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Exam 3: Doing Business in Global Markets

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Question 141

Multiple Choice

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Under a system of floating exchange rates,changes in the value of the U.S.dollar relative to other currencies are the result of:

A) negotiated rate adjustments between the U.S.government and the World Trade Organization.
B) decisions made by the Federal Reserve Board of Governors in order to implement monetary policy.
C) fluctuations in the world price of gold.
D) changes in the supply of and/or demand for dollars in the global currency market.

E) B) and D)
F) B) and C)

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Question 142

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Many foreign students in U.S.colleges and universities have discovered profitable opportunities by importing goods from their home countries into the United States.

A) True
B) False

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Question 143

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People from other nations sometimes comment on the ethnocentric attitudes of U.S.business people.This indicates that American business people:

China has approximately 95% of the world's Neodymium,a rare earth metal used in consumer and military electronics and contemporary technology.The fact that this is a necessary metal for the production of many products we use today-everything from smart-phones to smart-bombs-means China can almost name its price! Which of the following describes this situation?

Comparative advantage theory states that a country should sell to other countries those products that it produces most efficiently and buy from other countries those products it cannot produce as efficiently.

Recently a news article described the pirating of music originally recorded by popular celebrities in the U.S.It seems that a recording made in the U.S.can be copied within a couple of hours and sold abroad.The U.S.government is able to readily prosecute foreign companies involved in these illegal actions.

One reason countries trade with other countries is that even technologically advanced nations cannot produce all the products their people want and need.

Protective tariffs are designed to raise money for the government.

When the U.S.provides foreign aid to Israel and Egypt,a balance of payments outflow occurs.

One advantage of licensing as a strategy to enter the global market is the sharing of trade secrets.

In any given year,the United States' cash outflow to other nations exceeds its cash inflow from other nations.

The country of New Florentina mines more fluorite each year than it needs for its own manufacturing purposes.Recently,a neighboring country complained that its manufacturing sites could buy fluorite from New Florentina cheaper than they could buy it from its own mines.A government trading expert's claim that New Florentina is dumping fluorite onto its neighbor's market is probably accurate.

Efficient currency exchange markets have eliminated countertrade in global business transactions.

______________ was an 18^th century belief that a nation should try to sell more goods to other nations than it buys from them.

Carrie,a United States resident says that her home computer was made in Japan.Carrie purchased a(n) :

The same proven management styles used by companies in their domestic operations can be employed in their foreign subsidiaries.

The concept of free trade means:

Only large firms have the resources needed to successfully compete in the global environment.

An import quota is a complete ban on the import or export of certain products.

The main goal of the General Agreement on Tariffs and Trade (GATT)was to reduce trade restrictions among world nations.