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Exam 3: Doing Business in Global Markets

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Question 151

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A favorable balance of trade occurs when the value of a country's imports exceeds the value of its exports.

A) True
B) False

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Question 152

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When the U.S. provides foreign aid to Israel and Egypt, a balance of payments outflow occurs.

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B) False

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Question 153

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Sociocultural, economic, and legal/regulatory hurdles cause significant challenges in global trade.

Contract manufacturing is a low-cost way for GAP to outsource the production of its clothing designs.

The __________ represents the first attempt to establish a truly global mediation center to resolve international trade disputes.

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.

As a market for U.S. exports, China represents the only major business opportunity on the continent of Asia.

Countries often use trade protectionism measures to protect their domestic industries from foreign competition.

In order to level the playing field in trade between the U.S. and China, U.S. policymakers have called upon China's government to allow the yuan to float freely, as other world currencies. Through government regulation, China maintains an undervalued currency, which results in:

When competing in global markets, business organizations utilize a variety of strategies to reach foreign buyers.

An advantage of forming a joint venture is:

Boasting a $1.6 billion Ketchup brand, the Heinz Company is flying high with a 44% increase in its sales of Indonesian-based ABC, a soy sauce company that it owns. ABC is a _____________ of Heinz.

Which of the following sociocultural forces can have a significant impact on global business operations?

After finishing college, Nathan joined his uncle's company in Miami, FL, a(n) _______ of bauxite, copper, and other minerals from the Chile. Every day, he brokers trades with mines in Chile to buy and transport these minerals into the U.S.

Telewhiz, Inc., just contracted with a firm in the Philippines to provide customer service for its smartphone customers. Although there were cheaper labor markets that Telewhiz could have tapped, customers have reported that they understand English-speaking Filipino people better than English-speaking people in other countries. As an outsourcing option, it is a good compromise.

Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of:

Ozark Bikes, Inc., has information that its bicycles will sell in Vietnam. In order to sell its products in Vietnam, the Vietnamese government requires Ozark Bikes to enter into a partnership (also known as a joint venture) with a domestic firm. Both firms will assume costs and risk in the venture.

Since patent and copyright laws are the same in all nations, they are not of much impact to firms that compete globally.

The principle of mercantilism encouraged nations to keep economics separate from politics.

Small businesses are less involved in global trade today than in the past.