GEB Chapter 3 quiz – Flashcards
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direct investment is the least risky and least expensive way to participate in foreign trade
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false
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a strategic alliance is a partnership formed to create competitive advantage on a worldwide basis
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true
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sociocultural differences, such as variations in spoken language and body language, usually have almost negligible impact on international business
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false
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the Web-Pomerene Export Trade Act allows selected U.S. firms to enter international trade to form monopolies to compete with foreign monopolistic organizations and also to operate as monopolies within the US
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false
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companies doing business internationally have traditionally used globalization strategy
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false
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the international monetary fund promotes trade among member nations by eliminating trade barriers and fostering financial cooperation
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true
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A common reason for establishing quotas or tariffs is to encourage dumping
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false
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international business involved the buying, selling, and trading of goods and services across national boundaries
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true
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MNCs are often criticized on the grounds that they adversely affect production in the host countries and also contribute to higher unemployment.
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false
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Companies doing business internationally have traditionally used a globalization strategy.
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false
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which of the following is an international trade alliance between 21 nations that promotes open trade and economic and technical cooperation among its member nations
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Asia-Pacific Economic Cooperation
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When a country devalues its currency, this causes:
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an increase in its exports
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_ is the transferring of manufacturing or other tasks - such as data processing - to countries where labor and supplies are less expensive
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outsourcing
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_ is a partnership formed to create competitive advantage on a worldwide basis
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a strategic alliance
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A(n) _ exists when a country is the most efficient producer of an item
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absolute advantage
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which of the following is true of an MNC
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it is the highest level of international business involvement
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Apple Inc., a leading manufacture of cell phones and tablets, hires Taiwan's Foxconn Technology Group, whose subsidiary assembles Apple devices in factories in China. Which of the follow refers to the business arrangement between Apple and Foxconn
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contract manufacturing
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Exporting may occur through _, which involve bartering products for other products rather than currency
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countertrade agreements
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suppose Coca-Cola allows a Mexican firm to use its name, formula, and brands in return for a royalty. This arrangement is known as
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licensing
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An intermediary who handles international transactions for other firms is acting as a(n)
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export agent
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on which of the following grounds are MNCs often criticized by anti-globalization activists
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they increase the gap between rich and poor nations
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when a firm's products are standardized in all countries
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advertising may still need modification
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which of the following is an example of foreign direct investment
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A Canadian firm purchasing a majority stake in a Japanese company
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Which of the following is an advantage of using an export agent
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the firm does not have to deal with the red tape of international business
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standardizing products for the whole world as if it were a single entity is a characteristic of the _
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global strategy
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The relocation of business processes by a company or subsidiary to another country is called ____.
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offshoring
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Which of the following is formally called the International Bank for Reconstruction and Development?
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World Bank
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Understanding that Arab businessmen tend to stand face to face when holding a conversation reveals the importance of understanding another culture's use of:
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body language
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Commercial Service is the global business solutions unit of the U.S. Department of ____.
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commerce
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A corporation that operates in several countries but without significant ties to any of them is an example of a(n):
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multinational
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Which of the following is an advantage of using an export agent?
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The firm does not have to deal with the red tape of international business.
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Which of the following is likely to be a reason for some U.S. companies to bring their outsourced production processes back to the United States?
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High cost of transporting products to the home country
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Which of the following is a measure that does not yield revenue for the government of the United States, but can effectively limit the quantity of a particular good being imported from Japan?
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quota
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An intermediary who handles international transactions for other firms is acting as a(n):
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export agent
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A U.S. company, 3M Inc., owns a film-manufacturing facility in Italy. This is an example of:
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a direct investment
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Lever Brothers changed the formula of its bar soap to match different countries' water conditions and washing habits. This is an example of:
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multinational strategy
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McDonald's had to adapt its menus to reflect local preferences in India because:
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it had to account for religious and dietary customs related to serving pork and beef.
