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Exam 3: Doing Business in Global Markets

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Question 21

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First Engineering,a large U.S.based mechanical engineering firm,is considering entering the global market.Upon careful analysis of the global market,they will find that global trade:

A) Opportunities are diminishing.
B) Is dominated by emerging,developing countries.
C) Is big business today and is expected to be more important in the future.
D) Is likely to be severely restricted in the future by nontariff trade barriers.

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

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Question 22

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Explain and provide at least one example of how legal and regulatory forces impede global trade.

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In global markets,there is no central sy...

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Question 23

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Contract manufacturing requires heavy start-up costs by the domestic company.

A __________ represents a long-term partnership between two or more companies established to help each firm build competitive market advantages,without sharing the cost of risk.

The balance of payments measures the inflows and outflows of money from tourism,foreign aid,military expenditures and foreign investments as well as flows resulting from exports and imports.

Competition in exporting is very intense.

An example of foreign direct investment would be Pepsi granting a Japanese firm the use of its formula and trademark,for a fee.

_____________ is buying products from another country.

U.S.recording studios are feeling the pinch in profits due to the fact that artists' music is copied and sold overseas within 24 hours of the music selling in the U.S.market.As a student who is now aware of the challenges businesses face in global trade,which of the following statements is an accurate representation of this situation?

Under a system of floating exchange rates,the value of a country's currency is determined by government regulation.

After finishing college,Nathan joined his uncle's company in Miami,FL,a(n) _______ of bauxite,copper,and other minerals from the Chile.Everyday,he brokers trades with mines in Chile to buy and transport these minerals into the U.S.

A United States firm recently won a large contract with a company in Bangladesh by providing government officials and company officials with American cars and promises to provide monetary gifts in exchange for the business.Fortunately,U.S.Law,under the Foreign Corrupt Practices Act permits U.S.companies to operate in this manner.

Mini-Case Since he was five years old,Rhett Tenna struggled with poor eyesight.He suffered through all the names that went along with wearing eyeglasses for most of his young life.Rhett eventually switched from traditional eyeglasses to contact lens,but he always wondered why glasses were considered to be "ugly" and not fashionable.After graduation from college,Rhett set out on a lifelong goal: to make eye wear synonymous with high fashion.He opened a specialty store called "The Eyes Have It." His marketing plan was to remove the social stigma of wearing glasses,and replace it with a sense of flair and high fashion.From the day he opened his first store,Rhett's plan met with resounding success.Today,"The Eyes Have It" has grown from that single outlet to a medium-sized company with dozens of stores located in six states,and a manufacturing plant that turns out designer frames. A recent internal audit,however,suggested a problem that Rhett had not anticipated.The study indicated that the U.S.market is just about saturated and growth of "The Eyes Have It" stores will be very limited.The audit concerned Rhett until he recognized an untapped market existed overseas.If people all over the world have the same problem,the global market opportunities are fantastic! All in favor of going global say: "The Eyes Have It"! -Next year,in order to cut both time and cost in getting new styles to global markets,Rhett plans to _________________ a few lines.Rhett will send his designs to manufacturers in Saipan,Bangladesh,and Turkey who will produce the eyeglasses in facilities in their respective countries.This will not only reduce the cost of labor,it will help Rhett reach regional markets in a timely manner.

Technological differences can prevent some companies from doing business abroad.

As the most powerful economy in the world,the United States does not need to concern itself with having an unfavorable balance of payments.

Compared to many other industrialized countries,the United States has historically exported a much higher percentage of its products than other countries do.

Which of the following is an advantage of offshore outsourcing?

As a market for U.S.exports,China represents the only major business opportunity on the continent of Asia.

The __________ represents the first attempt to establish a truly global mediation center to resolve international trade disputes.

From a sociocultural perspective,U.S.business people are often accused of ethnocentricity.