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Exam 3: Competing in Global Markets

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Question 71

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Which of the following is a disadvantage of foreign investment in Canada?

A) Canada is able to avoid becoming a debtor nation.
B) Canada has a favourable balance of trade.
C) Creation of a "branch plant economy" in Canada.
D) This breaks the rules of NAFTA.

E) All of the above
F) B) and D)

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Question 72

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An unfavourable balance of trade occurs when the value of:

A) imports equals the value of exports.
B) cash inflows are equal to the value of cash outflows.
C) exports exceed the value of imports.
D) imports exceeds the value of exports.

E) A) and C)
F) All of the above

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Question 73

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Adam's Apple Corporation ships all of the apples from its orchards in British Columbia to a single buyer in Japan.The firm's entire profits are derived from this international transaction.Adam's Apple Corporation:

One advantage of foreign licensing as a strategy to enter the global market is the sharing of trade secrets.

Last year,the nation of Tigerland imported goods totalling $500 million and exported products totalling $386 million.Tigerland experienced a(n) :

Absolute advantage is the basis for most global trade.

Today there are few examples of absolute advantage in global markets.

The North American Free Trade Agreement (NAFTA)was driven by the desire of Canada to have access to the U.S.market.

Which of the following countries was the prime mover behind NAFTA?

Sociocultural forces that affect global businesses include customs,language,and religion.

Trade relations enable each nation to produce what it is most capable of producing and to bu what it needs in a mutually beneficial exchange relationship.

Only firms with a physical presence in different nations can be truly called a multinational corporation.

Importing is the selling of products to another country.

There are several reasons why countries trade with other countries.State one reason.

Effective marketing strategies focus on the product and ignore the sociocultural differences in the global environment.

Canadian firms must follow Canadian laws in conducting business globally.

Canadian subsidiaries of foreign-based companies have played a major role in developing the Canadian economy.

Protective tariffs are designed to raise money for the government.

The comparative advantage theory states that all nations should strive to become self-sufficient in order to enjoy the highest standard of living.

McHugh Corporation of Ireland and Enomoto Enterprises based in Japan have undertaken the production of a new electric car with rechargeable batteries that can be driven at high speeds for long distances.They have shared the investment,and each has contributed important technological expertise to the effort.These two firms have entered into a(n) :