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Exam 3: Doing Business in Global Markets

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Question 181

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A risk unique to firms with direct investment in a foreign county is the potential takeover of the firm's assets by the government of that country.This takeover is called an) :

A) hostile takeover.
B) political bias.
C) appropriation.
D) expropriation.

E) A) and B)
F) A) and C)

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Question 182

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Last year,the nation of Kwansai reported that it had a favorable balance of trade even though it imported $11 billion worth of goods.This indicates that Kwansai:

A) exported $11 billion worth of goods.
B) exported more than $11 billion worth of goods.
C) overpriced the value of its exports.
D) exported less than $11 billion worth of goods.

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

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Question 183

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Compared to many other industrialized countries,the United States has historically exported a much higher percentage of its products than other countries do.

Country A is extremely efficient in the mining of tin.However,its climate and terrain makes it difficult to produce corn.According to the theory of comparative advantage,Country A should:

A United States firm recently won a large contract with a company in Malaysia,by providing the foreign nation's government officials with American cars and a promise of additional monetary gifts.Clearly,this procedure:

The Foreign Corrupt Practices Act of 1978 created an advantage for American businesspeople to compete in global markets.

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

Governments directly participate in global markets through sovereign wealth funds.

The balance of payments measures the inflows and outflows of money from tourism,foreign aid,military expenditures and foreign investments as well as flows resulting from exports and imports.

If two nations have a dispute over an international patent,the World Trade Organization may be asked to mediate and provide a decision within one year's time.

One goal of the World Trade Organization WTO)is to increase national subsidies on agricultural products.

_______ is a complex form of bartering in which several countries may be involved,each trading products and services,for the products and services of another country.

Responding to pressure from political lobbyists representing the U.S.steel industry,the U.S.government levies a tax on steel products imported from Europe.This is an example of an) :

Nike _________________ its products in foreign countries,where labor is cheap and production sites are owned by other companies.This strategy allows Nike to experiment in new markets without incurring large start-up costs involved with building their own production facilities.

As students think about a career in the business world today,which of the following is a good strategic suggestion?

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.

The nation of New Maraguay has a small commercial airplane industry that is struggling to keep up with the two large international commercial airplane manufacturers.The other nations in its trading bloc have agreed on an import quota on commercial airplanes,which limits the number of planes that any country in the trading bloc can buy from other airplane manufacturers.This strategy is necessary to help the New Maraguay's airplane manufacturer while it is in its infancy.

Bartering is the exchange of goods or services for other goods or services with no exchange of money traded.

One advantage of licensing is the relatively low cost of entering a foreign market.

_________________ differences such as insufficient electrical power and transportation systems can present special problems for U.S.firms when attempting to enter global markets.