Q&A Hero

Q: Which of the following is the most appropriate solution to the problem of rising carbon dioxide emissions in developed economies? A. Roll back the trade liberalization efforts that have fostered economic growth and globalization. B. Tie free trade agreements to the implementation of fewer environmental and labor laws in less developed countries. C. Get the nations of the world to agree to policies designed to limit pollutant emissions. D. Increase the export of low-wage manufacturing jobs to developing nations E. Restrict international trade and investment only to services.

Q: The NAFTA was formed in 1994 between: A. Canada, Mexico, and the United States. B. the United States, Brazil, and Argentina. C. Canada, Argentina, and Mexico. D. Columbia, Venezuela, and Brazil. E. Uruguay, Columbia, and Costa Rica

Q: Sometimes there are almost no differences between marketing domestically and marketing internationally. At other times these differences are great.

Q: In the context of the environment, globalization critics argue that: A. free trade discourages firms from advanced nations to move manufacturing facilities to less developed countries. B. adhering to labor and environmental regulations significantly increases the costs of manufacturing enterprises. C. manufacturing enterprises are put at a competitive disadvantage by moving their production facilities to nations that do not have burdensome regulations. D. as countries get richer, they relax their environmental and labor regulations. E. while pollution levels are rising in the worlds richer countries, they have been falling in developing nations.

Q: Although air freight rates are usually higher than ocean freight rates, air freight may be less costly for a firm. Explain why this statement is correct or incorrect.

Q: How do U.S. nonexporting firms often explain their avoidance of foreign markets?

Q: Growing income inequality between the skilled and unskilled workers in advanced nations, such as the United States, is a result of the: A. wages for skilled workers being bid up by the labor market and the wages for unskilled workers being discounted. B. decrease in the outsourcing of low-wage manufacturing jobs offshore and a corresponding increase in demand for unskilled workers. C. shift within advanced economies toward jobs where the only qualification is the willingness to turn up for work every day. D. increasing wage gap between developing and developed nations. E. shortage of unskilled workers and an excess supply of highly skilled workers.

Q: The Panama Canal: A. has to be enlarged for larger ship sizes. B. increases shipping costs from New York to Los Angeles. C. can handle Panamax-size ships. D. makes shipping competitive with air freight. E. reduces travel time between the U.S. West Coast and Europe by 21 days.

Q: Globalization critics argue that the decline in unskilled wage rates in advanced economies is due to the: A. migration of low-wage manufacturing jobs offshore. B. technology induced shift toward jobs that require significant education and skills. C. increased supply of highly skilled workers. D. reducing demand for unskilled workers in developing nations. E. reducing national differences in the cost of labor between developed and developing nations.

Q: LASH and RO-RO are: A. innovative material-handling methods. B. kinds of containerization. C. Panamax ships. D. barges used in materials handling. E. Japanese import requirements.

Q: (p. 30) Which of the following must be true if the critics of globalization are correct? A. The share of national income received by labor, as opposed to the share received by the owners of capital should have increased in advanced nations. B. A decline in the labors share of the economic pie means lower living standards. C. The decline in labors share of national income is due to improvement in production technology and productivity. D. Decline in unskilled wage rates is due to the shift within advanced economies toward jobs that do not require significant education and skills. E. The real labor compensation has expanded in most developed nations since the 1980s.

Q: The CE mark in the EU: A. shows that an export license has been issued. B. indicates the electric current, DC or AC. C. shows that the product conforms to health and safety standards. D. A and C.

Q: Supporters of globalization insist that dislocation in the form of lost jobs is a trade-off that will ultimately lead to the economy being better off. Which of the following is being justified in this case? A. Protectionism and retaliatory trade policy B. Free trade of goods and services C. Rise of Communism D. High tariff on imports of manufactured goods E. The need to be a self-contained nation

Q: Collection documents are: A. for debt carried in cash receivables. B. needed to load and unload transported goods. C. presented to the buyer for payment. D. certificates of origin, invoices, and inspection certificates. E. C and D.

Q: As a result of globalization, the _____ in the United States has increased. A. unemployment rate B. price of goods and services C. demand for unskilled workers D. standard of living E. income equality between workers in skilled and unskilled sectors

Q: Basic named perils marine insurance covers: A. perils of the sea, fires, jettisons, hurricanes. B. theft and larceny. C. piracy on the seas. D. accidents and storms other than hurricanes. E. flooding, tsunamis, earthquakes.

Q: Which of the following statements is true about the implications of globalization on developing countries? A. Globalization has depressed wages in developing nations. B. Among the developed countries, the earnings gap between workers in skilled and unskilled sectors has widened. C. Globalization is increasing the wage gap between developing and developed nations as developed nations experience rapid economic growth. D. The citizens of developing countries have achieved higher living standards due to globalization. E. Globalization has destroyed manufacturing jobs in developing economies.

Q: In the area of shipment risk, ocean vessels assume: A. all the risk for the safety of their cargo. B. none of the risk for the safety of their cargo, except for negligence. C. exporters or importers will have bought adequate insurance. D. marine environments are usually safe. E. half of the risk for the safety of their shipment.

Q: "Exporting jobs to low-wage nations has contributed to: A. higher living standards in those countries that "export" the jobs. B. higher unemployment in wealthy advanced economies such as the United States. C. increase in the income levels in those nations that "export" the jobs. D. lower standards of living in those countries in which the jobs are exported. E. reduced specialization in the production of goods and services.

Q: Bills of lading are of two types: A. invalidated and validated B. endorsed and unendorsed C. to order and straight D. confirmed and unconfirmed E. documented and undocumented

Q: An argument in support of the falling barriers to international trade and investment is that the falling barriers: A. prohibit countries from specializing in the production of goods and services. B. drive the global economy toward greater prosperity. C. reduce the need to export jobs overseas. D. increase the bargaining power of business firms by decreasing the incomes of consumers. E. reduce attacks from foreign competitors.

Q: What is an export license? A. Permission from the U.S. government to export B. An international quality performance rating C. A shipping qualification D. Permission from the top management team to export E. Permission to transfer domestic currency abroad

Q: Which of the following statements is true about the general implications of globalization? A. Globalization is inevitable. B. From a purely economic perspective, globalization is all good. C. Globalization has no negative impacts on the economies of the developed world. D. Globalization has reduced the risks associated with global financial contagion. E. As a result of globalization, a severe crisis in one region of the world can affect the entire globe.

Q: "Comparing the total cost of ocean freight versus air freight, air freight may be cheaper." What components are considered when making the previous statement? A. Insurance rates B. Packing C. Replacement cost of damaged goods D. Inventory cost E. All of the above

Q: Which of the following statements is true about the global economy of the twenty first century? A. National economies are becoming less integrated into a single and interdependent economic system. B. The number of nations joining the ranks of the developed world has reduced. C. Countries have extensively adopted liberal economic policies. D. There are fewer instances of state-owned businesses privatized and markets being opened to more competition. E. The world is currently moving toward an economic system that is more unfavorable for international business.

Q: Collection documents vary from country to country. The most common types of collection documents that the seller provides to the buyer include all of the following except: A. commercial invoices. B. consular invoices. C. income statements. D. certificates of origin.

Q: In the past two decades, majority of Latin American countries have: A. experienced a decline in the health of their economies. B. sold state-owned enterprises to private investors. C. been characterized by low growth, high debt, and hyperinflation. D. restricted investment by foreign firms. E. discouraged both democracy and free market reforms.

Q: The premiums charged by marine insurance companies on an international transaction depend on: A. the age of the ship. B. whether the goods are stowed on deck or under deck. C. the volume of business. D. how the good are packed. E. all of the above.

Q: Which of the following statements is true about the implications of revolutions occurring in China for international businesses? A. China is moving away from free market economic system. B. China represents a huge and largely untapped market for international business. C. Between 1983 and 2010, the foreign direct investment in China decreased dramatically. D. Chinas new firms have failed to be capable competitors in the global market. E. China is continuously discouraging the use of free market economy.

Q: The kinds of marine insurance policies include: A. basic named perils. B. broad named perils. C. partial risk. D. all risk. E. A, B, and D.

Q: Which of the following conditions is most likely to act as a deterrent for foreign firms willing to do business with former Communist nations of East Europe and central Asia? A. The high levels of economic development in these countries B. The signs of growing unrest and totalitarian tendencies seen in these countries C. A strong commitment to market-based economic systems seen in these countries D. The collapse of communism in these countries E. Low returns involved in doing business in these countries

Q: An export bill of lading serves as: A. a contract for carriage between the shipper and the carrier. B. a receipt from the carrier for the goods shipped. C. a certificate of ownership. D. a receipt for the IRS. E. A, B, and C.

Q: Which of the following statements is true about the former communist nations of East Europe and central Asia? A. These countries show no commitment toward democratic and free-market policies. B. These countries have completely moved away from the unstable totalitarian and authoritarian form of government. C. These economies are yet essentially closed to Western international businesses. D. Businesses in these economies tend to be characterized by high risks as well as high returns. E. Compared to the rest of the world, the economies of many of the former Communist states are more developed.

Q: In the present times, many of the former Communist nations of Europe and Asia: A. are closed for Western international businesses. B. are committed to democratic politics. C. are against free market economics. D. have prohibited the use of the Internet by small multinationals. E. have highly developed economies.

Q: A shipper's export declaration (SED) includes: A. names and addresses of the shipper and consignee. B. U.S. port of exit and foreign port of unloading. C. export license number and bill-of-lading number. D. description and value of the goods. E. all of the above.

Q: Foreign trade zones are also called: A. free trade zones. B. transit zones. C. free perimeters. D. export processing zones. E. all of the above.

Q: Universal Lingo, a UK based language translation company employing just 65 people worldwide, has an annual turnover of $1.5 million. In this context, Universal Lingo is most likely to be classified as a(n): A. large domestic firm. B. mini-multinational firm. C. localized company. D. limited company. E. multinational giant.

Q: Which of the following statements is true about the trends in the changing nature of multinational enterprises? A. Global business activity is increasingly being dominated by large U.S. multinational corporations. B. The number of medium-size and small multinationals is decreasing continuously. C. The ranks of the world's largest 100 multinationals are dominated by firms from developing economies. D. The Internet is increasing the barriers that small firms face in building international sales. E. International business is conducted not just by large firms but also by medium-size and small enterprises.

Q: The U.S. Export-Import Bank (Ex-Im Bank) offers the following: A. export credit insurance. B. guarantees. C. direct and intermediary loans. D. Working Capital Guarantee. E. all of the above.

Q: What are mini-multinationals? A. Multinational firms from relatively small countries in terms of area B. Multinationals from the developing nations of the world C. Multinational firms that operate in only one foreign country D. Medium-sized and small multinationals E. Subsidiaries of large multinationals in foreign countries

Q: Which of the following is the most risky for an importer? A. Open account B. Irrevocable letter of credit C. Bank collection time draft D. Cash in Advance E. None of the above

Q: In the global marketplace, the globalization of the world economy has resulted in a relative decline in the: A. growth of medium-size and small multinationals. B. dominance of U.S. firm. C. rise of non-U.S. multinationals. D. desire to disperse production activities outside the home country. E. emergence of firms from developing nations as important competitors.

Q: Freight forwarders' responsibilities may include all of the following except: A. booking space on a ship. B. preparing the export documents. C. verifying that the seller has money in the bank. D. arranging to have the merchandise delivered to the port. E. D and C.

Q: A notable trend in the demographics of the multinational enterprise since the 1960s is the: A. replacement of medium-size and small multinational companies by the multinational giants. B. decline of the non-U.S. multinationals. C. decline of multinationals entering the developing nations of the world. D. growth of mini-multinationals. E. monopolization of the markets in developing countries by U.S. multinational corporations.

Q: Which of the following is the most risky for an exporter? A. Open account B. Irrevocable letter of credit C. Bank collection time draft D. Cash in advance E. Revocable letter of credit

Q: On a consignment sale, the payment risk is: A. assumed by the buyer. B. assumed to be equally shared. C. carried by the seller. D. covered by insurance. E. covered by the bank issuing the L/C.

Q: Silver Fire Electric Inc., a U.S. company, has productive activities in more than two countries. As a result, it would be most appropriate to refer to Silver Fire Electric as a(n) _____ enterprise. A. regional B. pan-American C. unlimited D. multinational E. public

Q: The total number of Incoterms as of 2011 is: A. 11. B. 25. C. 15. D. variable. (They vary as need dictates.) E. 45.

Q: _____ has experienced a decline in the share of FDI stock between 1980 and 2010. A. India B. The United States C. France D. China E. South Korea

Q: Incoterms are developed and maintained by: A. the U.S. Chamber of Commerce. B. the International Chamber of Commerce. C. the WTO. D. the UN. E. a committee of major global companies.

Q: The sustained flow of foreign investment into developing nations: A. has resulted in the rise of communism in those countries. B. has been increasing since the 1980s. C. is aimed at Western powers building political influence in those regions. D. is detrimental to the economic growth in those countries. E. has resulted in a declining trend for firms from these countries to invest outside their borders.

Q: Incoterms are divided into two basic categories: A. open account and L/C. B. general and water transport terms. C. ship and ground transport. D. export and domestic shipments. E. risk and nonrisk terms of sale (buyer's perspective).

Q: Which of the following statements is true about the changing foreign direct investment picture of the global economy? A. Throughout the 1990s, the amount of investment directed at both developed and developing nations decreased dramatically. B. There has been a fall in the share of FDI stock accounted for by developing nations reflecting a declining trend for firms from these countries to invest outside their borders. C. Among developing nations, the lowest recipient of foreign direct investment has been China. D. The share of FDI stock accounted for by U.S. firms has been drastically increasing from 1980s. E. The sustained flow of foreign investment into developing nations is an important stimulus for economic growth in those countries.

Q: Ex-Works is a short way to say: A. cash in advance. B. an open account. C. consignment. D. letters of credit. E. shipment transferred to seller at factory.

Q: The _____ refers to the total cumulative value of foreign investments. A. weighted average foreign exchange B. leveraged foreign investment C. stock of foreign direct investment D. adjusted foreign exchange E. horizontal foreign direct investment

Q: Export marketing plans should be specific about: A. the markets to be developed. B. the marketing strategy for servicing them. C. the tactics required to make the strategy operational. D. cash flow projections. E. A, B, and C.

Q: The motivation for much of the foreign direct investment by non-U.S. firms was the desire to: A. disperse production activities to optimal locations. B. suppress the emerging economies such as China, India, and Brazil. C. spread communism throughout the world. D. increase the competition between domestic industries and U.S. corporations. E. bridge the national differences in culture, consumer preferences, and business practices.

Q: The Department of Commerce organizes events called "Show and Sells" that are helpful in both locating foreign representatives and making sales. Which of the following is not an event offered by the Department of Commerce? A. U.S. pavilions B. Reverse trade missions C. Product literature center D. Education seminars E. None of the above

Q: Due to the changing economic geography, many of tomorrows economic opportunities are most likely to be found in the: A. rich industrialized nations of the world like Great Britain and Germany. B. centrally planned economies of the communist world. C. United States. D. developing nations of the world such as China, India, and Brazil. E. countries that are currently not members of the World Trade Organization.

Q: The Gold Key Service provided through many American embassies offers companies the following: A. orientation briefings. B. market research. C. introductions to potential partners. D. assistance in developing a marketing strategy for the particular country. E. all of the above.

Q: In the context of the changing demographics of the global economy, which of the following has seen a decline? A. Economic development and industrialization of the developing nations B. The U.S. share of world exports of goods and services C. Deregulation of the markets in the centrally planned economies of the communist world D. Japan, Thailand, Malaysia, Taiwan, and South Korea's share of world output E. Economic opportunities in the developing nations of the world

Q: Credit information is available for new exporters through all of the following except: A. Dun & Bradstreet. B. the FCIB (Finance, Credit, and International Business Association). C. the exporter's bank. D. the SBA (Small Business Administration). E. all of the above.

Q: Market Access and Compliance (MAC) specialists seek to open foreign markets to American products. MAC specialists do not do the following: A. develop strategies to overcome obstacles faced by U.S. business in foreign countries and regions. B. monitor foreign country compliance with trade agreements. C. monitor exchange rate movement. D. all of the above. E. A and B.

Q: Which of the following has seen a positive change from 1960 to 2010? A. Growth of the centrally planned economies of the communist world B. U.S. position in the world economy and world trade picture C. The share of world output enjoyed by rich industrialized countries such as Great Britain, Germany, and Japan D. The share of world output accounted for by developing nations E. Prevalence of independent and self-contained national economies

Q: When nonexporting firms are asked why they do not export, they generally list the following as problems: A. locating foreign markets. B. payment and finance procedures. C. export procedures. D. lack of foreign language expertise. E. A, B, and C.

Q: Which of the following statements is true about the changing demographics of the global economy? A. U.S. dominance in export markets has waned as Japan, Germany, and a number of newly industrialized countries have taken a larger share of world exports. B. The change in the position of the U.S. in terms of the share of world output is the result of the absolute decline in the health of the U.S. economy. C. From 1960 to 2010, countries that experienced a large decrease in their share of world output include Japan, Thailand, Malaysia, Taiwan, and South Korea. D. The United States is the only developed nation to see its relative standing in the share of world output slip. E. Today, roughly half the globethe centrally planned economies of the communist worldis off-limits to Western international businesses.

Q: Of the 12 most common mistakes and pitfalls awaiting new exporters, which of the following is not on the list in the textbook? A. Failure to develop an international marketing plan B. Treating international distributors on an equal basis with domestic counterparts C. Insufficient care in selecting overseas distributors D. Failure to get good advice E. None of the above (They are all on the list.)

Q: Which of the following countries has seen a relative decline in its share of world output between 1960 and 2010? A. The United States B. Thailand C. Japan D. China E. South Korea

Q: Every importer should know how the U.S. Customs calculates import duties and know the importance of the product classification.

Q: _____ was the world's most dominant industrial power in the early 1960s. A. India B. Brazil C. Spain D. The United States E. China

Q: Products placed in a bonded warehouse do not pay import duties until they are removed.

Q: Which of the following is most likely to be observed in today's global economy? A. Increasing U.S. share of world output B. Large U.S. entrepreneurial firms dominating the international business scene C. Increasing U.S. dominance in the world economy and world trade picture D. Most of the nations being governed by centrally planned economies of the communist world E. Rapid rise in the share of world output accounted for by developing nations such as China and India

Q: The EU uses the CE mark to certify health and safety.

Q: Which of the following statements is true about the implications of technological innovations for the globalization of markets? A. Technological innovations have facilitated the globalization of production, but have failed to facilitate the globalization of markets. B. Though technological innovations are ushering in the global village, significant national differences remain in consumer preferences, and business practices. C. Technological innovations have caused the rise of communism across the globe. D. Technological innovations have failed to create global markets for consumer products. E. Technological innovations have increased the cost of communication which is hampering globalization of markets.

Q: Straight bills of lading are negotiable documents.

Q: The _____ has been a major force facilitating international trade in services. A. advent of containerization B. development of commercial jet aircraft C. retaliatory trade policies toward international trade in goods D. decline in the U.S. share of world output E. advent of the Internet

Q: A shipper's export declaration (SED) is a document required by the U.S. Department of Agriculture to control exports and supply export statistics.

Q: Since 1980, the world's containership fleet has more than quadrupled, reflecting in part the: A. growing volume of international trade. B. decreasing productivity of labor. C. rising costs of containerization. D. increasing transportation costs. E. decreasing employment opportunities across the globe.

Q: Payment terms are incidental once the customer need has been identified and a sales price agreed to.

Q: Which of the following has been detrimental to the globalization of markets and production? A. The advent of containerization B. The use of the Internet and services such as Skype C. National differences in culture, consumer preferences, and business practices D. Privatizing state-owned enterprises E. The collapse of communism