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Exam 3: Doing Business in Global Markets

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Question 181

True/False

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

A) True
B) False

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Question 182

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Foreign travel can help in identifying global business opportunities.

A) True
B) False

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Question 183

Multiple Choice

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The world market is approximately _____________.

The U.S.government is reducing Export Assistance Centers due to businesses' lack of interest in their support.

When Nestlé,a Swiss company,purchased Ralston Purina,a U.S.company,Ralston Purina became a foreign licensee.

Trade protectionism:

The Connecting with Small Business box titled "Improving Sight through Entrepreneurship" is about:

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.

The country of Nelly exports $250 of goods and services and imports $170 of goods and services.Nelly has an unfavorable balance of trade of $80.

Kodak contracts with a firm in Taiwan to manufacture Kodak digital cameras.This is an example of a joint venture.

A benefit of contracting with export trading companies is:

Trade protectionism is the use of government regulations to encourage the import of goods and services.

India and Russia are emerging markets that present enormous business opportunities.

As surgical procedures become extremely costly (upwards of $100,000 per surgery) ,which of the following health benefits strategies is being considered,if not implemented,by American companies? According to the Making Ethical Decisions box titled "Need an Operation? Take a Vacation":

Define offshore outsourcing and explain its pros and cons.

Mini-Case Since he was five years old,Rhett Tenna struggled with poor eyesight.He suffered through all the names that went along with wearing eyeglasses for most of his young life.Rhett eventually switched from traditional eyeglasses to contact lens,but he always wondered why glasses were considered to be "ugly" and not fashionable.After graduation from college,Rhett set out on a lifelong goal: to make eye wear synonymous with high fashion.He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses,and replace it with a sense of flair and high fashion.From the day he opened his first store,Rhett's plan met with resounding success.Today,"The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states,and a manufacturing plant that turns out designer frames. A recent internal audit,however,suggested a problem that Rhett had not anticipated.The study indicated that the U.S.market is just about saturated and growth of "The Eyes Have It" stores will be very limited.The audit concerned Rhett until he recognized an untapped market existed overseas.If people all over the world have the same problem,the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"! -Initially,Rhett believed he should maintain his production facilities within the United States and simply export his designer eyeglass frames to foreign sellers.However,he lacked expertise in exporting.Rhett decided to see if the federal government could provide any help by contacting a(n) :

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 a(n) :

Leigh has created a technique for drying flowers that retains the vibrant color of certain flowering plants.Although out of style in the U.S. ,dried flower arrangements are still highly sought after in several European and Asian nations.It is difficult to preserve the ingredients that go into her formula for more than a month.She decides to partner with firms in other nations to make and sell the formula,but you suggest she license the formula to foreign companies,and agree to royalties when they create the formula and sell it.Your advice makes better sense.

The outlook for growth in global trade appears to be:

In global markets,no central system of law exists.