Question 1

NAFTA is the New American Foreign Trade Amendment,which allows for balanced trade with the European Union (EU).

Accepted Answer

NAFTA stands for North American Free Trade Agreement and it governs trade relations between the United States, Canada, and Mexico. It has no connection with the European Union.

Question 2

To protect its local vodka industry,Russia allows foreign manufacturers to have only one percent of the Russian vodka market.Russia uses quotas to control foreign competition.

Accepted Answer

Russia's government uses quotas to limit the amount of foreign vodka that can be sold in the country to no more than one percent of the total vodka market. This is done to protect the local vodka industry from foreign competition.

Question 3

Just as mass marketing assumes a large market made up of consumers who are alike,global marketing assumes markets throughout the world are becoming more alike.

Accepted Answer

False

Question 4

GATT,NAFTA,and the EU are all examples of market groupings.

Accepted Answer

GATT and NAFTA are trade agreements,and the EU is a market grouping.

Question 5

The United States government prohibits the importation of Havana cigars because of political differences with Cuba.This is an example of a boycott.

Accepted Answer

The prohibition on the importation of Havana cigars is a form of boycotting Cuban goods due to political differences with the government of Cuba.

Question 6

Vast differences in natural resources created international dependence and huge shifts of wealth.

Accepted Answer

Countries with abundant natural resources, such as oil, minerals, and timber, have been able to export these commodities and generate significant wealth. Other countries, lacking in these resources, have had to rely on imports and trade, creating international dependence and economic disparities.

Question 7

Having a global vision means management recognizes and reacts to international marketing opportunities,is aware of threats from foreign competitors in all markets,and effectively utilizes international distribution networks.

Accepted Answer

This statement accurately describes what having a global vision means in terms of international marketing and management.

Question 8

Even though it is not actively involved in global marketing,Hennessey Enterprises,a U.S.-based business,agreed to sell two thousand of its stress-reducing products to a distribution company in Norway.This would be an example of exporting.

Accepted Answer

This is an example of exporting because Hennessey Enterprises is selling its products to a distribution company in another country (Norway).

Question 9

Even if all parties to a global business transaction are fluent in a common language,other cultural norms could interfere with the communication process.

Accepted Answer

Cultural norms can include nonverbal communication, body language, values and beliefs, attitudes towards hierarchy and authority, negotiating styles, and more, which can all impact communication even if a common language is spoken.

Question 10

U.S.-based Procter & Gamble and Italian-based Fater agreed to produce and market diapers for the European market.This is an example of a joint venture.

Accepted Answer

A joint venture is an agreement between two or more companies to form a new entity and combine their resources and expertise to accomplish a specific task, such as entering a new market. In this case, Procter & Gamble and Fater have agreed to produce and market diapers for the European market.

Question 11

Licensing agreements reduce the risk for manufacturers,and sometimes even remove the requirement for a manufacturer to produce its own product.

Accepted Answer

Licensing agreements allow a manufacturer to use someone else's technology or product design, reducing the risk associated with developing a new product from scratch. In some cases, a licensing agreement may even eliminate the need for a manufacturer to produce its own product if it can simply license or purchase it from another company.

Question 12

Multinational companies typically begin the development of their global business with direst investment and continue using this strategy throughout the company's lifespan.

Accepted Answer

Multinational companies may also use other strategies such as franchising, licensing or joint ventures in addition to direct investment. They may also change their strategy over time depending on market conditions and business objectives.

Question 13

The form of global organization that provides the highest potential for return on investment as well as the highest level of risk is contract manufacturing.

Accepted Answer

Direct foreign investment carries the highest risk level and the greatest potential return on investment.

Question 14

The U.S.government limits the amount of sweetened candy,cotton,milk,and cotton that can be imported This is an example of a tariff.

Accepted Answer

The limit on the amount of imports is an example of a quota, not a tariff. A tariff is a tax on imported goods.

Question 15

The same environmental factors that operate in the domestic market also exist internationally.These factors (culture,economic development,political and legal structure,demographics,and natural resources)should be examined regardless of the country.

Accepted Answer

The statement is true. Environmental factors operate in both domestic and international markets, and should be examined regardless of the country.

Question 16

A major benefit of globalization is its creation of jobs and wealth.

Accepted Answer

Globalization has led to the expansion of markets and increased trade, which has created jobs and wealth in many countries. Companies can tap into new markets and benefit from economies of scale, while workers can find employment in industries that may not have existed before. However, it is important to note that the benefits of globalization are not evenly distributed and there can be negative consequences, such as exploitation of workers and environmental degradation.

Question 17

The United States is the only country that actively engages in global marketing.

Accepted Answer

Many countries actively engage in global marketing, including major global players like China, Japan, and Germany, as well as emerging market countries like India and Brazil. Global marketing is necessary for companies looking to expand their reach and target consumers in different parts of the world.

Question 18

While some countries have elements of both capitalism and socialism,most nations are at one political extreme or the other.

Accepted Answer

Rarely will a political environment be at one extreme or the other.Rather,elements of many systems are often present.

Question 19

The major disadvantage of licensing agreements is that international companies cannot maintain control over their licensees.

Accepted Answer

Two common ways of maintaining effective control over licensees are shipping one or more critical components from the United States or locally registering patents and trademarks to the U.S.firm.

Question 20

According to research done by the World Bank,countries with the least amount of business regulation foster the strongest economies.

Accepted Answer

The World Bank has conducted research that supports this claim. Countries with fewer business regulations often have more entrepreneurship and innovation, leading to economic growth.

Quiz 4: Developing a Global Vision27