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Q:
Stakeholders involved with one part of a company often may have little or no involvement with another part of the company.
Q:
The interests of different stakeholders often coincide.
Q:
Government can be considered both a market and nonmarket stakeholder.
Q:
Market stakeholders include nongovernmental organizations and the media.
Q:
Nonmarket stakeholders are those that engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services.
Q:
The normative argument for the stakeholder theory of the firm says that the stakeholder view is simply a more realistic description of how companies really work.
Q:
The instrumental argument for the stakeholder theory of the firm says that companies perform better if they consider the rights and concerns of multiple groups in society.
Q:
The stakeholder theory of the firm argues that a firms sole purpose is to create value for its shareholders.
Q:
Businesses and society are independent of one another.
Q:
A business is any organization that is engaged in making a product or providing a service for a profit.
Q:
Walmart has been called a template for 21st century capitalism.
Q:
(p. 69) According to current U.S. laws, American firms are prohibited from participating in joint ventures with foreign firms.
Q:
(p. 69) A joint venture is a partnership in which two or more companies join to undertake a major project.
Q:
(p. 69) Contract manufacturing involves the production of private-label goods by a foreign company to which a domestic company then attaches its brand name or trademark.
Q:
(p. 69) One way to satisfy an unexpected increase in sales is through contract manufacturing.
Q:
(p. 67) While franchising is popular in United States, it is not an accepted strategy for firms in the global market.
Q:
(p. 67) One advantage of foreign licensing as a strategy to enter the global market is the sharing of trade secrets.
Q:
(p. 66-67) One advantage of foreign licensing is the relatively low cost of entering a foreign market.
Q:
(p. 76) 5 million pairs of eyeglasses to the Japanese market during a given year. The Japanese have imposed a(n):
A. revenue tariff.
B. embargo.
C. import quota.
D. limit order.
Q:
(p. 67) Export trading companies help to match buyers and sellers from different countries.
Q:
(p. 66) Rhett spoke with a German company that said it might be interested in producing his products in their market. They would pay him a royalty for what they sold and would bear all the start-up expenses of this effort. This German company is proposing a:
A. subsidiary agreement.
B. joint venture.
C. export trading company.
D. licensing agreement.
Q:
(p. 67) Export trading companies assist businesses in getting paid for export transactions.
Q:
(p. 73) Rhett has heard predictions that the value of the U.S. dollar is likely to decline substantially over the next six months. This should:
A. hurt his overseas efforts since his prices will be very high.
B. stop overseas efforts because dollars will not be negotiable.
C. help his overseas efforts since his prices will be lower.
D. force him into accepting no other currency except the dollar.
Q:
(p. 67) The purpose of Export Assistance Centers is to help major U.S. corporations develop better relations with foreign governments.
Q:
(p. 71) Although he is confident of success, Rhett is concerned that social, cultural and economic differences in other nations may create some problems. He believes he should adapt his approach to these differences rather than trying to force the "American way" on foreign consumers. Rhett's attitude suggests that he does not have a(n) ___________ approach to business.
A. ethnocentric
B. flexible
C. ethical
D. countercultural
Q:
(p. 66) When competing in global markets, business organizations can choose among a variety of strategies to reach foreign buyers.
Q:
(p. 67) Initially, Rhett believed he should maintain his production facilities within the United States and simply export his designer eyeglass frames to foreign sellers. However, he lacked expertise in exporting. Rhett decided to see if the federal government could provide any help by contacting a(n):
A. World Trade Center.
B. Export Assistance Center.
C. Federal Reserve Bank.
D. U.S. Export Savings Bank.
Q:
(p. 66) Tokyo Disneyland is an example of an export trading company.
Q:
(p. 67) Franchising is popular both domestically and internationally.
Q:
Explain how socio-cultural differences can create trade difficulties in world markets.
Q:
(p. 66; figure 3.4) Of the strategies available to reach global markets, licensing offers the firm the greatest opportunity for profit potential.
Q:
Describe four different strategies for reaching global markets.
Q:
(p. 66) Granting another firm the right to manufacture your product or use your trademark for a fee is called licensing.
Q:
Explain the difference between comparative and absolute advantage in global markets.
Q:
(p. 65) Flynn Graphics is a small U.S. firm that began selling its products in the global market a few years ago. Flynn's global approach is unusual, since the trend has been for small firms to focus on domestic markets, leaving global markets to larger firms.
Q:
(p. 79) Which of the following best describes the impact of the Internet on global market transactions?
A. The use of email has minimized the risk of expropriation of a firm's assets by a foreign government.
B. The Internet allows new competitors entering a foreign market to bypass the traditional distribution channels.
C. Legal and regulatory forces are ignored because Internet transactions are difficult to police.
D. Internet chat rooms allow for an increased use of bartering as a method of resolving international payment problems.
Q:
(p. 65) Slow growth in the U.S. economy during the late 1980s and early 1990s caused American firms to reduce their efforts to sell in global markets.
Q:
(p. 82) Which of the following statements best describes the possibilities for small businesses in global markets?
A. Small businesses have little chance of competing against giant multinational corporations in global markets.
B. Small businesses already dominate global business. In fact, most multinational corporations are actually quite small.
C. Small businesses are often better prepared to enter global markets than large, bureaucratic corporations.
D. The main problem faced by small businesses in global markets is that franchise arrangements favored by small business owners are illegal in most countries.
Q:
(p. 65) The value of Chinese exports to the United States is greater than the value of the goods they buy from the United States. This results in a U.S. trade deficit.
Q:
(p. 80) Which of the following is a valid criticism when potential investors look at China?
A. Investment in China is too risky and not worth the effort.
B. Recently economic growth has slowed considerably in China.
C. There is a complete lack of entrepreneurship in China.
D. Concerns remain about China's one-party political system.
Q:
(p. 64) When the U.S. provides foreign aid to Israel and Egypt, a balance of payments outflow occurs.
Q:
(p. 81; figure 3.9) Which of the following is an advantage of offshore outsourcing?
A. Companies can focus on areas in which they can excel and grow.
B. Wages increase in the home country.
C. Product quality improves and increases a company's reputation.
D. Communication between the company and its suppliers improves.
Q:
(p. 65) As the most powerful economy in the world, the United States can avoid having an unfavorable balance of payments.
Q:
(p. 81; figure 3.9) Which of the following is an advantage of offshore outsourcing?
A. Companies can create efficiencies that in fact let them hire more workers.
B. Wages increase in the home country.
C. Product quality improves and increases a company's prices.
D. Communication between the company and its customers improves.
Q:
(p. 64) Japanese auto manufacturers, such as Toyota and Nissan, have invested billions of dollars in the United States by building new factories, warehouses, and offices. These investments are inflows to the balance of payments for the United States.
Q:
(p. 80-81) Russia's persistent political and social problems have caused that country to be:
A. ignored by global traders.
B. closed to trade with the rest of the world.
C. attractive to many global businesses despite the problems.
D. more attractive to global traders.
Q:
(p. 64-65) A favorable balance of trade occurs when the value of a nation's exports exceeds its imports.
Q:
(p. 80) China has shifted its economy into high gear since:
A. joining the New York Stock Exchange.
B. changing its economic philosophy from central planning to free markets.
C. changing its economic philosophy from free markets to central planning.
D. changing its economic philosophy from free markets to communism.
Q:
(p. 65) A Chinese steel manufacturer is selling certain types of steel in the United States at a price significantly lower than it sells the same steel in its home market. This practice may be a violation of U.S. law.
Q:
(p. 81) __________ is the purchase of goods and services from foreign sources rather than producing them within the United States.
A. Offshore procurement
B. Domestic outsourcing
C. Foreign distribution
D. Offshore outsourcing
Q:
(p. 65) Foreign firms find it difficult to sell goods in the United States because most goods produced by foreigners are already produced more efficiently by American firms.
Q:
(p. 81) The "second wave" of offshore outsourcing refers to:
A. moving jobs to South America in addition to China.
B. moving skilled service jobs such as those in accounting offshore.
C. moving jobs to India in addition to China.
D. moving manufacturing jobs offshore.
Q:
(p. 65) Some firms will practice "dumping" in order to gain a foothold in a new market.
Q:
(p. 81) U.S. companies have shifted focus from __________ to _________
A. maximizing costs; providing less worker benefits.
B. assembling products; design and architecture.
C. design and architecture; assembling products.
D. providing less worker benefits; maximizing costs.
Q:
(p. 64-65) The spending of a German family visiting Disney World in Florida will add to the unfavorable balance of payments of the United States.
Q:
(p. 80) Many business experts contend that __________ will likely be the growth market of the future.
A. Asia
B. Africa
C. South America
D. the Middle East
Q:
(p. 64-65) The country of Nelly exports $250 of goods and services and imports $170 of goods and services. Nelly has an unfavorable balance of trade of $80.
Q:
(p. 80) For firms interested in global markets, investments in China are considered to be:
A. too risky and not worth the effort.
B. illegal based on World Trade Organization (WTO) rulings.
C. an emerging business opportunity.
D. dependent on Yao Ming's success in the National Basketball Association.
Q:
(p. 65) The United States owes more money to other nations than other nations owe the United States.
Q:
(p. 79) The outlook for growth in global trade appears to be:
A. less optimistic than in the past.
B. more interesting yet more challenging every day.
C. unclear and lacking focus.
D. nonexistent.
Q:
(p. 65) The United States currently enjoys a favorable balance of trade with the rest of the world.
Q:
(p. 78) Which of the following is an objective of the North American Free Trade Agreement (NAFTA)?
A. Increase trade barriers between member nations.
B. Increase investment opportunities in each of the member nations.
C. Create a single currency to compete with the euro.
D. Provide protection for illegal immigrants.
Q:
(p. 65) Compared to many other industrialized countries, the United States has historically exported a much higher percentage of its products than other countries do.
Q:
(p. 78) One objective of NAFTA is to:
A. increase trade barriers between the countries involved.
B. decrease investment opportunities in the countries involved.
C. promote conditions of fair competition in this free-trade area.
D. improve working conditions in Central America.
Q:
(p. 65) Compared to many other industrialized countries, the United States has historically exported a much lower percentage of its products than other countries do.
Q:
(p. 78) A major concern voiced by U.S. critics of the North American Free Trade Agreement (NAFTA) is that it would result in:
A. higher prices for consumer goods.
B. loss of jobs in the U.S. economy.
C. national security problems.
D. increased illegal immigration from Mexico.
Q:
(p. 64) When trading in global markets, most countries prefer to import more than they export.
Q:
(p. 76) Mortavia is a small nation that has followed protectionist policies for many years. Which of the following would be an example of a nontariff barrier established by Mortavia?
A. Establishment of a tax levied on imported goods so that foreign products are more expensive than competing domestic goods.
B. Establishment of a tax levied on imported goods designed primarily to raise money for the government.
C. Establishment of restrictive quality standards requiring foreign firms to make expensive modifications in their products before they can be sold in Mortavia.
D. Participation in the Uruguay Round of GATT negotiations.
Q:
(p. 65) The United States has specific laws requiring foreign firms selling goods in the United States to price their products to include 10% overhead costs and an 8% profit margin to prevent dumping.
Q:
(p. 76) The emerging nation of Lancerland has 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.
A. revenue
B. protective
C. percentage
D. fixed
Q:
(p. 65) Dumping is the practice of selling products in foreign markets at lower prices than those charged in the producing country.
Q:
(p. 75-76) Labor unions and businesses in the heavy equipment industry have asked the U.S. Congress to place a tax on imported equipment in order to make it more expensive. They hope that this will allow U.S. producers to be more competitive. The U.S. heavy equipment industry appears to be seeking a(n):
A. injunction.
B. revenue tariff.
C. nontariff barrier.
D. protective tariff.
Q:
(p. 65) While the U.S. exports the largest volume of goods globally, it exports a much lower percentage of its products than other countries do.
Q:
(p. 75) Responding to pressure from political lobbyists representing the steel industry, the U.S. government levies a tax on steel products imported from Europe. This is an example of a(n):
A. protective tariff.
B. revenue tariff.
C. quota.
D. embargo.
Q:
(p. 65) Recently the United States had its highest trade deficits with China.
Q:
(p. 76) The keiretsu tradition in Japan serves as a:
A. protective tariff.
B. revenue tariff.
C. quota.
D. nontariff barrier.
Q:
(p. 64-65) The United States enjoys a trade surplus in the global market.
Q:
(p. 76) Denmark requires foreign companies that sell butter in Denmark to sell it in cubes, not tubs. This type of requirement is known as a:
A. protective tariff.
B. revenue tariff.
C. quota.
D. nontariff barrier.
Q:
(p. 64) 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.
Q:
(p. 75) Traders in the 18th century were encouraged to focus on selling their nation's goods in the global market to create a favorable balance of trade. Nations attempted to sell more goods to other nations than they bought from other nations. This approach to global trading is called:
A. ethnocentrism.
B. mercantilism.
C. protectionism.
D. isolationism.