A company is considering establishing a subsidiary in a new host country and wishes to prepare its expatriates to adapt to the local environment. How should this company prepare its expatriates? Negotiation Operational training Repatriation Cultural Training - ANSWERCultural training What happens to consumer surplus when tariffs and quotas are discontinued? - ANSWERThey increase Which type of tariff is put in place to specifically ensure that domestic industries are given an advantage? - ANSWERProtective What is a benefit of implementing a system of free trade? - ANSWERReduced tariffs would result in lower costs of imported raw materials. How are free trade agreements handled differently than treaties in the United States? - ANSWERTreaties must be approved by the Senate, whereas a free trade agreement must pass both houses of Congress. Treaties must be approved by the Senate, whereas a free trade agreement must pass both houses of Congress. - ANSWERTariffs An airplane manufacturer outsources the manufacture of some its parts and sub-assemblies. They are then returned to the manufacturer's main plant for final assembly. - ANSWERValue chain Country A exports more goods to Country B than it imports from Country B. Country A receives more monetary gain by using this practice. Which relationship does Country A have with Country B? - ANSWERTrade surplus Country A has been criticized by other countries for giving generous tax credits to its corn farmers, which in turn, enables the country's farmers to sell corn on the international markets cheaper than all other countries. Which term is used by other countries to describe this practice? - ANSWERGovernment subsidies A farmer knows that it takes 100 hours of labor to produce 100 bushels of corn. It only takes 50 hours of labor to produce 100 bushels of soy. Currently, a bushel of corn is selling at three times a bushel of soy. Which type of cost should the farmer use to determine what to plant? - ANSWEROpportunity A country produces goods more efficiently than all other countries in the same industry. Which type of advantage does this country have? - ANSWERAbsolute Country A exports farming equipment to Country B, while Country B exports car manufacturing equipment to Country A. Both countries are highly developed and could develop these industries separately but instead made the decision to export and import these products from each other. Which unique condition caused this practice between the two countries? - ANSWERSkill specialization A company produces the same product over and over, and it has caused the manufacturing cost of the product to become cheaper and more competitive in international markets than similar products in the industry. Which approach is this company using to achieve this ability? - ANSWEREconomies of scale A country with a new economy implemented trade protectionism in relation to countries with more developed economies. Why did the country take this action? - ANSWERTo restrict international economic trade How do anti dumping laws protect a domestic market? - ANSWERThey prevent foreign companies from selling goods and services at or below cost. How do Congress and the Department of Agriculture use quotas to their advantage? - ANSWERTo increase domestic prices to specific levels to make products profitable Which strategy should a government use to offset the cost of manufacturing domestically? - ANSWERSubsidies Which type of globalization refers to the international movement of goods, capital, and services? - ANSWEREconomic The CEO of an international company reminds the executive vice presidents that while the company may do good while performing corporate social responsibilities, the business has one ultimate goal since it is engaged in commercial activities with corporate shareholders. Which ultimate goal is the CEO emphasizing to the executive vice presidents? - ANSWERProfitability A CEO decides to expand the company's business internationally by purchasing production capability in another country, including the foreign country's buildings and equipment. Which type of market entry is the CEO using? - ANSWERDirect investment A CEO seeks to better use the economies of scale and scope of production to increase the international company's profits. Which type of globalization driver is the CEO seeking to use? - ANSWERCost A CEO is discussing an expansion of production of a company's highly perishable dairy line in a country that can offer low labor costs and good internet connections. The country has no highways, and roads are poorly maintained. Which challenge to international business expansion do the road conditions present? - ANSWERInfrastructure Which argument is used by critics who wish to discourage movement towards globalization? - ANSWERIt increases the wealth of the rich rather than the poor Anarchism - ANSWERIndividuals control political activities, and the government has no control over these activities Totalitarianism - ANSWERA centralized government creates oppressive policies based on ideas from powerful leadership. Direct democracy - ANSWERThe government provides a method of voting for the people of a country, not for elected officials. What is a free trade zone? - ANSWERA geographic region in which a county will reduce restrictions that might prevent or reduce trade Which term describes a government giving a tax break to a producer to increase their global competitiveness? - ANSWERSubsidies Industrialized - ANSWERPrevalent formation of new markets with possibility of saturation Less-developed - ANSWERFocus on agriculture and raw materials with limited imports Developing country - ANSWERGrowing population which leads to long-term growth potential. Which type of economy is decentralized and allows firms and households to participate in global trade with minimum governmental interference? - ANSWERMarket What type of economy is centered on families or tribes where little to no global trade is practiced? - ANSWERTraditional Socialism - ANSWERa system in which the government owns and operates a country's means of production Capitalism - ANSWERA system in which the means of production is controlled by private owners who can choose to participate in global trade. Communism - ANSWERA system in which all property is publicly owned and the government controls global trade. Which type of law system is based on a code and focuses on how the law is applied to the facts? - ANSWERCivil Which law is based on tradition and precedent given that judicial rulings can stand as precedents for future cases? - ANSWERCommon Which law system can vary from community to community and is found in countries without strong formal justice systems? - ANSWERCustomary In which law system does a judge decide the applicable law for the case as a jury determines the facts? - ANSWERCommon Which activity of the International Monetary Fund (IMF) impacts policy making? - ANSWERBeing owned and directed by the governments of the member nations What is a characteristic of the International Monetary Fund (IMF)? - ANSWERThe IMF is a cooperative institution and provides more effective currency exchange. What was the initial purpose of the International Monetary Fund (IMF) in phase one, prior to 1973? - ANSWERRegulated currency exchange between nations