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38 Multiple choice questions

  1. Practice by which a company produces goods through an independent contractor in a foreign country
  2. Alliances in which the partners fund a separate entity (maybe a partnership or corporation) to manage their joint operation
  3. Allows a foreign company (licensee) to sell the products of a producer (licensor) or to use its intellectual property (such as patents, trademarks, copyrights) in exchange for royalty fees
  4. -Occurs when manufacturers export a product to another country at a price either below the price charged in its home market or below its cost of production -Purpose is sometimes to increase market share in a foreign market or to drive out competition.
  5. Agreement among governments of the U.S., Canada, and Mexico to open their borders to unrestricted trade
  6. The products that a country must decline to make in order to produce something else
  7. Government policies that restrict free trade
  8. Groups of countries that have joined together to allow goods and services to flow without restrictions across their mutual borders
  9. Difference, over a period of time, between the total flow coming into a country and the total flow going out
  10. Cultures in which personal and family connections have an effect on most interactions, including those in business
  11. Formal establishment of business operations on foreign soil - the building of factories, sales offices, and distribution networks to serve local markets in a nation other than the company's home country
  12. Association of European countries that joined together to eliminate trade barriers among themselves
  13. Cultures in which personal and work relationships are compartmentalized; you don't necessarily need to know much about the personal context of a person's life to deal with him or her in the business arena (U.S., Germany)
  14. Selling domestic products to foreign customers
  15. Agreement between 2 companies to pool resources in order to achieve business goals that benefit both partners
  16. Practice of using outside vendors to manufacture all or part of a company's products
  17. -Agreement in which a domestic company (franchiser) gives a foreign company (franchisee) the right to use its brand and sell its products
    -The franchisee is responsible for all operations but agrees to operate according to a business model established by the franchiser
    -In turn, the franchisor usually provides advertising, training, and new-product assistance
  18. Condition whereby a company is the only source of a product or is able to make more of a product using the same amount of or fewer resources than other countries
  19. Condition whereby one nation is able to produce a product at a lower opportunity cost compared to another nation
  20. Buying products overseas and reselling them in one's own country
  21. When a country sells more products than it buys
  22. Limit the quantity of goods that may enter the commerce of the United States in a specific period. When filled, further entries are prohibited during the remainder of the quota period
  23. Encouraged free trade by regulating and reducing tariffs and by providing a forum for resolving trade disputes
  24. Difference between value of a nation's imports and its exports during a specified period
  25. Occurs when facilities set up in a foreign country replace U.S. manufacturing facilities and are used to produce goods that will be sent back to the U.S. for sale
  26. -An independent company owned by a foreign firm
    -This approach to going international not only gives the parent company full access to local markets but also exempts it from any laws or regulations that may hamper the activities of foreign firms
    -Parent company has tight control over the operations of a subsidiary, but while senior managers from the parent company often oversee operations, many managers and employees are citizens of the host country
  27. Prohibits distribution of bribes and other favors in the conduct of business
  28. Large company that operates in many countries
  29. -International financial institution that provides economic assistance to poor and developing countries
    -Loans are made to help countries improve the lives of the poor through community-support programs designed to provide health, nutrition, education, infrastructure, and other social services
  30. Government payments given to certain industries to help offset some of their costs of production
  31. -Government imposed restrictions on the quantity of a good that can be imported over a period of time
    -Used to protect specific industries, usually new ones or those facing strong competitive pressure from foreign firms
  32. Value of one currency relative to another
  33. International organization that monitors trade policies and whose members work together to enforce rules of trade and resolve trade disputes
  34. When a country buys more products than it sells
  35. Permit a specific quantity of imported merchandise to be entered at a reduced rate of customs duty during the quota period. There is no limitation of the amount of the quota product that may be imported into the U.S. at any time, but quantities entered during the quota period in excess of the quota quantity for that period are subject to higher duty rates
  36. Taxes on imports, raise the price of foreign-made goods, making them less competitive. Used to raise revenue for a government
  37. Use of trade controls to reduce foreign competition in order to protect domestic industries
  38. -International organization set up to loan money to countries with troubled economies
    -In exchange for relief in times of financial crisis, borrower countries must institute sometimes painful financial and economic reforms