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Exam 3: Doing Business in Global Markets

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Question 131

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The purpose of the General Agreement on Tariffs and Trade (GATT) is to:

A) facilitate global trade.
B) create common market arrangements in specific geographical regions.
C) negotiate an end to civil wars.
D) establish a set of international property right laws.

E) All of the above
F) A) and B)

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Question 132

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Successful multinational corporations disregard cultural differences between countries where they own property and perform business transactions.

A) True
B) False

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Question 133

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__________ 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.

With GDP totaling more than $624 billion, the common market known as COMESCA is:

A major concern voiced by U.S. critics of the North American Free Trade Agreement (NAFTA) was that it would result in:

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.

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

First Engineering, a large U.S.-based mechanical engineering firm, is considering entering the global market. Upon careful analysis of the global market, they will find that global trade:

Today, over 90% of the companies doing business globally believe it is important for their employees to have experience working in other countries.

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.

U.S. exports boost the U.S. economy.

Recently the United States has experienced its highest trade deficits with China.

A devaluation of the U.S. dollar would make American goods cheaper to foreign buyers.

Idle Time Gaming, Inc., needed silicon wafers that it knew could be mass-produced efficiently by Silicon City, Inc., a start-up firm in India. The Indian company needed MSG (metallurgical grade silicon) in order to make the wafers, which it knew it could get from a Chinese firm. The Chinese firm (mostly owned by the Chinese government) agreed to supply the silicon to the Indian company if it could get a certain quantity of gaming hardware from Idle Time. This beneficial exchange is described as countertrading.

Which of the following statements best describes the theory of comparative advantage?

After finishing college, Nathan joined his uncle's company in Miami, FL, a company that buys bauxite, copper, and other minerals from the country of Chile, and brings them into the U.S. Everyday, he brokers trades with mines in Chile. His uncle's company is in the export business.

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

Contract manufacturing is a form of outsourcing.

If a protective tariff is placed on an imported product, the added cost will go to the government.

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