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Exam 3: Global Business

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Question 1

Multiple Choice

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The primary objective of the World Trade Organization is to

A) help underdeveloped nations increase their standard of living.
B) achieve world peace.
C) remove barriers to trade worldwide.
D) enforce worldwide political and trade regulations.
E) promote the invention of new technologies.

F) A) and E)
G) A) and B)

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Question 2

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The land of Narnack has very infertile soil but a large supply of oil.What action should Narnack take? Narnack should

A) specialize in the production of crude oil and trade this for grain and other food products.
B) grow food anyway because its people will need it for survival.
C) focus on attracting tourists to its country and thus purchase the needed supplies of food.
D) specialize in the production of food products such as cereals and bread.
E) import oil to satisfy the country's need for gasoline.

F) A) and D)
G) B) and D)

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Question 3

Multiple Choice

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____ is the exportation of large quantities of a product at a price lower than that of the same product in the home market.

General Motors and Ford products produced in the United States are found around the world.The United States is ____ these automobiles.

Ty'Jeanea works in the snack shop at the school gym.Profits from the snack shop are used to support the school teams.Because the snack shop is profitable and the teams have succeeded due to increased ability to purchase training equipment,the cheerleaders and other school clubs would like to sell items through the snack shop as well.Ty'Jeanea talks to members of the snack shop management team about the possibility of other school clubs selling items through the shop and what it may mean to the shop's profitability.After a lengthy discussion,they agree that other clubs can sell items through the shop,but cannot sell food items;in addition,every club will have to pay the snack shop 20% of its profits.Many of the organizations are discouraged from selling items through the snack shop due to the high cost of doing business there.Ty'Jeanea is sitting in her business class later and the instructor explains trade restrictions placed on imports to limit particular foreign products from entering a country.As she thinks about the lesson,she realizes that if you compared the snack shop to the government,they had not acted to keep other items from being sold through the shop,but merely to raise revenue.Which of the following best describes the kind of trade restriction that Ty'Jeanea is comparing the shop's actions to?

If the Land of Mercury had total exports of $150 billion and total imports of $234 billion,it had a

The Inter-American Development Bank is the largest and oldest regional bank,created in 1959 by 19 Latin American countries and the United States.It is headquartered in

The United States joined with Mexico and Canada to promote the movement of resources and products;it formed a(n)

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?

Purchasing products or materials in other nations and bringing them into one's own country is

The participants in the Kennedy Round have succeeded in reducing tariffs by less than 20 percent.

Balance of payments is a much broader concept than balance of trade.

A complete halt to trading with a particular nation or in a particular product is called an embargo.

What is the difference between an absolute advantage and a comparative advantage?

Selling and shipping raw materials or products to other nations is called

International business includes all business activities that involve exchanges across state boundaries.

Any measure imposed by a government to favor domestic products over foreign products not involving taxes is a(n)

Thomas Bernerd,Inc.Thomas Bernerd,Inc.,manufactures and sells reclining furniture.The company currently operates in the United States but wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first,the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognized,however,that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such,the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.After all the research was completed,the senior managers realized that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties. -Refer to Thomas Bernerd,Inc.Which agency should the managers at Thomas Bernerd,Inc.seek assistance from?

Landfall Service Landfall Service is a lawn furniture company that has been around for many years.It is known for its ability to produce furniture more efficiently than any other company in the nation.In truth,no other companies in any other nation come close.Landfall Service has shipped many of its products internationally.In fact,80 percent of its profits come from international sales.However,the Italian government has imposed a tax on imported furniture items to protect local companies.The Brazilian government,on the other hand,has imposed taxes on Landfall Service products due to the government wanting a piece of the pie.Landfall Service initially thought that these taxes were unfair because it was being singled out.However,after Landfall Service contacted the organization that had the power to mediate this situation,the furniture company realized that the taxation it was subjected to was legal and that there was nothing it could do about it. -Refer to Landfall Service.The Landfall Service does mostly

Japanese tourists come to experience the magic of Disney World and other attractions around Orlando,Florida.These tourists are