Donna Bader, Globalization opponent
Donna Bader spent her final year at college studying the effect of various economic
factors on the economy of developing nations. Based on the results of her study, she
concluded that globalization does these countries more harm than good.
A born global firm is a company that engages in international business from or near its
inception.
The World Trade Organization can punish a country in which a company accused of
dumping is based.
Purchasing power parity does not hold for single products, it is meaningful only when
applied to a basket of goods.
Outsourcing refers to the practice of buying from another company a good or a service
that is part of a company’s value-added activities.
A multinational strategy entails having a separate strategy for each nation in which a
company markets its products.
While assessing the market potential of emerging markets, market consumption
capacity is generally obtained through estimates of energy consumption.
It is the nature of arbitrage to even out excessive fluctuation by destroying its own
profitability.
Reverse culture shock is much milder than the initial culture shock an expatriate faces.
Scenario: Better Mousetrap Inc.
Better Mousetrap Inc. is a manufacturing company that sells pest control products.
Recently the company launched an innovative mousetrap with a unique design that has
been selling well in the U.S. market. Senior Vice President Marc Wallace, even
recommended expanding sales overseas in order to increase company revenues.
Trade deficit occurs when the value of a country’s imports is greater than the value of its
exports.
The closing of factories with unused capacity is an example of a stability strategy.
Expropriation involves the forced transfer of assets from a company to the government
without compensation.
The value of a currency expressed in dollars is called its par value.
The theories of comparative advantage and absolute advantage assume that countries
are driven only by the maximization of production and consumption.
The ________ played a major role in the development of capitalism and free enterprise
in nineteenth-century Europe.
A) pillars of Islam
B) Shinto doctrine
C) Protestant work ethic
D) tenets of Judaism
Which of the following statements is true of outsourcing?
A) It reduces economic risk by facilitating the purchase of large insurance policies.
B) It reduces production risk by eliminating delays in the timely receipt of needed parts.
C) It reduces political risk by enabling the company to avoid investing in plants and
equipment abroad.
D) It reduces currency risk by allowing the company to invest the home currency on
in-house production facilities.
Once an audience receives a message, they interpret the meaning of the message by
________ it.
A) preprocessing
B) decoding
C) parsing
D) compiling
Making investments in distribution in order to leapfrog channels of distribution that are
tightly controlled by competitors is an example of ________.
A) an internalization advantage
B) an ownership advantage
C) forward integration
D) backward integration
A fixed asset can also be referred to as a ________ asset.
A) liquid
B) current
C) tangible
D) trading account
The measures of a nation’s well-being other than the financial wealth accumulated
through exports are irrelevant according to ________.
A) mercantilism
B) absolute advantage theory
C) factor proportions theory
D) new trade theory
Scenario: Moonland Union
Twenty-six nations of Moonland region, have decided to cooperate with one another to
eliminate trade barriers among them and create the Moonland Union. They are not sure,
however, to what extent they want to cooperate.
As a first stage of cooperation, the countries agree to remove all barriers to trade among
themselves. Each country also maintains policies it sees fit against nonmembers. At this
stage, Moonland Union can be described as a ________.
A) free trade area
B) political union
C) common market
D) customs union
Which of the following is a promotional strategy designed to pressure channel members
to carry a product and promote it to final users?
A) differentiation strategy
B) retrenchment strategy
C) push strategy
D) pull strategy
If Trader’s Paradise purchases euros expecting the value to rise and generate a profit for
the company, it is engaging in currency ________.
A) swap
B) speculation
C) hedging
D) arbitrage
If money were free from all controls when transferred internationally, the real rate of
interest would ________.
A) be the same in all countries
B) be the same as the inflation rate
C) create arbitrage opportunities across countries
D) create arbitrage opportunities in developed countries
Research in which people record information in personal diaries on their attitudes,
behaviors, or purchasing habits is called a ________.
A) survey
B) focus group
C) consumer panel
D) literature review
The Free Trade Area of the Americas (FTAA) is a trade agreement ________.
A) between Mexico, Canada, and the U.S.
B) among the South American nations
C) that has been proposed to create the largest free trade area on the planet
D) that includes the United States and the European Union
Describe the structure of the European Union.
Discuss the steps companies should take to avoid export and import blunders. How can
an advance payment method help exporters reduce financial risk?
Explain the concept of devaluation, and explain the effect devaluation has on the price
of a country’s imports. Discuss how international companies can adjust to a weak
currency.
Does greater economic freedom guarantee a higher standard of living? Provide
examples of two specific countries to support your answer.
Discuss why a host country might promote or restrict foreign direct investment.