32. Which of the following is true about reaching global markets?
a. Under the Foreign Corrupt Practices Act of 1977, it is legal for U.S. firms to attempt to make bribes to
influence policy decisions of foreign governments.
b. A government’s attitude toward cooperation with importers has little impact on marketing to that country.
c. Differences in ethical standards can affect marketing efforts.
d. Bribes and payoffs are considered unethical in all countries and cultures.
e. Bribes and payoffs are supported by U.S. trade policies under certain conditions.
33. The Foreign Corrupt Practices Act of 1977 makes it illegal for U.S. firms to:
a. attempt to make large payments or bribes to influence policy decisions of foreign governments.
b. offer foreign businesses any type of incentive for purchasing their company’s products and services.
c. change their ethical standards when dealing with foreign firms.
d. give even small tips or gifts in countries where such gifts are customary business practices.
e. introduce any type of corruption into foreign businesses that have higher ethical standards than those of the
U.S. firm.
Chapter 8 – Reaching Global Markets
34. If a certain country considered handshakes in business transactions to be taboo and preferred to use nodding, this
would be an example of differences in _____ forces.
a. cultural
b. political
c. sales
d. sociological
e. regulatory
35. When products are introduced into one nation from another, acceptance is far more likely:
a. if prices are set very low.
b. when bribes are paid to local officials to aid distribution.
c. if there are many differences between the two cultures.
d. ifthecountryoforiginhasapositiveimageinconsumers’minds.
e. when retailers are given incentives to push the products.
Chapter 8 – Reaching Global Markets
36. Marketers of computer software, music CDs, and books are particularly affected by cultural differences in:
a. socioeconomic status of citizens.
b. advances in technology.
c. differences in cross-cultural exchange behavior.
d. ethical codes of conduct for businesses.
e. standards regarding intellectual property.
37. Many companies choose to standardize their _____ across national boundaries to maintain a consistent and well-
integrated corporate culture.
a. technology
b. ethical behavior
c. language
d. dress code
e. products
Chapter 8 – Reaching Global Markets
38. In many developing countries around the world, technology is enabling opportunities to “leapfrog” existing
technology. Which of the following best describes this statement?
a. These countries are able to forgo current technological advances in order to wait for even better technology
to be developed.
b. More advanced technology is reaching these countries even though they lack technological infrastructures.
c. Technological advances are often offered at prices considerably lower than in well-developed countries.
d. The technology in developing countries is rapidly surpassing the technology in well-developed countries.
e. Advances in technology have made international marketing much easier in developing countries.
39. The unconscious reference to one’s own cultural values, experiences, and knowledge when encountering new and
different cultures is known as:
a. the “when-in-Rome” approach.
b. the Fraedrich Principle.
c. cultural relativism.
d. the ethnocentric reference.
e. the self-reference criterion.
Chapter 8 – Reaching Global Markets
40. _____ refers to the idea that morality varies from one culture to another and that business practices are therefore
differentially defined as right or wrong by particular cultures.
a. The self-reference criterion
b. Global ethics
c. Economic relativism
d. Cultural relativism
e. Moral relativism
41. Maquiladoras are:
a. exchange controls from central banks in Latin American countries.
b. production facilities set up in Mexico.
c. import-export agents of the Mexican government.
d. global marketing programs established in Latin American countries.
e. freight forwarders from Mexico.
Chapter 8 – Reaching Global Markets
42. The agreement between the United States, Canada, and Mexico that merges these three countries into one
marketplace is called _____.
a. EU
b. MERCOSUR
c. APEC
d. NAFTA
e. GATT
43. If Walmart plans to expand its stores to Canada and Mexico. This expansion would be facilitated by the _____.
a. European Union
b. North American Free Trade Agreement
c. Pacific Rim Unification Act
d. International Retail Alliance Association
e. Latin American Free Trade Association
Chapter 8 – Reaching Global Markets
44. One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder the international
trade activities of _____.
a. Canada
b. Japan
c. Brazil
d. Cuba
e. Panama
45. Which of the following is not true of NAFTA?
a. The NAFTA effectively merged Canada, Mexico, and the United States into one market.
b. The NAFTA restricts trade by requiring equal treatment of U.S. firms in Brazil and Canada.
c. It will provide additional opportunities for the United States in long-term affiliations with other countries in the
Western hemisphere.
d. It is controversial.
e. Many U.S. businesses who engage in outsourcing are looking toward Mexico as a less costly alternative than
China.
Chapter 8 – Reaching Global Markets
46. Which of the following is true about NAFTA?
a. The NAFTA effectively merged Canada, Brazil, and the United States into one market.
b. It will increase the total output of goods and services to foreign markets.
c. It will decrease the total number of jobs in the United States.
d. It eliminated virtually all tariffs on goods traded between the United States, Canada, and Mexico.
e. It will reduce the number of illegal aliens in the United States.
47. Another name for the European Union is _____.
a. the Common Market
b. the European Market
c. the Euro
d. NAFTA
e. AECO
Chapter 8 – Reaching Global Markets
48. The unification of Europe through the European Union (EU):
a. produced the largest single market in the world.
b. calls for greater customization of products and attention to regulations and restrictions of European countries.
c. means that members of the EU have become more heterogeneous in their needs and wants.
d. required the countries to be segmented into many different markets.
e. was established to promote trade among its members.
49. Which of the following is true about Europe?.
a. All European countries use a common currency, the euro, except for France, which uses its own currency.
b. All European countries use a common currency, the euro, except for England, which uses its own currency.
c. All European countries use a common currency, the dollar, except for Greece, which uses its own currency.
d. All European countries use a common currency, the euro, except for Germany, which uses its own currency.
e. All European countries use a common currency, the euro, except for Austria, which uses its own currency.
Chapter 8 – Reaching Global Markets
50. Johnston Chemicals’ president is very excited about the possibility of the firm’s British subsidiary having access to
customers in the entire EU. He realizes that it will be some time before this area truly becomes one market,
primarily because of differences in:
a. available advertising media.
b. cultural factors.
c. legal challenges.
d. technological advances.
e. economic environmental factors.
51. The trade alliance that includes Brazil, Argentina, Uruguay, and other countries is known as _____.
a. OPEC
b. APEC
c. MERCOSUR
d. NAFTA
e. the Common Market
Chapter 8 – Reaching Global Markets
52. Which of the following alliances/agreements is the United States not a part of?
a. NAFTA
b. APEC
c. GATT
d. WTO
e. MERCOSUR
53. The Common Market of the Southern Cone (MERCOSUR) includes:
a. countries from southern Africa.
b. both India and Indonesia.
c. Australia and New Zealand.
d. countries in South America.
e. southern China and India.
Chapter 8 – Reaching Global Markets
54. Which of the following trade alliances differs from others in its commitment to facilitating business and its practice
of allowing the private sector to participate in a wide range of activities?
a. NAFTA
b. EU
c. MERCOSUR
d. WTO
e. APEC
55. Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions, resolution of
international trade problems, and ground rules for international trade?
a. The World Trade Organization
b. The North American Free Trade Agreement
c. The Latin American Free Trade Agreement
d. The European Union Free Trade Agreement
e. The Association of Southeast Asian Nations
Chapter 8 – Reaching Global Markets
56. If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it would most
likely try to become a part of _____.
a. NAFTA
b. WTO
c. MERCOSUR
d. APEC
e. EU
57. The term dumping refers to the sale of:
a. products in foreign markets that cannot be sold in the United States.
b. products in foreign markets at prices above those charged in the United States.
c. all discontinued U.S. products in foreign countries.
d. products in foreign countries at unfairly low prices.
e. products in foreign markets that cannot pass safety standards in the United States.
Chapter 8 – Reaching Global Markets
58. If Hyundai, a Korean automobile manufacturing firm, started selling its cars at unfairly low prices to Germany,
Hyundai would be engaging in _____.
a. quota-enforcing
b. embargoing
c. shoveling
d. dumping
e. dipping
59. The World Trade Organization accomplishes all of the following except:
a. educating companies about international trade rules and regulations.
b. lending money to firms interested in developing international markets.
c. serving as a forum for trade negotiations.
d. helping settle international trade disputes.
e. providing legal ground rules for international commerce.
Chapter 8 – Reaching Global Markets
60. At the heart of the _____ are agreements that provide legal ground rules for international commerce and trade
policy.
a. United Nations
b. ASEAN
c. MERCOSUR
d. WTO
e. APEC
61. The purchase of products from a foreign source is called _____.
a. exporting
b. dumping
c. importing
d. licensing
e. venturing
Chapter 8 – Reaching Global Markets
62. When the American company Exxon purchases crude oil from Saudi Arabia, it is engaging in
a. licensing.
b. importing.
c. free trade.
d. exporting.
e. dumping.
63. Henderson Synthetics is a producer of chemical products aimed at increasing agricultural yield per acre. Henderson
Synthetics’managementbelievesthatseveralofthefirm’sproductscouldhavesizablemarketsinothercountries;
however,itiscostlytoobtainmarketresearchtoconfirmthis.IfHendersonSyntheticswantedtotemporarily“try
out”theseinternationalmarketswithaminimallevelofcommitmentandcost,itshoulduse_____.
a. contract manufacturing
b. export intermediaries
c. joint ventures
d. direct ownership
e. subsidiaries
Chapter 8 – Reaching Global Markets
64. The extent of Raytheon’s participation in global business is selling the batteries it manufactures to companies in
Spain. In this case, Raytheon is a(n) _____.
a. trading company
b. importer
c. exporter
d. franchiser
e. contract manufacturer
65. The Grummond Group buys air conditioner components in industrialized countries and sells them to business
customers in developing countries where the air conditioners are assembled. Grummond is most likely classified as
a(n) _____.
a. trading company
b. strategic alliance
c. joint venture
d. licensee
e. exporter
Chapter 8 – Reaching Global Markets
66. The role of export agents is to:
a. bring buyers and sellers from different countries together and collect a commission for arranging sales.
b. purchase products from different companies and sell them to foreign countries.
c. help a firm to make direct investments in foreign countries.
d. contact domestic firms about the opportunities available in exporting.
e. arrange for licensing agreements between domestic and foreign firms.
67. How does using an exporting intermediary limit the risk involved with global marketing?
a. Most exporting intermediaries assume all financial risks on behalf of their clients.
b. Exporting intermediaries are not subject to the same laws as companies, and therefore limit the legal risk
involved.
c. Using an exporting intermediary restricts a company to being involved with joint ventures and not direct
ownership.
d. Exporting intermediaries guarantee that the products a company is selling will be a good fit for the foreign
markets they are entering.
e. Using exporting intermediaries involves limited risk because the company has no direct investment in the
foreign country.
Chapter 8 – Reaching Global Markets
68. A company which is not involved in manufacturing but brings together buyers and sellers in different countries is
usually referred to as a _____.
a. franchise
b. contract manufacturer
c. strategic intermediary
d. trading company
e. licensee
69. A large farming cooperative that focuses on the production of fruits and vegetables uses a business that sells the
farmers’ products in foreign countries and also provides consulting, insurance, legal assistance, and warehousing to
the cooperative. This business would most likely be called a(n) _____.
a. trading company
b. export specialist
c. contract wholesaler
d. licensor
e. strategic partner
Chapter 8 – Reaching Global Markets
70. Questor Corporation owns the Spalding brand name but does not produce a single golf club or tennis ball. This
arrangement is an example of _____.
a. exporting
b. trading
c. joint venture
d. strategic alliance
e. licensing
71. If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the country, it might
provide a Malaysian operation with the knowledge to produce and market its products in exchange for a
commission. This type of arrangement is called _____.
a. licensing
b. exporting
c. a strategic alliance
d. a joint venture
e. contract manufacturing
Chapter 8 – Reaching Global Markets