together to control production levels and prices, in order to maintain profitability for their member countries.

Question 19

A(n) ____ will, for a commission or fee, arrange the sale of a company's products to foreign intermediaries.

Accepted Answer

An export-import agent works on behalf of a company and arranges the sale of their products to foreign intermediaries. They receive a commission or fee for their services. Options A, B, C, and E are not accurate descriptions of this type of service.

Question 20

Janet hires an export merchant to help expand her business internationally.After signing contracts with a foreign purchaser outlining the terms of sale and delivery, the exporter will send Janet's merchandise when

Accepted Answer

A letter of credit from the importer's bank ensures that the exporter will receive payment upon shipment of the merchandise. Therefore, the exporter will send the merchandise once Janet's bank receives the letter of credit from the importer's bank.

Quiz 3: Exploring Global Business