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Exam 3: Doing Business in Global Markets

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Question 121

True/False

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Expropriation occurs when a host government takes over the assets of a foreign company.

A) True
B) False

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Question 122

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The European Union created a single monetary unit to replace the national currencies of twelve member nations.This common currency is known as the:

A) e-dollar.
B) pound.
C) mercosur.
D) euro.

E) C) and D)
F) A) and D)

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Question 123

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Fred Bergsten of the Institute for International Economics estimates that every $1 billion of U.S.exports:

Many U.S.companies fail to think globally.

One of the rules of a common market is that all participating nations will uphold a common tariff on goods and services that are imported from countries that are not members of the trading bloc.Goods imported from non-member countries are more expensive than goods coming from member countries. Member nations agree to an external tariff directed toward all non-member nations.Non-member nations do not belong to their trading bloc.

Many global economists believe the movement toward free trade areas and common markets is bad news for poorer countries that aren't members of a trading bloc. To date,common markets and free trade areas have strengthened ties between developed nations.Many global economists worry that if this trend continues,poor,developing nations,excluded from the major blocs,will suffer economically.

Imported wines such as Pinot Noirs from France or Italy often sell at a higher price than wine from Napa Valley,California.This is due to the protective tariff importers pay for the foreign wine. Protective tariffs raise the retail price of imported products so domestic goods are more competitively priced.

An important principle for firms desiring to export is:

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

If visitors from Germany spend money at Orlando,Florida's Disney World,it will increase the U.S.'s unfavorable balance of payments. An unfavorable balance of payments occurs when more money is flowing out of a country than is flowing into that country.Foreign tourists spending money in the U.S.provide an inflow of money.

Global trade is the exchange of goods and services between countries.

An unfavorable balance of trade occurs when the value of:

American businesspersons often fail to adapt to foreign markets because they feel that American culture is superior to other cultures in the world. American businesspersons have been accused of being ethnocentric because they feel the American culture is superior to all others.

Having recently found sources of oil on their own land,the infant nation of Lancerland enacted a tariff on imported petroleum in order to raise money for their new government.This trade restriction is an example of a(n) ________ tariff.

In order to prevent dumping,U.S.law stipulates that foreign firms selling similar products as domestic firms to U.S.customers must charge at least 10% more than what U.S.firms charge.

On a number of issues,the strategy behind common markets is debatable,but GATT is certain that such alliances do not prohibit individual member nations from expanding globally. GATT and the WTO take issue with whether or not common markets inhibit the global expansion of individual member nations.Member nations agree to an external tariff directed toward all non-member nations - nations that do not belong to their trading bloc.

Adam's Apple Corporation ships all of the apples from its orchards in Washington to a single buyer in Japan.The firm's entire profits are derived from this international transaction.Adam's Apple Corporation:

An article published in the journal of "Modern Healthcare" reported that in 2007,the governments of the following nations held sizeable investments in U.S.companies, (including U.S.healthcare providers) : These investments are called _____________ and some experts fear that the strategy behind these governments sinking large amounts of capital in U.S.companies may have ___________________.

_______ is a complex form of bartering in which several countries may be involved,each trading products and services,for the products and services of another country.

In 2008,Emerson,Inc.reported that it owns and operates 265 companies worldwide with 23% of its sales coming from Europe,18% from Asia,46% from the U.S. ,and 13% from other parts of the world.Clearly,Emerson exemplifies _______________.