The lowering of taxes in the U.S. by its government is an example of the ________.
A) fiscal policy
B) monetary policy
C) social policy
D) foreign affairs policy
A ________ is a separate company created and owned by two or more independent
entities to achieve a common business objective.
A) wholly owned subsidiary
B) joint venture
C) strategic alliance
D) turnkey project
Export/import financing in which an exporter ships merchandise and later bills the
importer for its value is called ________.
A) advance payment
B) open account
C) a letter of credit
D) documentary collection
Which of the following financing methods entails the greatest risk for exporters?
A) supersedeas bond
B) advance payment
C) letter of credit
D) open account
Scenario: Frankfurter Friday
Betty Cleveland is the vice president of Frankfurter Friday, a highly successful hot dog
joint in Oceania. Her company decides to expand to Asia and identifies China as the
ideal market. Before she leaves for China, she studies their culture extensively and
discovers that the number four is considered extremely unlucky, that not everybody is
fluent in China’s official language-Mandarin-and that punctuality is a highly valued trait
in the country.
________ facilitate(s) the process of cultural imperialism.
A) Strict product liability laws
B) Relaxed trade and investment barriers
C) Technological stagnation
D) Social media censorship
Countries often use local content regulations to determine the proportion of the product
that must be made in the local market versus made outside of the local market in order
to ________.
A) maximize product safety
B) ensure a cultural fit
C) favor domestic companies
D) relieve production pressures on local companies
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options. In foreign direct investment,
complete ownership of a company guarantees its complete control.
Scenario: Topsy Turvey Toys and Ureshi Toys
Topsy Turvey Toys is a U.S.-based toy retailer that buys all its merchandise from Ureshi
Toys, a Japan-based toy manufacturer with production facilities in twelve nations.
Ureshi Toys markets its toys globally without modification.
Ureshi Toys is an example of a(n) ________.
A) domestic company
B) multinational company
C) direct importer
D) shell corporation
The approach recommended by Valerie is called ________.
A) polycentric staffing
B) ethnocentric staffing
C) vertical integration
D) horizontal integration
Which of the following is a result of trade creation?
A) The demand for goods tends to increase.
B) Purchasing power of consumers decreases.
C) Consumers have a limited choice for selection of goods.
D) Imported goods are seldom available at lower prices.
The least amount of sovereignty that must be surrendered to a trading bloc occurs in a
________.
A) economic union
B) common market
C) free trade area
D) political union