24) Which of the following is not a management issue in the decision to export?
A) Management objectives
B) Experience
C) Personnel
D) Production capacity
E) Personal philosophy
Learning Obj.: LO 3
AACSB: Analytical thinking
25) Reasons to export include ________.
A) Increase sales and profits
B) Gain global market share
C) Reduce dependence on existing markets
D) Stabilize seasonal market fluctuations
E) All of the above
Learning Obj.: LO 2
AACSB: Analytical thinking
26) Information resources for international trade do not include which of the following?
A) United States Department of Commerce
B) Small Business Development Centers
C) United State Export Assistance Centers
D) District Export Councils
E) North American International Committee
Learning Obj.: LO 4
AACSB: Application of knowledge
27) Companies that are interested in exporting have many resources available for the exploration
of their options including ________.
A) World Trade Center affiliates
B) International trade lead service
C) Trade intermediaries
D) Trade missions
E) All of the above
Learning Obj.: LO 2
AACSB: Application of knowledge
7
28) ________ is the relative value between one currency and another. It describes the buying
power of a currency.
A) The foreign exchange rate
B) The overseas exchange rate
C) The foreign conversion rate
D) The foreign exchange ratio
E) The alien exchange rate
Learning Obj.: LO 3
AACSB: Analytical thinking
29) Which of the following is not a reason for acquiring human capital resources globally?
A) Scarcity of qualified labor in domestic markets
B) Scarcity of skilled labor in domestic markets
C) Prohibitively high cost of local labor
D) Local market containing a sufficient supply of labor
E) All of the above are reasons.
Learning Obj.: LO 1
AACSB: Reflective thinking
30) ________ can be a critical part of global market expansion because it/they create(s) unique,
highly specialized opportunities.
A) Intellectual property
B) Products
C) Technologies
D) All of the above
E) None of the above
Learning Obj.: LO 1
AACSB: Reflective thinking
31) The Member States of the European Free Trade Association (EFTA) are England,
Liechtenstein, Norway, and Switzerland.
Learning Obj.: LO 5
AACSB: Application of knowledge
8
32) If products, labeling, and packaging do not have to be modified and if incremental costs can
be covered, exporting is not a successful business strategy.
Learning Obj.: LO 2
AACSB: Analytical thinking
33) A major reason to export goods to foreign markets for U.S. companies is to stabilize seasonal
market fluctuations.
Learning Obj.: LO 2
AACSB: Analytical thinking
34) Royalties are fees paid to a licensor by a licensee based upon production or sales of the
licensed product.
Learning Obj.: LO 2
AACSB: Analytical thinking
35) The EWCP is a loan-guaranty program offered to commercial banks by the SBA to
encourage lending to businesses that generate export sales and need working capital.
Learning Obj.: LO 4
AACSB: Analytical thinking
36) The European Union is a political and economic confederation formed in 1993 that has
addressed foreign and security policy, created a central bank, and adopted a common currency.
Learning Obj.: LO 5
AACSB: Application of knowledge
37) The International Trade Loan program from the SBA is for exporters and for companies that
have been adversely affected by imports and is intended to improve the borrower’s competitive
position.
Learning Obj.: LO 4
AACSB: Application of knowledge
9
38) Regional Trade Agreements focus on strengthening barriers at the border and increasing
tariffs to increase market access between member states.
Learning Obj.: LO 5
AACSB: Application of knowledge
39) A strategic alliance involving two or more firms in which each partner provides a particular
set of skills or resources is the worst way for an entrepreneur to reach global markets.
Learning Obj.: LO 2
AACSB: Reflective thinking
40) What is an acceptable business practice in one country can be considered rude and
inappropriate in another.
Learning Obj.: LO 3
AACSB: Reflective thinking
41) Cultural and linguistic dissimilarities between employees of different countries can be a
source of inspiration and learning as well as friction and miscues.
Learning Obj.: LO 3
AACSB: Reflective thinking
42) Because of intense price competition at the global level, you may have to import to remain
competitive.
Learning Obj.: LO 2
AACSB: Analytical thinking
43) A small business started today can be “born global,” with the intention of operating across
geographic and political borders from the beginning.
Learning Obj.: LO 1
AACSB: Reflective thinking
10
44) Some established franchisors make territories available internationally, typically by country
or region.
Learning Obj.: LO 2
AACSB: Application of knowledge
45) Economic risk is the possibility that changes in the economy of the country where it does
business will cause financial or other harm.
Learning Obj.: LO 3
AACSB: Reflective thinking
46) What economic and political risks could affect your decision to do business internationally?
How could you reduce those risks?
Learning Obj.: LO 3
AACSB: Analytical thinking
47) Discuss how exporting can expand your possible market.
Learning Obj.: LO 2
AACSB: Analytical thinking
48) What are some disadvantages of exporting that could have a negative impact on your
business?
Learning Obj.: LO 2
AACSB: Reflective thinking
11
49) How could you utilize loan and finance programs for small businesses to enter the
international marketplace?
Learning Obj.: LO 4
AACSB: Analytical thinking
50) What resources might you more easily acquire from a foreign country? How could that help
your business?
Learning Obj.: LO 1
AACSB: Reflective thinking
12