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Exam 3: Doing Business in Global Markets

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Question 161

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A Chinese steel manufacturer is selling certain types of steel in the United States at a price significantly lower than it sells the same steel in its home market.This practice may be a violation of U.S.law. U.S.laws against dumping are specific and require foreign firms to price their products to include 10 percent overhead costs plus an 8 percent profit margin,making the price of goods in the U.S.at least the same as the price in the home market.

A) True
B) False

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Question 162

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In any given year,the United States' cash outflow to other nations exceeds its cash inflow from other nations. The U.S.has bought more goods from other nations than it has sold to other nations.Thus it owes more money to other nations than other nations owe the U.S.Its cash outflow exceeds its cash inflow.

A) True
B) False

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Question 163

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Foreign travel can help in identifying global business opportunities.

As the most powerful economy in the world,the United States does not need to concern itself with having an unfavorable balance of payments. The balance of payments is the difference between money coming into a country from exports and money leaving the county from imports plus money flows from other sources,including foreign investments.The United States,like any other nation,can have an unfavorable balance of payments.

A common market is a group of countries that have no internal tariffs among member nations,yet have a common external tariff.

The complete ban on the sale of Cuban cigars in the United States is an example of an import quota. The ban on Cuban cigars is an example of an embargo,which represents a complete ban on the import or export of certain products.An import quota limits the number of products in certain categories that a nation can import.

When competing in global markets,business organizations utilize a variety of strategies to reach foreign buyers.

Global trade with China is:

An advantage of licensing is that licensors spend little or no money to produce and market their products.These costs are born by the licensees.

One advantage of free trade is:

The __________ is the difference between money flowing into a country from exports,and money leaving the country for imports,plus money flows coming from other factors such as tourism,foreign aid,military expenditures,and foreign investment.

If global trade experts predict that the value of the dollar will soon fall,it will result in:

Today,there are more countries that have some form of absolute advantage in a product or service,than years ago.

A fast-growing form of foreign direct investment is ______________ which are government controlled investments in foreign companies.

Profitable opportunities in global markets are diminishing for small and medium sized businesses.

In order to enjoy the highest standard of living possible,comparative advantage theory states that all nations should strive to become self-sufficient. The theory of comparative advantage states that a country should export those goods that it produces most efficiently and import those goods that it cannot produce as efficiently.

One advantage of franchising is that the parent corporation does not need to concern itself with adapting to the culture of another country.

Effective marketing strategies focus on the product and ignore the sociocultural differences in the global environment.

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.

Strategic alliances almost always result in one company taking over the financial interests of another company. A strategic alliance represents a long-term partnership between two or more companies established to help each firm build competitive market advantages.The firms maintain separate financial management.Their purpose is to help each other develop new market opportunities.