MCQs By Daniel

6 Chapter QuizThis activity contains 28 questions. Use the following Study Question to answer Question 1: STUDY QUESTION 1: Why is the understanding of international trade theory useful to managers in international business? An understanding of trade theory helps managers understand _____. customers' attitudes toward foreigners where products may be produced more efficiently the relative ease of transferring managers abroad whether barter is preferable to cash transactions Use the following Study Question to answer Question 2: STUDY QUESTION 3: Explain absolute advantage and the determinants of it. Which of the following would be an example of a natural advantage rather than an acquired advantage for South Africa in world trade? its multicultural and multi-ethnic society its termination of racially mandated discrimination its abundant wildlife its fairly skilled labor force Use the following Study Question to answer Question 3: STUDY QUESTION 5: What assumptions underlie the theories of specialization in international trade? What are the limitations of these assumptions? Which of the following is assumed by the theories of country specialization? Output will increase through specialization. Factors of production will move to the countries offering them higher returns. Countries should exchange products with natural advantages for products with acquired advantages. Unemployment resulting from free trade will disappear as more people work in transporting goods longer distances. Use the following Study Question to answer Question 4: STUDY QUESTION 7: Explain the logic of the factor proportions theory and the complexities in applying it. Assume that country A has a population density of 400 people per square mile and its neighbor, country B, has a density of 50 people per square mile. Which of the following would likely happen according to the factor proportions theory? A will send capital intensive goods to B in exchange for natural resources. A will send land intensive goods to B in exchange for labor intensive goods. A will send goods to B for which it has an acquired advantage in exchange for goods for which B has a natural advantage. A will send labor intensive goods to B in exchange for land intensive goods. Use the following Study Question to answer Question 5: STUDY QUESTION 8: Why do most world trades occur among countries with similar characteristics? Why do high income countries primarily trade with each other? High income countries have most of the world's natural resources. High income countries have most of the world's population. High income countries produce and consume more. High income countries subsidize their agricultural production. Use the following Study Question to answer Question 6: STUDY QUESTION 9: How and why does production of many products shift from one country to another as they go through their life cycles (product life cycle theory of trade and investment)? Which of the following best explains why high income countries have an advantage in the production and sale of products in their introduction stage? They can produce on a large scale. Their capital intensive production methods save costs at this stage. They have fewer environmental restrictions. They have a near-monopoly position at this point. Use the following Study Question to answer Question 7: STUDY QUESTION 11: What is a strategic trade policy and its limitations? Which of the following is a possible limitation to the success of a strategic trade policy? Governments find difficulty in identifying and targeting the right industries. In time of national emergency, almost any industry may be considered strategic. While such policies are feasible for high income countries, low income countries lack sufficient entrepreneurs to implement the policies. Such policies are opposed by workers because they increase income inequality between managers and workers. Use the following Study Question to answer Question 8: STUDY QUESTION 12: What are the four conditions in the Porter Diamond? What are the uses and limitations of the Porter Diamond? A use of the Porter Diamond is to _____. add diamonds in addition to gold as part of nation's holdings of reserves helps predict how the location of products' production will move from the original home country to other countries and then, if successful, back home again identify and develop the right conditions to help countries become competitive for specific products protect against trademark infringement Use the following Study Question to answer Question 9: STUDY QUESTION 13: Why do production factors move from one country to another? Although countries lose potentially productive resources when educated people leave, they gain by _____. the influx of approximately the same number of people from abroad having more income per capita for their remaining population receipt of remittances from the people working abroad receipt of foreign aid to compensate for the loss Use the following Study Question to answer Question 10: STUDY QUESTION 15: Explain the relationship between international trade and factor mobility from the standpoint of cost reduction. From a global standpoint, the lowest production costs occur when _____. True False Use the following Study Question to answer Question 13: STUDY QUESTION 5: What assumptions underlie the theories of specialization in international trade? What are the limitations of these assumptions? The theories of specialization in international trade assume that countries have economic efficiency objectives. Comparative advantage differs from absolute advantage in that it considers countries' acquired advantages in addition to their natural advantages as bases of trade. True False Use the following Study Question to answer Question 14: . True False Use the following Study Question to answer Question 12: STUDY QUESTION 4: Explain comparative advantage and how it differs from absolute advantage. trade is mobile internationally and factors of production are not both trade and factor of production are mobile internationally factors of production are mobile internationally and trade is not neither factors of production nor trade are mobile internationally Use the following Study Question to answer Question 11: STUDY QUESTION 2: What are mercantilism and neomercantilism and the arguments for against them? Neomercantilism is a modern belief that countries should amass holdings of gold as reserves. True False Use the following Study Question to answer Question 17: STUDY QUESTION 10: What are the tests and limitations of the product life cycle (PLC) theory of trade and investment? Products with extremely short product life cycles are more apt to adhere to the product life cycle theory of trade and investment than products with long life cycles.STUDY QUESTION 6: Why are large countries usually less dependent on international trade than small countries are? Large countries usually depend more on imports as a percentage of consumption and exports as a percentage of production than small countries. True False Use the following Study Question to answer Question 15: STUDY QUESTION 8: Why does most world trade occur among countries with similar characteristics? A reason that high income countries trade so much with each other is that their companies specialize by apportioning their reach efforts more to some sectors than to others. True False Use the following Study Question to answer Question 16: STUDY QUESTION 9: How and why does production of many products shift from one country to another as they go through their life cycles (product life cycle theory of trade and investment)? According to the product life cycle (PLC) theory of trade. True False . the output from foreign production in the growth stage is sold primarily in the countries where the production takes place. and at the end. rather than government policy makers. True False Use the following Study Question to answer Question 19: STUDY QUESTION 12: What are the four conditions in the Porter Diamond? What are the uses and limitations of the Porter Diamond? The Porter Diamond is a theory holding that domestic conditions need to be favorable to develop globally competitive companies therein. True False What do mercantilism and neomercantilism have in common? To create paragraphs in your essay response. . True False Use the following Study Question to answer Question 20: STUDY QUESTION 14: What are the effects of international factor mobility on origin and destination countries? The foreign-born percentage of the population is significant (over 20 percent) in some countries but insignificant (less than 2 percent) in others. should decide a country's future industrial emphasis. type at the beginning of the paragraph.Use the following Study Question to answer Question 18: STUDY QUESTION 11: What is a strategic trade policy and its limitations? A strategic trade policy holds that entrepreneurs. and at the end. What is country-similarity theory? To create paragraphs in your essay response.What are the major differences between the theories of absolute advantage and comparative advantage? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. . type at the beginning of the paragraph. and at the end. What are the conditions listed as important for competitive superiority in the Porter diamond? To create paragraphs in your essay response. What do you learn from this? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. and at the end. .Does the international PLC theory still seem valid? To create paragraphs in your essay response. Based on your experience. do you think the US or your region has absolute or comparative advantage? Take an inventory of the items in your house or apartment and determine their origin. type at the beginning of the paragraph. type at the beginning of the paragraph. To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. and at the end. To create paragraphs in your essay response.Some countries have supported import substitution policies. type at the beginning of the paragraph. Would your state be able to provide all your needs? Check how many staples your state brings in for your everyday needs. . aiming at a kind of autarky feeling they would stimulate their economies if they produced everything themselves. Does your state have a policy to develop foreign exports for its firms? Check out your local government sites to see what actions and agencies they provide. It helps in determining the least cost production location. Use the following Study Question to answer Question 2: STUDY QUESTION 3: Explain the argument for using protectionism to reduce unemployment. Why might the . Governmental corruption raises the cost of operating. and why is an understanding of it useful for managers? Why is an understanding of trade protectionism useful for managers? It helps for determining whether to collude with competitors. Governmental measures may limit your ability to sell abroad. Use the following Study Question to answer Question 1: STUDY QUESTION 1: What is trade protectionism.7 Chapter Quiz This activity contains 28 questions. Other industries may become uncompetitive because of having to use higher priced domestic inputs. Excess demand in one country raises world prices that adversely affect consumers in countries where demand is lower. while increasing output in the manufacturing sector high income countries will lower their import barriers more readily for manufactured than for agricultural products technological developments. the decrease in agricultural employment will have minimal effect on agricultural production. By running a favorable balance of trade. a country hurts employees and consumers in a country with a trade deficit. Use the following Study Question to answer Question 3: STUDY QUESTION 5: Why do developing countries sometimes impose import restrictions to increase their levels of industrialization? What problems might result from these restrictions? An argument for developing countries' use of import restrictions to promote industrialization is premised on the belief that _____. . will cause developing countries to become non-competitive in agricultural production more industrial jobs will reverse the adverse effects of the brain drain Use the following Study Question to answer Question 4: STUDY QUESTION 7: Explain why and how governments impose trade restrictions to improve their relative trade positions. such as both exporting and importing automobiles.protectionism not fully work as planned? Assume a country imposes import restrictions to reduce its unemployment. Domestic producers may be disadvantaged in cost of production if their access to foreign markets is less than foreign producers' access to their market. Which of the following may prevent employment from increasing? Imports will simply increase from another country. which is not affected by the restrictions. such as in gene splicing. Workers prefer to use unemployment benefits rather than go back to work. What is the economic rationale for the comparable access argument in world trade? Consumers are better off if their countries' export and import the same category of products. Experience shows that exporters usually lower their prices to maintain market share. why might a country impose import restrictions? to raise prices within "unfriendly" countries to lower prices for domestic consumers to foster competition among supplying countries to prevent dumping that puts domestic producers out of business Use the following Study Question to answer Question 7: STUDY QUESTION 11: Define and explain the different types of tariffs (duties). The United States charges a 5 percent tax on Mexican made shirts passing through to Canada.Use the following Study Question to answer Question 5: STUDY QUESTION 8: Why might governments enact export restrictions? What are the possible negative consequences of these restrictions? A reason for export restrictions is to _____. The United States foregoes charging its customary 10 percent tax on foreign made shirts for shirts made in Canada because of the free trade agreement between the two countries. whether destined to the United States or to Canada. Use the following Study Question to answer Question 8: STUDY QUESTION 12: Define and explain the non-tariff barriers that directly affect prices to limit trade. From the standpoint of trying to control price. lower prices in foreign markets lower prices in domestic markets promote added foreign production promote more domestic production Use the following Study Question to answer Question 6: STUDY QUESTION 9: Explain the price control objectives from import restrictions. Mexico charges a 5 percent tax on shirts leaving Mexico. Which of the following makes customs valuation difficult? . Which of the following is an example of an import tariff? Canada charges a 10 percent tax on shirts made in the United States. ad valorem duties have to be adjusted downward. Use the following Study Question to answer Question 9: STUDY QUESTION 13: List and explain the nontariff barriers that limit the quantity of goods traded. Which of the following is a means to help it achieve this protection? move into more profitable niches ally with other companies in their industry buy more components from foreign countries divert more sales to export markets Use the following Study Question to answer Question 11: STUDY QUESTION 2: What are the conflicting results of trade policies? Consumers typically withhold the purchase of foreign made products that threaten the continued employment of domestic workers. what alternatives might it follow? Assume a company wants to receive protection from import competition. Administrative delays in moving goods internationally are considered trade barriers because _____.There is disagreement on what is a subsidy. True False . When there are compound duties. There may be difficulty in determining under which product classification the tariff should be assessed. they may cause goods to be cleared at night when customs passes on over-time charges to the traders donors of foreign aid insist on the aid being spent in their own countries they create uncertainty and raise the cost of carrying inventory many services are handled as national monopolies Use the following Study Question to answer Question 10: STUDY QUESTION 15: When a company faces import competition that threatens its market position. It is sometimes hard to distinguish between foreign aid and foreign loans. True False Use the following Study Question to answer Question 13: STUDY QUESTION 5: Why do developing countries sometimes impose import restrictions to increase their levels of industrialization? What problems might result from these restrictions? Support for using import controls to spur industrialization in developing countries is partially based on the historical deterioration of the terms of trade for raw materials and agricultural products. True False Use the following Study Question to answer Question 15: STUDY QUESTION 8: Why might governments enact export restrictions? What are the possible negative consequences of True these restrictions? Export restrictions to lower domestic prices may influence False .Use the following Study Question to answer Question 12: STUDY QUESTION 4: Explain the rationale for and problems of making the infant industry argument work as intended. Recently. most developing countries have shifted interest in favor of import substitution as opposed to export-led development policies. True False Use the following Study Question to answer Question 14: STUDY QUESTION 6: Compare import substitution policies with export-led development policies. The infant industry argument for protectionism assumes that increased worker efficiency will compensate for poor economies of scale in production. True False Use the following Study Question to answer Question 19: STUDY QUESTION 12: Define and explain the non-tariff barriers that directly affect prices to limit trade. True False Use the following Study Question to answer Question 17: STUDY QUESTION 10: What are the noneconomic rationales for governmental intervention in the free movement of trade? What problems exist in using protectionism to achieve the noneconomic objectives? Proponents of trade sanctions argue that they should be imposed on countries following unacceptable practices even if the sanctions don't cause those practices to change. The term effective tariff refers to a tariff that achieves its objective. True There is general agreement on what constitutes a subsidy in False international trade. The optimum-tariff theory holds that an import tariff causes foreign producers to lower their prices. True False Use the following Study Question to answer Question 18: STUDY QUESTION 11: Define and explain the different types of tariffs (duties).Use the following Study Question to answer Question 16: STUDY QUESTION 9: Explain the price control objectives from import restrictions. . what are the main economic rationales for government intervention in trade? To create paragraphs in your essay response. . and at the end.Use the following Study Question to answer Question 20: STUDY QUESTION 14: What are the main arguments for limiting trade in services? Differences among countries in licensing standards for professions inhibit international trade in services. True False According to your text. According to your text. what are the main economic rationales for government intervention in trade? To create paragraphs in your essay response. type at the beginning of the paragraph. type at the beginning of the paragraph. and at the end. type at the beginning of the paragraph. type at the beginning of the paragraph. and at the end. One of the most used methods of trade control is quantity controls.What are the major instruments of trade control used by governments? To create paragraphs in your essay response. and at the end. . What advice is given to companies who are facing import competition? To create paragraphs in your essay response. What forms can they take? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. and at the end. . Make a list of imports you think the US would try to restrict and check it through research. and at the end. To create paragraphs in your essay response. type at the beginning of the paragraph.Can you find examples of where government intervention by other countries hindered the import of US goods? Seek examples on the Internet under the search expressions 'boycott' or 'restrictions on US imports'. To create paragraphs in your essay response. type at the beginning of the paragraph. Protection of infant industry has often been a rationale for government control. 8 Chapter Quiz This activity contains 28 questions. do you know of any infant industries that need possible government protection in order to survive? To create paragraphs in your essay response. . type at the beginning of the paragraph. and at the end. Use the following Study Question to answer Question 1: STUDY QUESTION 1: What are three ways to approach economic integration? How do they differ? A good example of regional economic integration is: the European Union. In your region. a bilateral trade agreement involving countries from two different regions. GATT. whereas the WTO involves trade in services. Use the following Study Question to answer Question 3: STUDY QUESTION 4: Why is geographic proximity an important reason for economic integration? The U. a customs union. they tried to form a regional group with the European Union but were not allowed to join due to differences in legal systems. . GATT involves trade in goods. a foreign trade zone. whereas the WTO includes developing countries as well. their tastes and preferences are more similar to each other than they are to any other countries in the world. whereas GATT encouraged their use.. any trade group that involves no more than two countries from the same region. and Mexico formed a regional trade group. because: the long distances between the countries made it more likely they would trade with each other. a common area. A major difference between the WTO and GATT is that: the WTO has a more effective enforcement mechanism than did GATT. the WTO is trying to eliminate non-tariff barriers.S. Use the following Study Question to answer Question 4: STUDY QUESTION 5: What are the types of economic integration and the differences among these types? A regional economic group that has the same external tariff levied on goods that are imported from non-member countries is an example of: a free trade agreement. GATT only involved the industrial countries.the World Trade Organization. Canada. neighboring countries are more willing to coordinate their economic policies. Use the following Study Question to answer Question 2: STUDY QUESTION 3: Compare and contrast the WTO and its predecessor. S. However. and Mexico due to the passage of NAFTA now makes it cheaper to buy the same goods from Mexican suppliers. This is an example of: trade creation. resources are shifted from inefficient to efficient companies as trade barriers fall. the reduction in tariffs between the U. dollar since it represents more countries is now the most widely traded currency in the world a major barrier to trade inside of Europe since its value differs from country to country . Under what conditions may they develop? An example of a static effect of regional economic integration is where: an overall growth in the market results from expanding production and economies of scale.Use the following Study Question to answer Question 5: STUDY QUESTION 6: Explain the static effects of regional economic integration.S. the common currency of the European Union always stronger than the U.S. a customs union. trade diversion. Use the following Study Question to answer Question 6: STUDY QUESTION 7: What is the difference between trade creation and trade diversion resulting from regional economic integration? Assume that a U. Use the following Study Question to answer Question 7: STUDY QUESTION 9: What is the euro and the rationale for it? The euro is _________ . market size falls due to rising competition. economies of scale. company used to import cheap products from Thailand. resources are shifted from efficient to inefficient companies due to rising tariffs. Use the following Study Question to answer Question 9: STUDY QUESTION 14: How has NAFTA impacted trade and employment? As a result of the NAFTA agreement. has almost disappeared. True False .S. Use the following Study Question to answer Question 10: STUDY QUESTION 16: What are two basic types of commodity agreements? How do they differ? A producer's alliance (commodity agreement): is best illustrated by OPEC. is a good example of trade creation but not trade diversion. Use the following Study Question to answer Question 11: STUDY QUESTION 1: What are three ways to approach economic integration? How do they differ? The European Union is an example of bilateral integration. illegal immigration between Mexico and the U. resulted in raising internal tariffs while lowering external tariffs. dollar. to use quotas or buffer stock systems to control inventory. involves exporting countries but not importing countries. has a common currency modeled after the U.S. trade and investment among the three member countries has increased dramatically. the European Union has become a major partner of NAFTA. involves producing countries but not exporting countries.Use the following Study Question to answer Question 8: STUDY QUESTION 12: What was the rationale for NAFTA? The North American Free Trade Agreement: is not a customs union at this point. extending the benefit of NAFTA to the other side of the Atlantic. __________ trade and investment among the three member countries has dropped due to political differences. is not permitted by the U.N. True False Use the following Study Question to answer Question 14: STUDY QUESTION 4: Why is geographic proximity an important reason for economic integration? Geographic proximity is not an important issue in establishing regional trading groups since air travel is so much faster than it used to be. regional trading groups can influence where companies trade and invest. True False . True False Use the following Study Question to answer Question 13: STUDY QUESTION 3: Compare and contrast the WTO and its predecessor. Under what conditions may they develop? The increase in market size that results from regional integration is an example of a dynamic effect of integration. but generally does not extend tariff-cutting provisions to all member countries. Normal trade relations is a WTO mechanism that permits countries to reduce tariffs in normal situations.Use the following Study Question to answer Question 12: STUDY QUESTION 2: Why are regional trade groups important for MNEs' strategies? Due to tariff reduction policies. GATT. True False Use the following Study Question to answer Question 15: STUDY QUESTION 6: Explain the static effects of regional economic integration. European Parliament. True False Use the following Study Question to answer Question 17: STUDY QUESTION 8: What are the functions of the European Commission. thus resulting in an increase in trade. European Council. and European Court of Justice? The European Commission is the EU's major decision-making body and is composed of the different ministers of the member countries.Use the following Study Question to answer Question 16: STUDY QUESTION 7: What is the difference between trade creation and trade diversion resulting from regional economic integration? Trade creation occurs when countries reduce tariffs and production shifts from protected to more efficient industries. True False Use the following Study Question to answer Question 18: STUDY QUESTION 12: What was the rationale for NAFTA? NAFTA is an example of a customs union. True False Use the following Study Question to answer Question 19: STUDY QUESTION 13: What are the rules of origin and local content provisions of NAFTA? Rules of origin in NAFTA require that goods have at least 20 regional content in order to be eligible for the tariff-reduction provisions of NAFTA. True False . . type at the beginning of the paragraph.Use the following Study Question to answer Question 20: STUDY QUESTION 14: How has NAFTA impacted trade and employment? Trade and investment in NAFTA have increased dramatically since the agreement was signed. and at the end. What have been the major differences between the GATT and WTO? To create paragraphs in your essay response. type at the beginning of the paragraph. True False What have been the objectives of the GAAT and WTO since WWII? To create paragraphs in your essay response. and at the end. what are the implications of the EU for corporate strategy? To create paragraphs in your essay response. type at the beginning of the paragraph. What are the implications of NAFTA for corporate strategy? To create paragraphs in your essay response. and at the end. . type at the beginning of the paragraph. and at the end. type at the beginning of the paragraph.What are the major characteristics of the regional economic integration that has taken place? To create paragraphs in your essay response. According to your text. and at the end. and at the end. type at the beginning of the paragraph. and at the end. Farm subsidies have been a thorny subject of discussion for the GAAT and WTO for decades. Then see if they have an idea of what countries are members. To create paragraphs in your essay response. Is your region or state a major agricultural supplier? What are its major farm products? Does it have a lobbying organization? What are the opinions they have expressed on subsidies either granted to local producers or to producers in other parts of the world? To create paragraphs in your essay response. See if your region has a position on these by researching on the Internet. . type at the beginning of the paragraph.You are studying international business and are increasingly aware of the regional trade integration organizations. How many of your classmates are? Take a poll and see how many of them are aware of one for each area of the world. You probably have classmates from different areas of the world. Interview them on the subject of subsidies and tariff barriers to get an 'outsider's' opinion. type at the beginning of the paragraph. and at the end. . To create paragraphs in your essay response. what do you call the price of the currency? The exchange rate. forward transactions.9 Chapter Quiz This activity contains 28 questions. Use the following Study Question to answer Question 2: STUDY QUESTION 2: Explain the differences among spot transactions. the spot market the forward market If you expect to receive payment from a foreign buyer in a foreign future spot in 90 days. The currency tariff. which foreign exchange market do the currency market you enter into now to make sure you can convert the future the currency amounts foreign spot forward market into your currency at a fixed exchange rate? . Use the following Study Question to answer Question 1: STUDY QUESTION 1: What are foreign exchange and the exchange rate? If you are traveling abroad and want to exchange one currency into another. and futures contracts. The arbitrage rate. The free market rate. S. offer. dollar Use the following Study Question to answer Question 4: STUDY QUESTION 4: What are the four biggest markets (locations) for foreign exchange trades? The biggest market in foreign exchange is found in which of the following cities. Special Drawing Right Chinese yuan market basket consisting of the euro and the British pound U. the bid rate is: the rate at which the trader buys foreign exchange. England New York City. In foreign exchange transactions. Shanghai. dollars so widely traded? The major currency in the world that is considered an intervention currency employed by monetary authorities in market operations to influence their own exchange rates is the ________________. the difference between the rate at which the foreign exchange trader buys and sells foreign currency.S. Use the following Study Question to answer Question 6: STUDY QUESTION 6: What is meant by a discount or premium between the spot and forward exchange rates? . China Frankfurt. and spread. USA Use the following Study Question to answer Question 5: STUDY QUESTION 5: Define a foreign exchange bid. typically higher for exotic currencies. the rate at which the buyer buys foreign exchange.Use the following Study Question to answer Question 3: STUDY QUESTION 3: For what reasons are U. Germany London. British pounds are trading ________ at a discount in the forward market. at a discount in the spot market.The British pound/U. Use the following Study Question to answer Question 7: STUDY QUESTION 7: What is a foreign exchange option? Assume that you expect to receive a dividend in foreign currency in 30 days. In order to protect yourself against a possible foreign exchange loss.7205 in the spot market and $1. at a negative spread. spread contract. In this case. futures contract. at a premium in the forward market. dollar exchange rate is $1.S. hard currency forward currency soft currency Asian currency Use the following Study Question to answer Question 9: STUDY QUESTION 9: What is a multiple exchange rate system? The government typically determines different exchange rates to attach to specific transactions in which exchange rate system? . This type of contract is known as a(n) _________ option. and you retain the right but not the obligation to trade the currency.7223 six months forward. Use the following Study Question to answer Question 8: STUDY QUESTION 8: What is the difference between hard and soft currencies? A currency that is not always freely convertible into other currencies is known as a ____________ . you enter into a contract with a foreign exchange trader to sell foreign exchange for your currency. forward contract. forward transactions. Use the following Study Question to answer Question 10: STUDY QUESTION 12: What institutions do companies use for exchange currencies? Most foreign exchange trades take place in which market? Asia the OTC market the futures market the options market Use the following Study Question to answer Question 11: STUDY QUESTION 1: What are foreign exchange and the exchange rate? The exchange rate is the number of units of one currency to buy a unit of another currency. True False Use the following Study Question to answer Question 12: STUDY QUESTION 2: Explain the differences between spot transactions. A spot/forward system. and futures contracts. A futures contract is between a client and its bank for future delivery of currency. A hard but not soft currency system. True False Use the following Study Question to answer Question 13: STUDY QUESTION 3: For what reasons are U. dollars so widely traded? .A free-floating system.S. A multiple exchange rate system. has the largest economy in the world and its currency is the most widely traded currency in the world. it is selling at a discount in the forward market. offer. True False Use the following Study Question to answer Question 16: STUDY QUESTION 6: What is meant by a discount or premium between the spot and forward exchange rates? If a foreign currency is expected to strengthen in the future against another currency. True False Use the following Study Question to answer Question 14: STUDY QUESTION 4: What are the four biggest markets for foreign exchange trades? Since the U. it is now the most widely traded currency in the world. True False Use the following Study Question to answer Question 15: STUDY QUESTION 5: Define a foreign exchange bid. New York is the largest market for foreign exchange. True False Use the following Study Question to answer Question 17: STUDY QUESTION 7: What is a foreign exchange option? . and spread. The difference between the bid and offer rate in foreign exchange is known as the spread.S.Since the euro has combined all of the currencies in Europe together into one currency. A foreign exchange option is the right but not the obligation to trade currency in the future. True False Use the following Study Question to answer Question 18: STUDY QUESTION 8: What is the difference between hard and soft currencies? A hard currency is typically freely convertible. True False Use the following Study Question to answer Question 19: STUDY QUESTION 9: What is meant by a multiple exchange rate system? In a multiple exchange rate system, market forces assign different exchange rates to different types of transactions. True False Use the following Study Question to answer Question 20: STUDY QUESTION 12: What institutions do companies use for exchanging currencies? Commercial banks are the only financial institutions that deal in foreign exchange. True False What are the two major segments of the foreign exchange market and what are their differences? To create paragraphs in your essay response, type at the beginning of the paragraph, and at the end. What are the major foreign-exchange instruments? To create paragraphs in your essay response, type at the beginning of the paragraph, and at the end. What is the difference between a forward contract and a future? To create paragraphs in your essay response, type at the beginning of the paragraph, and at the end. What are the major ways firms use foreign exchange? To create paragraphs in your essay response, type at the beginning of the paragraph, and at the end. What are the different kinds of bonds used on the international bond market? To create paragraphs in your essay response, type at the beginning of the paragraph, and at the end. Have you every bought foreign currency for a trip? Was there a bid and offer price used in your transaction? Was the quote made in American terms? To create paragraphs in your essay response, type at the beginning of the paragraph, and at the end. type at the beginning of the paragraph. and at the end. . To create paragraphs in your essay response. To create paragraphs in your essay response. type at the beginning of the paragraph.Have you ever engaged in a forward contract yourself? Try to imagine something you did that resembles a forward contract. and at the end. Use the following Study Question to answer Question 4: STUDY QUESTION 5: What is the role of central banks? How do they carry out this role? .10 Chapter Quiz This activity contains 28 questions. help reduce tariffs worldwide provide funding for infrastructure development projects ensure that all exchange rates are rising in value promote exchange rate stability Use the following Study Question to answer Question 2: STUDY QUESTION 3: List and define the categories of exchange rate regimes. a managed float market. Use the following Study Question to answer Question 1: STUDY QUESTION 1: What is the International Monetary Fund (IMF)? What are its objectives? The major role of the International Monetary Fund is to ____________ . is not permitted in world trade. a black market. changes in value due to market forces. the IMF manages for a country. A pegged exchange rate is one that: is locked onto the value of another currency. a pegged market. Use the following Study Question to answer Question 3: STUDY QUESTION 4: What is a black market? A foreign exchange market where people are willing to pay more for hard currency than at the official exchange rate is known as __________ a semi-official market. S. weaken the value of the euro. lowering the value of a currency is known as __________ . devaluation In a revaluation pegged exchange rate system. purchasing power parity free floating . it is trying to __________ raise the value of the euro. change the euro to a freely floating currency. weaken the value of the dollar.If the European Central Bank decides to sell euros for U. Use the following Study Question to answer Question 5: STUDY QUESTION 7: How does a floating exchange rate system work? Currencies that respond to supply and demand conditions free from government intervention are known as __________ . dollars. freely floating currencies managed exchange rate systems pegged exchange rate systems weak currencies Use the following Study Question to answer Question 6: STUDY QUESTION 8: How does a government maintain a currency value in a managed fixed rate system? In what type of foreign exchange system does the government determine the price of the currency? a freely floating system a managed fixed rate system a Central Bank system a purchasing power parity system Use the following Study Question to answer Question 7: STUDY QUESTION 9: Explain the adjustment system that enables a pegged currency system to work. . According to purchasing power parity theory. If the currency of an exporter drops in value. it allows the exporter lower export prices or keeps the price the same and increases profit margins.S. the dollar would be expected to _______ against the British pound. Exchange rate movements usually result in foreign exchange gains that allow exporters to drop prices. Exchange rate changes are always negative to exporters when the currency falls in value and positive when the currency rises in value. inflation were 3 percent. if British inflation were 5 percent and U.Use the following Study Question to answer Question 8: STUDY QUESTION 10: Explain how inflation affects currency values according to the purchasing power parity (PPP) theory. rise fall stabilize reverse Use the following Study Question to answer Question 9: STUDY QUESTION 13: What is the difference between fundamental forecasting and technical forecasting of exchange rates? Which type of forecasting uses past trends in exchange rates to predict future exchange rates? Fundamental forecasting Technical forecasting Issues-based forecasting Qualitative forecasting Use the following Study Question to answer Question 10: STUDY QUESTION 16: Why do we need to bother with predicting exchange rate changes? How is the marketing function affected by exchange rate changes? Changes in exchange rates must get passed on to the consumer. S. True False Use the following Study Question to answer Question 13: STUDY QUESTION 4: What is a black market? A black market in foreign currency arises because a currency is stronger than it should be. A freely floating currency is allowed to change in value according to market forces. True False Use the following Study Question to answer Question 12: STUDY QUESTION 3: List and define the categories of exchange rate regimes.Use the following Study Question to answer Question 11: STUDY QUESTION 1: What is the International Monetary Fund (IMF)? What are its objectives? The major objective of the International Monetary Fund is to reduce tariffs so that countries trade more. True False Use the following Study Question to answer Question 14: STUDY QUESTION 5: What is the role of central banks? How do they carry out this role? Although the Federal Reserve Bank in the U. is responsible for overseeing policies concerning the U. dollar.S. it is not allowed to intervene in markets. True False Use the following Study Question to answer Question 15: . True False Use the following Study Question to answer Question 16: STUDY QUESTION 7: How does a floating exchange rate system work? Since the U. dollar is pegged to the euro. True False Use the following Study Question to answer Question 19: STUDY QUESTION 11: What is the Big Mac index. True False Use the following Study Question to answer Question 18: STUDY QUESTION 10: Explain how inflation affects currency values according to the purchasing power parity (PPP) theory. it does not have a floating exchange rate regime. the government closely monitors currency values but lets market forces determine the value of the currency. and what . According to purchasing power parity theory.STUDY QUESTION 6: In what forms do central banks hold their assets? Central banks are allowed to hold currencies and SDRs as reserve assets. the relative difference in inflation should cause a change in exchange rates.S. True False Use the following Study Question to answer Question 17: STUDY QUESTION 8: How does a government maintain a currency value in a managed fixed rate system? In a managed fixed exchange rate system. changes in exchange rates should affect changes in interest rates. type at the beginning of the paragraph. . and at the end. type at the beginning of the paragraph. What are the roles played by the IMF? To create paragraphs in your essay response.are its limitations? According to the Big Mac index. True False Use the following Study Question to answer Question 20: STUDY QUESTION 12: What is the relationship between the Fisher Effect and the International Fisher Effect in terms of currency values? According to the International Fisher Effect. actual exchange rates should mirror the price difference of a Big Mac between two different countries. and at the end. True False What is meant by dollarization? To create paragraphs in your essay response. type at the beginning of the paragraph. and at the end. What is the major purpose of the Euro? To create paragraphs in your essay response. . and at the end. type at the beginning of the paragraph.What are SDRs? To create paragraphs in your essay response. . and at the end. type at the beginning of the paragraph. What is the current value of the SDR? How do you find it? To create paragraphs in your essay response. How often do you pay attention to exchange rates? Is it often covered on the news? Why? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph.How do managers forecast exchange-rate movements? To create paragraphs in your essay response. type at the beginning of the paragraph. and at the end. ask them if exchange rates are important to their activity and how. 11 Chapter Quiz . and at the end.If you have worked for or know people who work for a business with international involvement. type at the beginning of the paragraph. To create paragraphs in your essay response. involve R&D. primary activities and secondary activities. and culture of the firm. coordination systems. input activities and throughput activities. . Use the following Study Question to answer Question 4: STUDY QUESTION 7: What does the idea of core competencies refer to? Why should managers pay attention to it? The term __________ refers to the skills within the firm that competitors cannot easily match or imitate. and delivery of the product. Use the following Study Question to answer Question 3: STUDY QUESTION 6: What is the value chain? In the context of value chain analysis.This activity contains 28 questions. differentiation strategy optimization strategy low cost leadership strategy efficiency strategy Use the following Study Question to answer Question 2: STUDY QUESTION 6: What is the value chain? Value chain activities can be categorized as: primary activities and support activities. the support activities: provide inputs that allow the primary activities to take place. human resources. and the firm infrastructure. Use the following Study Question to answer Question 1: STUDY QUESTION 5: How does a firm create value in terms of differentiation? A strategy that focuses on increasing the actual or perceived attractiveness of a product is referred to as a: ______________ . include the organizational structure. include the design. information systems. profitable activities and unprofitable activities. creation. a firm that aims to achieve location economies does so by: dispersing each of its value creation activities to its optimal location. basing all its value creation activities at the single best location. consolidating activities given the nature of market demand. Use the following Study Question to answer Question 7: STUDY QUESTION 13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this global type? low-cost leadership A primary reason for adopting a _____ strategy is that in some multidomestic cases. value creation the experience curve competitive advantage economies of scope Use the following Study Question to answer Question 6: STUDY QUESTION 8: What conditions influence how MNEs configure and coordinate their value chains? In theory. This is a phenomenon known as _____. concentrating primary activities in one country and support activities in another. and economic conditions may scientific dictate different practices from one country to another. . legal-political.indigenous properties discriminate abilities special attributes core competencies Use the following Study Question to answer Question 5: STUDY QUESTION 8: What conditions influence how MNEs configure and coordinate their value chains? Research of cost behavior in many industries indicates that a company can often cut its costs by 20 to 30 percent each time its cumulative output doubles. cultural. require effective communication and coordination networks among their different units worldwide mostly realize pressures for local responsiveness centralize production facilities in one location worldwide must effectively concentrate core competencies in select subsidiaries Use the following Study Question to answer Question 10: STUDY QUESTION 15: What is a transnational strategy? What are its defining characteristics? Why would managers choose this type? When new knowledge and capabilities are developed in both the domestic and foreign locations. multidomestic strategy transnational strategy global strategy matrix strategy . transnational multidomestic global international Use the following Study Question to answer Question 9: STUDY QUESTION 15: What is a transnational strategy? What are its defining characteristics? Why would managers choose this type? Transnational companies ________________ . both independently and jointly.Use the following Study Question to answer Question 8: STUDY QUESTION 13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this type? Firms pursuing a _____ strategy orient themselves toward achieving maximum local responsiveness. and then purposefully transferred throughout the worldwide organization. the company is following a so-called _____. True False Use the following Study Question to answer Question 14: STUDY QUESTION 6: What is the value chain? Support activities in the value chain have to do with the design.Use the following Study Question to answer Question 11: STUDY QUESTION 3: What is Industry Structure? How can managers interpret it? Increasing globalization of an industry tends to increase rivalry among industry members. its marketing. and its support and after-sale service. and delivery of the product. True False Use the following Study Question to answer Question 13: STUDY QUESTION 5: How does a firm create value in terms of differentiation? The essence of a differentiation strategy is to find unique ways to appeal to a wide range of buyers. creation. True False . True False Use the following Study Question to answer Question 12: STUDY Question 4: How does a firm create value in terms of low-cost leadership? A low-cost leadership strategy is a mixture of multidomestic and global strategies whereby the company attempts to capture the advantages of both. True False Use the following Study Question to answer Question 17: STUDY QUESTION 13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this type? In a multidomestic company.Use the following Study Question to answer Question 15: STUDY QUESTION 8: What conditions influence how MNEs configure and coordinate their value chains? The economies that arise from performing a value creation activity in the optimal location for that particular activity are called geographic economies. managers in the company's home country essentially develop competencies and make decisions to diffuse them globally. They also may choose this strategy if the firm faces relatively weak pressures for local responsiveness and cost reductions. True False Use the following Study Question to answer Question 16: STUDY QUESTION 12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? Companies that choose an international strategy believe they have core competence that competitors in foreign markets lack. . True False Use the following Study Question to answer Question 18: STUDY QUESTION 14: What is a global strategy? What are its defining characteristics? Why would managers choose this type? True A global strategy is one in which the company allows each of its False foreign country operations to act fairly independent. type at the beginning of the paragraph. and at the end. According the Michael Porter (the originator of the 5 forces model) what are the five forces that define the nature of . True False Use the following Study Question to answer Question 20: STUDY QUESTION 15: What is a transnational strategy? What are its defining characteristics? Why would managers choose this type? The transnational strategy is ideal for companies that gain a great deal from global integration and need a great deal of adaptation to local markets.Use the following Study Question to answer Question 19: STUDY QUESTION 14: What is a global strategy? What are its defining characteristics? Why would managers choose this type? Employing a global strategy involves competing in essentially the same basic manner in all countries where the firm does business. True False What is meant by industry structure and what are its contributing factors? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. What are the components making up the firm's value chain? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. What are some of the major challenges MNEs face in managing their international operations? To create paragraphs in your essay response. type at the beginning of the paragraph. . and at the end.competition? To create paragraphs in your essay response. type at the beginning of the paragraph. paragraph. Have you had a corporate strategy course before this course in international business? Do you understand in detail what factors come into play in Porter's Five Forces model? Write To create paragraphs in your essay response. and onthesheet of paper and then check other sources to see if you understand them well. type at the beginning of the them down at a end. and at the end.What is meant by global integration versus local responsiveness in international strategy? To create paragraphs in your essay response. . and at the end. Make a list with two columns. and at the end. the products that seem to need more global integration responsiveness. type at the beginning of the paragraph. type at the beginning of the paragraph. In column one. . Does your list remind you of the examples in the grid in your book? To create paragraphs in your essay response.Do you or have you worked for a company that has major changes in its value chain that you observed or were involved in? To create paragraphs in your essay response. and in column two. write the products you often buy that seem to need local responsiveness. The accuracy of information is better for some countries than for others. Such evaluation is useful for deciding in what part of the value chain to operate.12 Chapter Quiz This activity contains 28 questions. . Some countries prohibit wholly owned operations. Use the following Study Question to answer Question 1: STUDY QUESTION 1: Why do international managers need to understand how to evaluate countries and select among them for operations? What are the major considerations in developing an overall location strategy? Why is it useful for managers to understand how to evaluate countries for operations? Companies must be choosy where they operate because they lack resources to operate everywhere. per capita income is the best indicator to use population size is the best indicator to use labor costs are important indicators of market size companies must consider variables other than income and population when estimating potential demand Use the following Study Question to answer Question 3: STUDY QUESTION 5: When using scanning techniques. what variables are important in indicating where to go to secure resources? Comparison of labor costs is especially important when deciding where ______.Use the following Study Question to answer Question 2: STUDY QUESTION 3: What are the major indicators/variables that are important in comparing countries for market potential? When comparing countries for market potential. one can generally say that _____. to market a product there is apt to be high corruption to locate production to locate companies' headquarters Use the following Study Question to answer Question 4: STUDY QUESTION 7: What is meant by the liability of foreignness. and how does it influence companies' international location decisions? What is meant by the liability of foreignness? a country's external debt the lower early survival rate of foreign companies in comparison with local companies the preference of consumers to buy locally made products governmental requirements on FDI that are different from those placed on local companies . locations. What is meant by first mover advantage? the higher early failure of foreign than of local companies gaining advantages over competitors by capturing the best partners.Use the following Study Question to answer Question 5: STUDY QUESTION 8: Compare the advantages of locating foreign operations to avoid where competitors have gone versus locating where competitors are. assumes that data are collected from the same sources . and suppliers the move into crowded markets to prevent advantages of competitors getting a free-ride by following successful competitors in to market Use the following Study Question to answer Question 6: STUDY QUESTION 9: How might political risk occur? How can companies respond to it? Government takeovers of companies have generally _____. occurred more frequently when countries have broken apart resulted in total loss for the companies taken over have affected local companies more than foreign investors have usually been preceded by formal declarations of intent and legal processes to determine compensation Use the following Study Question to answer Question 7: STUDY QUESTION 11: Compare the major types of published data/information managers can use to compare countries. A matrix to compare countries _____. What are the problems in relying on these data? Which of the following is a reason for comparability differences in governmentally provided data from different countries? difference in base year for data collection difficulty of translating questions for respondents cost differences for goods produced in the home countries differences in accepted corruption Use the following Study Question to answer Question 8: STUDY QUESTION 12: Explain how grids and matrices can be used as tools to compare countries. make a decision on a go-no-go basis must harvest another operation to enter this agreement respond positively only if they are pursuing diversification strategies consider this as an agglomeration tactic Use the following Study Question to answer Question 11: STUDY QUESTION 2: When deciding where to locate production and sales efforts. they generally prefer to do so by _____. trading that operation for other companies' operations in other countries shutting down the operation selling the operation transferring fixed assets to another country Use the following Study Question to answer Question 10: STUDY QUESTION 15: Why do most companies examine expansion proposals one at a time rather than comparing various expansion proposals? When companies receive proposals from other companies to participate in projects. how and why might companies use scanning techniques? How do these techniques differ from the making of final country selections? Scanning allows companies to examine large groups of countries broadly in order to weed out the less potentially lucrative ones. they generally _____. True False .gives a graphical comparison. such as on risk and opportunity is used more for re-investment than for new investment decisions assumes that each variable entered has the same weight Use the following Study Question to answer Question 9: STUDY QUESTION 13: How should reinvestment and harvesting be treated in companies' location decisions? When companies divest foreign facilities. Use the following Study Question to answer Question 12: STUDY QUESTION 4: Explain why/how the ease and compatibility of operations is important in choosing where to operate. companies generally gain long-lived advantages. True False Use the following Study Question to answer Question 15: STUDY QUESTION 8: Compare the advantages of locating foreign operations to avoid where competitors have gone versus locating where competitors are. Most managers prefer to go where they perceive it's easier to operate because these locations offer better returns. Companies may sometimes gain advantages by locating near a cluster of competitors because these locations may attract more buyers. True False Use the following Study Question to answer Question 13: STUDY QUESTION 5: When using scanning techniques. True False Use the following Study Question to answer Question 14: STUDY QUESTION 6: Why is the existence of red tape and corruption important in choosing where to operate? The existence of wide-spread corruption adds to companies' costs of doing business. what variables are important in indicating where to go to secure resources? By moving into countries because they offer labor costadvantages. True False . they generally do so by comparing where countries are located on the matrices they prepare. When companies make their final decisions on where to operate. True False Use the following Study Question to answer Question 19: STUDY QUESTION 14: What is meant by diversification and concentration strategies for international location decisions? Under what circumstances would one strategy be preferable to True the other? False In a concentration strategy. companies generally put most of their efforts into a single region of the world. .Use the following Study Question to answer Question 16: STUDY QUESTION 10: What risks other than political risks should companies consider when making international location decisions? The risks to companies from natural disasters are spread rather evenly around the globe. True False Use the following Study Question to answer Question 18: STUDY QUESTION 12: Explain how grids and matrices can be used as tools to compare countries. What are the problems in relying on these data? Individualized reports are generally the most costly for companies seeking information about their possible foreign operations. True False Use the following Study Question to answer Question 17: STUDY QUESTION 11: Compare the major types of published data/information managers can use to compare countries. and at the end.Use the following Study Question to answer Question 20: STUDY QUESTION 20: How might demographic and technical factors influence changes in the future prime locations for production and sales? Demographers predict that the percentage of the world's population living in currently high-income countries will fall through the year 2050. What are the main opportunities the firm should look for in a target country? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. type at the beginning of the paragraph. . True False Why is the choice of the country in which the firm will operate so important for the firm? To create paragraphs in your essay response. type at the beginning of the paragraph. type at the beginning of the paragraph.What are the risks the firm should assess in the target market? To create paragraphs in your essay response. How is a grid used to compare countries' attractiveness for investment? To create paragraphs in your essay response. . and at the end. and at the end. Your book mentions a variety of external sources of information that may be used to put together an assessment of opportunities and risks in a target country. Consult the list and see which of those sources you may have used in doing research on countries beyond an encyclopedia. Your textbook mentions that firms often need to harvest or at least exit from some country operations. type at the beginning of the paragraph. What are usually the reasons? . and at the end.What are the main criteria for firms' allocation resources among locations? To create paragraphs in your essay response. What did you find? To create paragraphs in your essay response. Do you know of any examples of firms that have closed down some part of their business in a foreign country? Look into firms' exiting countries. and at the end. type at the beginning of the paragraph. type at the beginning of the paragraph. . and at the end.To create paragraphs in your essay response. and at the end. To create paragraphs in your essay response. type at the beginning of the paragraph. What countries do you consider particularly risky for doing business? Write down a list of 10 and check on the Internet to see if the specialists agree or if there are countries that never even occurred to you. S. Use the following Study Question to answer Question 1: STUDY QUESTION 1: How prevalent is exporting today? Exports and imports play _____ in the U. minimizing risk and capital requirements maximizing exposure to political risks providing more control than licensing and franchising is more cost effective than a foreign direct investment strategy Use the following Study Question to answer Question 3: STUDY QUESTION 2: What are the strategic advantages of exports? A disadvantage of exporting is that it ____________ . is quite risky will always lead to the lowest possible production costs is the most expensive method of expanding globally is inconsistent with a global strategy Use the following Study Question to answer Question 4: STUDY QUESTION 2: What are the strategic advantages of exports? The advantages of using an export strategy to build a customer .13 Chapter Quiz This activity contains 28 questions. a much greater role a much lesser role the same role Use the following Study Question to answer Question 2: STUDY QUESTION 2: What are the strategic advantages of exports? The advantages of using an export strategy to serve customers in foreign market include: ________________ . economy than they did 20 years ago. an effective means to avoid tariffs minimizing risk and capital requirements being more costly than licensing and franchising providing the means to easily accommodate local buyer tastes Use the following Study Question to answer Question 5: STUDY QUESTION 2: What are the strategic advantages of exports? Exporting is _______________ . competent market analysis thorough understanding of competitive conditions in foreign markets the tendency to over-customize product foreign customers' needs access to a cost effective distribution program Use the following Study Question to answer Question 7: STUDY QUESTION 10: What are the types of third-party intermediaries that assist exporters? One way for companies new to export to begin identifying the opportunities and challenges of international trade is to hire an: ______________ .base in foreign markets include: ____________________ . export study company informational intermediary export management company export forwarder . a common entry strategy for international global expansion an inevitable activity for all companies operationally complex activity that often poses insurmountable challenges expensive to manage Use the following Study Question to answer Question 6: STUDY QUESTION 5: What are the pitfalls of exporting? Common pitfalls to exporting include: _________________ . Counterpurchase Offset Barter Counterexchange Use the following Study Question to answer Question 11: STUDY QUESTION 1: How prevalent in exporting today? In the United States. the acronym EMC refers to ______________ . more than 90% of firms that export are . the _____ is the most comprehensive source of public assistance and information about export advice. export medical clearance European Monetary Commission export trading company experienced multinational corporation Use the following Study Question to answer Question 9: STUDY QUESTION 15: What sources of assistance are available to the exporter who is using direct selling strategy? In the United States. Congressional Trade Liaison Department of State Central Trade Authority Department of Commerce Use the following Study Question to answer Question 10: STUDY QUESTION 13: What is countertrade and what is its implication to trade? _____ is the direct exchange of goods and/or services between two parties without a cash transaction.Use the following Study Question to answer Question 8: STUDY QUESTION 10: What are the types of third-party intermediaries that assist exporters? In the context of exporting. both in manufacturing and service sectors. True False Use the following Study Question to answer Question 14: STUDY QUESTION 8: What is the role of Customs Agencies? The most comprehensive source of publicly available export related information for American companies is provided by custom agencies. is decreasing as international trade has become more difficult. typically building their domestic business as the primary goal of the firm . True False Use the following Study Question to answer Question 13: STUDY QUESTION 4: What the features of the stages of export development?? "Born global" firms are those that take their time entering international markets.small businesses. True False Use the following Study Question to answer Question 12: STUDY QUESTION 1: How prevalent is exporting today? The volume of export activity in the world. True False Use the following Study Question to answer Question 15: STUDY QUESTION 10: What are the types of third-party intermediaries that assist exporters? A key advantage of relying on EMCs is that the company can . True False Use the following Study Question to answer Question 16: STUDY QUESTION 10: What are the types of third-party intermediaries that assist exporters? Export management companies are export specialists who act as the international finance department for their client firms. True False Use the following Study Question to answer Question 17: STUDY QUESTION 10: What are the types of third-party intermediaries that assist exporters? A common assignment for an EMC is to set up and begin export operations for a firm with the understanding that the firm will take over operations after they are well established. buyback. True False Use the following Study Question to answer Question 19: STUDY QUESTION 14: What is barter.forsake having to develop its own exporting capabilities inhouse. True False Use the following Study Question to answer Question 18: STUDY QUESTION 13: What is countertrade and what are its implication to trade? Countertrade is an efficient means of structuring an international sale when conventional means of payment are inexpensive or prevalent. and offset trade? . equipment. and offset trade? A common problem for firms engaged in barter is the risk of having to accept goods they do not want.Barter occurs when a firm builds a plant in a country .or supplies technology.and agrees to take a certain percentage of the plant's output as partial payment for the contract. training. type at the beginning of the paragraph. type at the beginning of the paragraph. . and at the end. buyback. cannot use. or other services to the country . or have difficulty reselling at a reasonable price. What are the advantages of exporting over FDI? To create paragraphs in your essay response. True False According to your textbook. and at the end. True False Use the following Study Question to answer Question 20: STUDY QUESTION 14: What is barter. what is the difference between an investment bank like Goldman Sachs arranging financing for a foreign firm operating in China and the opening up of the branch of a hotel in a foreign country? To create paragraphs in your essay response. what is the difference between direct selling and indirect selling? To create paragraphs in your essay response. type at the beginning of the paragraph. In exporting. . type at the beginning of the paragraph. and at the end. and at the end.What are some of the strategic advantages of importing? To create paragraphs in your essay response. do you think you are more affected by imports or exports? To create paragraphs in your essay response.What are the kinds of countertrade? To create paragraphs in your essay response. and at the end. type at the beginning of the paragraph. type at the beginning of the paragraph. In your daily life. . Can you think of the single biggest export transaction that can be done through the one-time sale of one good? Write down a couple of ideas and check them. and at the end. and at the end. type at the beginning of the paragraph. To create paragraphs in your essay response. type at the beginning of the paragraph.Do you see a major difference between direct and indirect selling within the local market of your area or the US and direct and indirect selling as described in your textbook chapter on exporting? Make a short list of firms that sell directly and indirectly. To create paragraphs in your essay response. and at the end. .

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