Q&A Hero

Q: Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

Q: France gave Excelsior's Limited permission to export its product as long as the company obtained a special license first. Excelsior has been waiting six months for the license and is wondering if it will ever arrive. Excelsior's Limited is experiencing a(n) ________. A) administrative delay B) local content requirement C) embargo D) currency control

Q: Low tariffs and high quota limits encourage market entry by means of investment.

Q: When Excelsior's Limited tried to convert its earnings from one country, the government stipulated that the company had to exchange its currency at a very unfavorable rate. This is an example of a(n) ________. A) administrative delay B) currency control C) subsidy D) tariff

Q: The most important disadvantage of a strategic alliance is that it can create a future local or even global competitor.

Q: Excelsior's Limited tried to sell its product in Canada, but was told that at least forty percent of the product must be manufactured in Canada. This is an example of a(n) ________. A) administrative delay B) local content requirement C) tariff D) embargo

Q: In a backward integration joint venture, the parties choose to invest together in downstream business activities.

Q: Which of the following is the most likely reason for Konesia's government to impose an import quota?A) to maintain adequate supplies of a product in the home marketB) to maintain market shares and prices of domestic producersC) to restrict the supply of a product to world marketsD) to maintain the exports of a product at target levels

Q: Under a turnkey project, one company supplies another with managerial expertise for a specific period of time.

Q: If Konesia chooses to levy tariffs as a percentage of the stated price of an imported product, this would be an example of a(n) ________. A) compound tariff B) specific tariff C) ad valorem tariff D) tariff-quota

Q: The primary advantage of franchising is that franchisees have a great degree of organizational flexibility.

Q: Which of the following would be Konesia's least appropriate method to restrict unwanted trade? A) introduce an administrative delay B) impose a quota C) reduce tariffs D) impose a currency control

Q: Franchising is primarily used in the manufacturing industries.

Q: A country that believes an imported product is being sold in its market for a price lower than the cost of production for the product may impose a(n) ________ in retaliation. A) countervailing duty B) ad valorem tariff C) antidumping duty D) compound tariff

Q: The brand name or trademark of a company is normally the single most important item desired by a franchisee.

Q: Restrictions on the convertibility of a currency into other currencies are referred to as ________. A) administrative delays B) currency crisis C) local content requirements D) currency controls

Q: Cross licensing occurs when companies use licensing agreements to swap intangible property with one another.

Q: Purposely understaffing customs offices to cause time delays, requiring special licenses that take a long time to obtain, and requiring air carriers to land at inconvenient airports are all examples of ________. A) local content requirements B) import quotas C) administrative delays D) voluntary export restraints

Q: The open account method of export/import financing is used when the two parties are unfamiliar with each other.

Q: Regulatory controls or bureaucratic rules designed to impair the rapid flow of imports into a country are called ________. A) local content requirements B) administrative delays C) voluntary export restraints D) import quotas

Q: Letters of credit are popular among traders because banks assume most of the risks.

Q: A(n) ________ is the most restrictive nontariff trade barrier and is typically applied to accomplish political goals. A) tariff-quota B) subsidy C) embargo D) voluntary export restraint

Q: A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Q: Tariff-quotas are used extensively in the trade of ________. A) manufactured goods B) services C) textiles D) agricultural products

Q: A sight draft extends the period of time following delivery by which the importer must pay for goods.

Q: A lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota is called a(n) ________. A) export quota B) tariff-quota C) ad valorem tariff D) voluntary export restraint

Q: Advance payment made by an importer to an exporter normally takes the form of a sight draft.

Q: Countries might impose a(n) ________ in response to the threat of an import quota or total ban on a product by an importing nation. A) embargo B) ad valorem tariff C) compound tariff D) voluntary export restraint

Q: Advance payment is the least favorable method of payment collection for exporters.

Q: A country imposes a tariff on goods that it sells abroad at the request of another nation. This is an example of a(n) ________. A) embargo B) ad valorem tariff C) compound tariff D) voluntary export restraint

Q: Switch trading is the export of industrial equipment in return for products produced by that equipment.

Q: Which of the following is true of quotas? A) They are the most common type of trade barrier. B) They help domestic producers maintain their market shares and prices. C) Their licenses are granted by governments to other nation companies on a five-year basis. D) They lead to a decrease in the prices of intermediate goods.

Q: Countertrade is not an option for smaller companies because of the cash outlays involved.

Q: A restriction on the amount of a good that can enter or leave a country during a certain period of time is called a(n) ________. A) administrative delay B) local content requirement C) quota D) tariff

Q: Countertrade provides a way for firms to trade either by using a small amount of hard currency or even none at all.

Q: Using tariffs to generate government revenue is most common among ________. A) developed countries B) developing countries C) western nations D) First World nations

Q: Agency relationships are popular among exporters because they are easy to terminate should difficulties arise.

Q: Which of the following statements is true of tariffs? A) They are the major source of government revenue in developed nations. B) They increase products' appeal to buyers. C) They lower the effective prices of imports. D) They protect domestic producers.

Q: Using a distributor increases an exporter's risk.

Q: A(n) ________ tariff is levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit. A) specific B) compound C) ad valorem D) transit

Q: Typically, indirect exporting relies on local sales representatives or distributors.

Q: A(n) ________ tariff is levied as a particular fee for each unit of an imported product. A) specific B) compound C) ad valorem D) transit

Q: Direct exporters always sell directly to end users.

Q: A(n) ________ tariff is levied as a percentage of the stated price of an imported product. A) specific B) compound C) ad valorem D) transit

Q: Matching market needs to the company's abilities is the first step in developing a successful export strategy.

Q: The most common tariffs used today are the ________ tariffs. A) import B) transit C) inverted D) export

Q: Companies can achieve economies of scale by expanding into international markets.

Q: A tariff levied by the government of a country that a product is passing through on its way to a final destination is called a ________ tariff. A) transit B) compound C) export D) specific

Q: Most large companies use exporting as a means of expanding total sales when the domestic market has become saturated.

Q: Which of the following statements is true of tariffs? A) Tariffs increase an imported product's appeal to buyers. B) Transit tariffs are the most widely-levied tariffs. C) Ad valorem tariffs are levied as a specific fee for each unit of an imported product. D) Export tariffs are used by countries when they believe an export's price is lower than it should be.

Q: The most common method used for buying and selling goods internationally is licensing.

Q: A tariff levied by the government of a country that is selling goods abroad is called a(n) ________. A) export tariff B) ad valorem tariff C) compound tariff D) specific tariff

Q: Explain why the availability of data is a challenge when conducting international research. How do interviews and focus groups help in the availability of data?

Q: Which of the following will add to the cost of an imported product by levying an additional tax upon it? A) tariffs B) quotas C) local content requirements D) embargoes

Q: Discuss the importance of field trips in last stage of the market-screening process. How do trade shows and trade missions help companies conducting primary international research?

Q: Which of the following is a method of restricting trade? A) export financing B) local content requirements C) subsidy D) foreign trade zones

Q: Describe the role of special government agencies in promoting exports and imports.

Q: What is primary market research? Describe any four primary market research methods.

Q: Describe each instrument that governments use to promote trade.

Q: Discuss how companies identify the basic appeal for products when screening a potential market, and explain how international organizations provide the essential information to researchers.

Q: The major purpose of foreign trade zones is to implement barriers to trade and commerce.

Q: Define secondary market research and briefly discuss any three secondary data sources.

Q: What are the factors managers consider when analyzing industrialized markets? Discuss why the comparability of data is a major challenge while conducting international research.

Q: Receiving financing from government agencies is often crucial to the success of small businesses just beginning to export.

Q: Government trade promotion agencies ________. A) enable imports at discounts B) set up foreign trade zones across the country C) advertise in other countries to promote the nation's exports D) place voluntary export restraints on companies that fail to export adequately

Q: Discuss the importance of cultural factors when assessing a national business environment, and explain why cultural differences between markets create difficulties when conducting international research.

Q: A common purpose of many companies' facilities in foreign trade zones is ________. A) final product assembly B) acquisition of raw materials C) product design D) product manufacturing

Q: Briefly explain the main difficulties associated with conducting international market research.

Q: Which of the following statements is true of foreign trade zone? A) It is an area through which merchandise is allowed to pass with fewer procedures but higher taxes. B) These areas provide very limited employment opportunities. C) Goods imported into these zones require import licenses and are subject to import duties. D) International companies can store goods in these zones without incurring taxes, before shipping them to other countries.

Q: Describe any five variables commonly included in creating a market-potential analysis for an emerging market.

Q: What types of information are found in a typical industry analysis? How can companies use this information?

Q: Which of the following financial companies in the United States is involved in activities of selling of goods abroad, and offers insurance on foreign accounts receivable? A) National Cooperative Bank B) Overseas Private Investment Corporation C) Export-Import Bank D) Inter-American Development Bank

Q: Which of the following statements is true of export financing? A) Small businesses that have just started to export are financially stable and seldom require financing from government agencies. B) The Ex-Im Bank finances the export activities of companies all over the world. C) Governments usually offer loans to exporters with above-market interest rates. D) Governments may promote exports by offering loan guarantees.

Q: What is country image? Explain how it affects the screening process using examples.

Q: A designated geographic region in which merchandise is allowed to pass with lower customs duties and/or fewer custom procedures is called a(n) ________. A) foreign trade zone B) free trade area C) single market D) open border

Q: Briefly discuss the important political and legal forces that should be analyzed in the market/site screening process.

Q: Scenario: Indy Bats LLCIndy Bats LLC is looking for new markets for its products. Matt Johnson has been appointed head of a special team that has been given the responsibility of identifying new markets for the company's products. The company is especially interested in exploring emerging economies.To estimate an emerging market's openness, Matt could analyze its ________.A) market receptivityB) differentiation strategyC) commercial infrastructureD) country risk

Q: Financial assistance given to domestic producers in the form of cash payments is an example of a(n) ________. A) ad valorem tariff B) quota C) subsidy D) export tariff

Q: Which of the following is an instrument that governments use to promote trade? A) embargoes B) tariffs C) export financing D) administrative delays

Q: Scenario: Indy Bats LLCIndy Bats LLC is looking for new markets for its products. Matt Johnson has been appointed head of a special team that has been given the responsibility of identifying new markets for the company's products. The company is especially interested in exploring emerging economies.If Matt wants to estimate the extent to which free-market principles predominate in an emerging market, Matt should consider the variable called ________.A) economic freedomB) commercial infrastructureC) market receptivityD) market intensity