88) The Commercial Service International Contacts List (CSIC) and the Country Directories of
International Contacts (CDIC) provide the same information but organized in different ways.
Topic: Resources for Locating a Trade Intermediary
AACSB: Analytic Skills
89) One way to avoid the failure of a joint venture is to not use any kind of an agreement that
details what to do if the business fails, as this just predestines the joint venture’s failure.
Topic: Joint Ventures
AACSB: Analytic Skills
90) Foreign licensing is when a business buys and sells products in many countries, either in its
own name, or as an agent for its buyer-seller clients.
Topic: Foreign Licensing
AACSB: Analytic Skills
91) The licensing potential for intangibles, such as technology, trademarks, etc., is often greater
than the licensing opportunities for products.
Topic: Foreign Licensing
AACSB: Analytic Skills
92) While franchise outlets are throughout the world, Africa is the primary market for U.S.
franchisers.
Topic: International Franchising
AACSB: Analytic Skills
93) A small business exporting to Hungary would likely have to engage in barter or countertrade
since Hungarian currency is not convertible into any other currency.
Topic: Countertrading and Bartering
AACSB: Analytic Skills
21
94) Successful bartering is easier than countertrade but requires finding a business with
complementary needs.
Topic: Countertrading and Bartering
AACSB: Analytic Skills
95) Most Export Management Companies (EMCs) are merchant intermediaries, working on a
buy-and-sell arrangement with domestic small companies.
Topic: Relying on Trade Intermediaries
AACSB: Analytic Skills
96) ETCs usually perform both import and export trades across many countries’ borders.
Topic: Relying on Trade Intermediaries
AACSB: Analytic Skills
97) Most products sold in the United States require major modifications before they can be sold
in foreign markets.
Topic: Exporting
AACSB: Analytic Skills
98) An important management issue to consider before going international is to decide who will
be responsible for the export entity’s organization and staff.
Topic: Management Issues in the Exporting Decision, Table 12.3
AACSB: Analytic Skills
99) Lack of export financing remains a significant barrier to small businesses selling in foreign
markets.
Topic: Exporting
AACSB: Analytic Skills
100) The best way for Specialty Building Supplies to move into international markets, given
their expertise and their Autovent product, would be direct exporting.
Topic: Exporting
AACSB: Analytic Skills
22
101) The key to successfully establishing an international location is properly screening for the
right partner company with compatible goals and products/services.
Topic: Establishing International Locations
AACSB: Analytic Skills
102) Usually, the first step a small business takes when getting its products into international
markets is setting up permanent offices in foreign countries.
Topic: Establishing International Locations
AACSB: Analytic Skills
103) An advantage to establishing an international location is lower start-up costs in the foreign
country.
Topic: Establishing International Locations
AACSB: Analytic Skills
104) Small companies often find that competing in foreign markets and selling to foreign
customers makes them tougher competitors at home.
Topic: Establishing International Locations
AACSB: Analytic Skills
105) Very few nations interfere with free international trade by erecting trade barriers with
tariffs, quotas, and embargoes.
Topic: Barriers to International Trade
AACSB: Analytic Skills
106) The three biggest domestic barriers to exporting facing small businesses are the
appropriateness of the product, political and cultural information, and finding a suitable foreign
agent to assist them.
Topic: Domestic Barriers
AACSB: Analytic Skills
23
107) When a government imposes a quota on a particular imported good, the effect is to raise the
price customers must pay for that good.
Topic: Tariff Barriers
AACSB: Analytic Skills
108) American small business owners are often astounded at how much less government
regulation there is in foreign countries.
Topic: Political Barriers
AACSB: Analytic Skills
109) In most other countries, American business owners and managers find human resource laws
to be very similar, if not more stringent, than they are in the United States.
Topic: Business Barriers
AACSB: Analytic Skills
110) Cultural differences among countries have little impact on international trade.
Topic: Cultural Barriers
AACSB: Analytic Skills
111) Fortunately for U.S. business owners, American customs and habits have become the
standard for proper business behavior around the world.
Topic: Cultural Barriers
AACSB: Analytic Skills
112) The World Trade Organization was formed as a consequence of the growth of the European
Community.
Topic: WTO
AACSB: Analytic Skills
113) GATT will probably bring 2 million jobs and as much as $1 trillion to the U.S. economy
over the next decade.
Topic: WTO
AACSB: Analytic Skills
24
114) In Spain, patience is a must for conducting business; Spaniards like to get to know business
associates before working with them.
Topic: Cultural Barriers
AACSB: Analytic Skills
115) An American business owner greeting a Japanese executive should use both a handshake
and a bow.
Topic: Cultural Barriers
AACSB: Analytic Skills
116) NAFTA is an agreement between the United States, Canada, Mexico, Argentina, and Chile,
forming a free trade arena among these countries.
Topic: NAFTA
AACSB: Analytic Skills
117) NAFTA includes provisions reducing tariff and non-tariff barriers and toughening health
and safety standards.
Topic: NAFTA
AACSB: Analytic Skills
118) In a domestic joint venture, the businesses share the responsibility and the costs of getting
export licenses and permits, and they split the venture’s profits.
Topic: Joint Ventures
AACSB: Analytic Skills
119) The most important ingredient in the recipe for a successful joint venture is choosing the
right country or region.
Topic: Joint Ventures
AACSB: Analytic Skills
25
120) The goal of countertrading is to help offset the capital drain from the foreign country’s
purchases.
Topic: Countertrading and Bartering
AACSB: Analytic Skills
121) The first step on how to establish an exporting program is to analyze the product or service.
Topic: Exporting
AACSB: Analytic Skills
122) Simply duplicating the practices companies have adopted (and have used successfully) in
the domestic market and using them in foreign markets is an effective strategy for entrepreneurs.
Topic: Business Barriers
AACSB: Multicultural and Diversity
123) Understanding cultural differences is one of the most important keys to international
business success.
Topic: Cultural Barriers
AACSB: Analytic Skills
124) A free trade area is a region in which there are no tariffs or taxes on imports and exports.
Topic: NAFTA
AACSB: Analytic Skills
125) Export / import, the exchange of goods and services for other goods and services, is another
way of trading with countries lacking convertible currency.
Topic: Countertrading and Bartering
AACSB: Reflective Thinking
126) In a barter exchange, a company that manufactures electronics components might trade its
products for the coffee that a business in a foreign country processes, which it then sells to a third
company.
Topic: Countertrading and Bartering
AACSB: Reflective Thinking
26