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Exam 3: Doing Business in Global Markets

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Question 161

True/False

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Offshore outsourcing is another term used to describe the act of U.S. firms selling their domestically manufactured goods to foreign customers.

A) True
B) False

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Question 162

Multiple Choice

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A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a:

A) licensor.
B) joint venture.
C) foreign subsidiary.
D) host company.

E) C) and D)
F) None of the above

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Question 163

Multiple Choice

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Why does it make sense to trade with other nations?

One advantage of free trade is:

Household Appliances, Inc., has a manufacturing plant near Chicago. The company specializes in compact washers and dryers for countries where consumers have less living space. Household Appliances participates in the global market through:

With respect to free trade, many U.S. citizens prefer "fair trade, not free trade."

Countertrading is a form of exchange where firms will put certain products "on the counter" offering them to foreign customers at a cheaper price than what they would offer them to domestic customers.

__________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries.

The All-Sports Gaming Company has avoided contract manufacturing abroad due to the significant start-up costs in buying land and setting up its own manufacturing plants.

As students think about a career in the business world today, which of the following is a good strategic suggestion?

Even though the U.S. exports a vast amount of goods globally, it exports a much lower percentage of its products than other countries do.

The two basic types of tariffs are:

Brett, a U.S. student, is preparing for a trip to Thailand in the near future. He read in The Wall Street Journal that the dollar has strength against the Thai baht. Which of the following would be an exchange that would indicate this currency situation?

Many U.S. companies fail to think globally.

Currency fluctuations can be an advantage to firms trading in the global market.

U.S. firms that produce sophisticated military hardware are prohibited from exporting that equipment to "unfriendly" governments, such as Iran. This complete ban on exporting sensitive technology to specific countries is an example of a(n) :

The United States is the largest exporter in the world.

When foreign firms build production facilities in the United States, they are engaging in:

Labor unions and businesses in the heavy equipment industry have asked the U.S. Congress to place a tax on imported equipment in order to make it more expensive. They hope that this will allow U.S. producers to be more competitive. The U.S. heavy equipment industry appears to be seeking a(n) :

A few years ago, a well-known celebrity who promoted a line of clothing was accused of supporting child labor in a Honduras manufacturing site where the clothes were made. Although the celebrity's image was tarnished, he immediately was able to close down the operation due to a violation of international law.