FBP C3 - Importing and Exporting

Question 1

Why should nations trade with other nations?

Answer 1

1. No country is self sufficient
2. Other countries need products that prosperous countries produce
3. Natural resources and technological skills are not distributed evenly around the world

Question 2

competitive advantage

Answer 2

That a country should make then sell those products it produces most efficiently but buy those it cannot produce efficiently

Question 3

absolute advantage

Answer 3

It exists if a country produces a specific product more efficiently than any other country.

Question 4

What products can be imported and exported?

Answer 4

Literally any product can be imported / exported

Question 5

Exporting

Answer 5

selling products to other countries

Question 6

Importing

Answer 6

buying products from other countries

Question 7

Dumping

Answer 7

selling products for less in a foreign country than in your own country.

Question 8

Favorable balance of trade / trade surplus

Answer 8

occurs when exports exceeds imports

Question 9

Balance of payments

Answer 9

is the balance of trade plus other money flows such as tourism and foreign aid.

Question 10

Balance of trade

Answer 10

is the relationship of exports to imports

Question 11

What are some ways in which a company can engage in global business?

Answer 11

• Licensing
• Exporting
• Franchising
• Contract manufacturing
• Joint ventures
• Strategic alliances
• Direct foreign investment

Question 12

How do multinational corporations differ from companies that participate in global business?

Answer 12

Unlike companies that only export or import, multinational corporations also have manufacturing facilities or other physical, presence in global markets

Question 13

Licensing

Answer 13

a firm (the licensor) may decide to compete in a global market by licensing the right to manufacture its products or use its trademark to a foreign company ( the licensee) for a fee (royalty)

Question 14

Franchising

Answer 14

contractual agreement whereby someone with a good idea for a business sells others the right to use the business name and sell a product or service in a given territory in a specific manner

Question 15

Contract manufacturing

Answer 15

a foreign company produces private labels goods to which a domestic company then attaches its own brand name or trademark

Question 16

Joint venture

Answer 16

is a partnership in which two or more companies ( often from different countries) join to undertake a major project.

Question 17

Foreign direct investment

Answer 17

is the buying of permanent property and business in foreign nations

Question 18

Foreign subsidiary

Answer 18

the most common form of FDI. A company is owned in a foreign company country by another company, called a parent company.

Question 19

What are some forces that can discourage participation in global business?

Answer 19

• Sociocultural forces
• Economic forces
• Financial forces
• Legal and regulatory forces
• Physical and environmental forces

Question 20

Exchange rate

Answer 20

is the value of one nations currency relative to the currencies of other countries.

Question 21

Countertrading

Answer 21

is a complex form of bartering in which several countries each trade goods or services for other goods or services.

Question 22

Trade protectionism

Answer 22

is the use of government regulations to limit the import of goods and services. Advocates believe it allows producers to grow, producing more jobs. The key tools of protectionism are tariffs, import, quotas and embargoes.

Question 23

Tariffs

Answer 23

taxes on foreign products. Protective tariffs raise the price of froing products and protect domestic industries: revenue tariffs raise money for the government

Question 24

Embargo

Answer 24

prohibits the importing or exporting of certain products to a particular country

Question 25

Import quota

Answer 25

limits the number of products in certain categories a nation can import

Question 26

Is trade protectionism good for domestic producers?

Answer 26

Debatable. Trade protectionisms offer pluses and minuses.

Question 27

Why do governments continue such practices?

Answer 27

The theory of mercantilism started the practice of trade protectionism, and it has persisted through in a weaker form ever since.

Question 28

World trade organization

Answer 28

meditate trade disputes among nations

Question 29

Common market / trading bloc

Answer 29

a regional group of countries with a common external tariff, no internal tarrif.

Question 30

Outsourcing

Answer 30

the purchase of goods and services from outside a firm rather than providing them from inside the company.

Question 31

Why is outsourcing a major concern for the future?

Answer 31

People fear jobs in the US will be lost due to increased outsourcing and the quality of products will decrease.

Question 32

Free trade

Answer 32

is the movement of goods and services among nations without political or economic barriers.

Question 33

The guiding principal of free economic change is

Answer 33

comparative advantage theory

Question 34

Job seekers intrested ingworking in global trade should consider applying to

Answer 34

small businesses

large businesses

Question 35

A foreign countrys production of private label goods to which a domestic company then attaches its brand name or trade mark is called

Answer 35

contract manufactering

Question 36

Us business people are often accused of ethnocentricity is the belief that

Answer 36

your own culture is superior to other cultures

Question 37

ethnocentricity

Answer 37

your own culture is superior to other cultures

Question 38

Threats to global trade include

Answer 38

terrorism
rouge states
Income inequity

Question 39

Strategies to reach global markets from least to most amount of commitment, control, risk and profit potential

Answer 39

Least

1. Licensing
2. Exporting
3. Franchising
4. Contract Manufactering
5. Joint ventures and strategic alliences
6. Forign direct investment