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Exam 3: Doing Business in Global Markets

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Question 151

True/False

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A complete ban on the import or export of a specific good is called an embargo.

A) True
B) False

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Question 152

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When a company's strategy is __________ the firm makes arrangements for a foreign manufacturer to produce the product.The domestic company's label and/or trademark are attached to the completed product.

A) franchising
B) contract manufacturing
C) import sourcing
D) export trading

E) A) and D)
F) B) and D)

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Question 153

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Export trading companies assist businesses in reaching buyers,and dealing with customs,documentation,and payment.

When U.S.firms choose to hire skilled and unskilled workers in other countries to produce goods and services,rather than producing them in the United States,we refer to this as __________.

Expropriation occurs when a host government takes over the assets of a foreign company.

Countertrading is a form of exchange where firms will put certain products "on the counter" offering them to foreign customers at a cheaper price than what they would offer them to domestic customers.

In recent years,the government of Saudi Arabia has invested over $900 billion in foreign companies,including several U.S.companies.This move constitutes the creation of a sovereign wealth f70-71und,an emerging type of foreign direct investment.

The Ozark Bike Company recently entered into an agreement with a large Japanese retailer to distribute its bicycles in Japan.Ozark Bike Company sees itself in a favorable position because the Yen is gaining strength compared to the U.S.dollar making it cheaper for Japanese customers to buy U.S.products.

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?

The legislation that prohibits U.S.businesses from making "questionable" or "dubious" payments to foreign officials,to secure business contracts is the _____________.

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

Why does it make sense to trade with other nations?

The Tsingtao Brewing company pays a fee to Anheuser-Busch for the right to brew and distribute Budweiser in Chin A.Tsingtao is the licensor and the fee paid is a royalty.

China and Russia present enormous trading opportunities.However,due to political risks in those counties,foreign direct investment is halted.

An) __________ refers to a complete ban on importing or exporting of products from a specific country.

International trade is not limited to multinational corporations.Small businesses do about 30% of all exporting out of the U.S.

The purpose of enacting some type of protectionist policy toward foreign goods is to limit competition from abroad,particularly when the country has domestic companies that produce and sell the same products and services.

Protective tariffs are designed to raise money for the government.

China's one-party political system,its past human rights abuses,and issues related to counterfeiting of products continue to concern some U.S.firms about doing business there.

A more recent free trade agreement between Cost Rica,the Dominican Republic,El Salvador,Guatemala,Honduras,Nicaragua,and the U.S. ,is known as the Central American Free Trade Agreement.Its strategy is to open new markets for all member countries and to lower tariffs between participating nations.