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International Marketing - Ch 2

Terms in this set (101)

Worker exploitation and domestic job losses is an adverse consequence of _______
Globalization
The _______ of the balance-of-payments statement is most likely to record all merchandise exports, imports, and services plus unilateral transfers of funds.
Current account
Acronym that refers to the international forum that was created for member countries to engage in the negotiation of tariffs and other barriers to trade
GATT
GATT
General Agreement of Tariffs and Trade
Created an agency to serve as watchdog over world trade
GATT
This type of non-tariff barriers strictly fall under the category of specific limitations on trade.
Emgargoes
______ is an important economic activity.
World Trade
As competition intensifies, the tendency toward _____ gains momentum
Protectionsim
The creation of the ______ is one of the biggest victories for free trade in decades.
World Trade Organization (WTO)
Two multinational agreements designed to advance freed trade are:
1 - WTO
2 - GATT
Administrative fees are an example of a ______ barrier?
Nontariff Trade
After World War II, the United States set out to infuse the ideal of capitalism throughout as much of the world as possible. The _____, aimed at assisting in rebuilding Europe, is the plan most closely associated with this endeavor
Marshall Plan
An agreement signed willingly between the importing country and the exporting country fora restriction on the volume of exports is called a:
Voluntary export restraint
What is the most popular way to circumvent WTO guidelines and impose new duties?
Anti-dumpting duties
The _____ account of the balance-of-payments statement is most likely to record all exports and imports of gold, increases or decreases in foreign exchange, and increases or decreases in liabilities to foreign central banks.
Reverse
Post World War II, it was noticed that there was worldwide economic growth and countries once classified as less developed were reclassified as _____.
Newly industrialized countries
When the United States refuses to sell goods to Iran because of the perception that the country harbors radicals and terrorists, the refusal is most accurately referred to as a(n):
Embargo
What organization emerged as a successor to the GATT following the Uruguay Round of GATT negotiations?
World Trade Organization
A balance-of-payments statement includes three accounts. Two of those accounts are the current account and the capital account. What is the third account found on the balance-of-payments statement?
Reserves Account
As an outcome of the Uruguay Round of intergovernmental tariff negotiations on the GATT platform, the first multilateral, legally enforceable agreement covering trade and investment in the services sector was formulated, termed the _____.
General Agreement on Trade in Services (GATS)
GATS
General Agreement on Trade in Services
The rapid growth of war-torn economies and previously underdeveloped countries, coupled with large-scale economic cooperation and assistance that followed World War II led to:
The rise of new global marketing opportunities
Exporting countries primarily agree to voluntary export restraints (VERs) to:
avoid the charges of stiffer quotas and tariffs
Another term for IMF special drawing rights (SDRs) is:
Paper gold
_____ is ideally accomplished when a country refuses to allow an importer to exchange its national currency for the seller's currentcy
Blockage
_____ and the World Bank Group are two global institutions created primarily to assist nations in becoming and remaining economically viable.
The Internationals Monetary Fund
One of the basic elements of the General Agreement on Tariffs and Trade (GATT) is that:
Trade shall be conducted on a nondiscriminatory basis
27. Randall Smithe-Jones believes that protectionism is the only way to save the United Kingdom from outside competitors. He has seen small businesses go bankrupt because cheaper foreign goods have been more popular. The cell-phone manufacturing industry has just started in U.K and Smithe-Jones' company is one of the first to try its hand at cell-phone manufacturing. what would probably be the argument that Smithe-Jones would use to persuade his government representatives that protectionism is still needed in the U.K.?
Protection of an infant industry
Which section of the Omnibus Trade and Competitiveness Act recognizes that foreign penetration of U.S. markets can cause serious competitive pressure, loss of market share, and, occasionally, severe financial harm?
The import relief section
What trading partners of the U.S. became its topmost "trad problem" at the beginning of the 21st century?
China
In general, tariffs weaken
Balance-of payments positions
_____ is a new non-tariff barrier that was designed to prevent foreign producers from using predatory pricing.
Anti-dumpting Law
Tall Pine Plywood Company has just received a notice that a shipment of plywood (2 metric tons) has been rejected by Japanese customs because the knotholes commonly found on a plywood sheet are too large. Which category of non-tariff barriers primarily checks such quality issues?
Standards
Which trade policy tool makes it mandatory for importers who want to buy a foreign good to apply for an exchange permit?
Government approval
Was designed to primarily deal with trade deficits, protectionism, and the overall fairness of the U.S. trading partners?
The Omnibus Trade and Competitiveness Act of 1988
In addition to U.S. economic assistance, a move toward international cooperation among trading nations was manifest in the negotiation of the ______
General Agreement on Tariffs and Trade (GATT)
Raised average U.S. tariffs on more than 20,000 imported goods to levels in excess of 60 percent
Smoot-Hawley Act - 1930
A forum for member countries to negotiate a reduction of tariffs and other barriers to trade.
General Agreement on Tariffs and Trade (GATT)
MNCs
Multinational Corporations
Book published in 1968, by French author J.J. Servan-Schreiber
The American Challenge
NICs
Newly Industrialized Countries
SOEs
State-Owned Enterprises
From 1983 to 1987, almost ____ percent of the merchandise trade deficit was in capital goods and automobiles
70
AFTA
American Free Trade Area
APEC
Asia-Pacific Economic Cooperation Conference
OECD
Organization for Economic Cooperation and Development
When _________, financial transactions among businesses or consumers of different nations occur.
Countries Trade
The system of accounts that records a nation's international financial transactions is called ______
Balance of Payments
A nation's ________ records all financial transactions between its residents and those of the rest of the world during a given period of time - usually one year.
Balance of Payments
Because the ______ record is maintained on a double entry bookkeeping system, it must always be in balance
Balance of Payments
On an individual company's _______, the assets and liabilities or the credits and debits must offset each other.
Financial statement
A ________ is a record of condition, not a determinant of condition. Each of the nation's financial transactions with other countries is reflected in its _________
Balance of Payments.
The three accounts that a balance of payments statement includes are:
Current Account
Reserves Account
Capital Account
A record of all merchandise exports, imports, and services puls unilateral transfers of funds
Current Account
A record of direct investment, portfolio investment, and short-term capital movements to and from countries
Capital Account
A record of exports and imports of gold, increases or decreases in foreign exchange, and increases or decreases in liabilities to foreign central banks
Reserves Account
of the three accounts, current, capital, and reserves, the _______ is the primary interest to international business.
Current Account
The ______ account is important because it includes all international merchandise trade and service accounts, that is, accounts for the value of all merchandise and services imported and exported an all receipts and payments from investments and overseas employment.
Current Account
Since ______ the United States has had a favorable current account balance
1971
When foreign currencies can be traded for more dollars, U.S. products and companies are _________ for the foreign customer and exports increase, and foreign products are more expensive for the U.S. customer and the demand for imported goods is dampened.
less expensive
The use by nations of legal barriers, exchange barriers, and psychological barriers to restrain entry of goods from other countries.
Protectionism
To encourage development of domestic industry and protect existing industry, governments may establish such barriers to trade as tariffs and a variety of ________ including quotas, boycotts, monetary barriers, and market barriers
Non-tariff barriers
Barriers are imposed against _______ and against _______
Imports & Foreign Businesses
A tax imposed by a government on goods entering at its borders.
Tariff
_____ may be used as revenue-generating taxes or to discourage the importation of goods, or for both reasons
Tariffs
_____ rates are based on value or quantity or a combination of both.
Tariff
In general, tariffs:
Increase - inflationary pressures, special interests' privileges, government control and political considerations in economic matters, the number of tariffs.

Weaken - Balance of payments positions, supply and demand patterns, international relations.

Restrict - Manufactures' supply sources, choices available to consumers, competition.
Tariffs are ______ , are _______ , and require constant administration and supervision.
Arbitrary & Discriminatory
_____ are often used against protectionist move of trading parnters
Tariffs
A specific unit or dollar limit applied to a particular type of good.
Quota
Like tariffs, _____ tend to increase prices
Quotas
As a means of regulating the flow of exchange and the quantity of a particular imported commodity, countries often require _________
Import Licenses
The fundamental difference between ______ and ______ as a means of controlling imports is the greater flexibility.
Quotas & Import Licenses
Quotas permit importing until the quota is _____; licensing limits quantities on a _______ basis.
Filled , Case-by-case
An agreement between the importing country and the exporting country for a restriction on the volume of exports.
Voluntary export restraints (VERs)
Voluntary Export Restraints (VERs) are also known as:
Orderly Market Agreements (OMAs)
A VER is called voluntary because:
The exporting country sets the limits; however, it is generally imposed under the threat of stiffer quotas and tariffs being set by the importing country if a VER is not established.
A government _____ is an absolute restriction against the purchase and importation of certain goods and/or services from other countries.
Boycott
A refusal to sell to a specific country
Embargo
A public boycott can be either ______ or ______ and may be government sponsored or sponsored by an industyr
Formal or informal
a government can effectively regulate its international trade position by various forms of ________
Exchange control restrictions
_____ is used as a political weapon or as a response to difficult balance-of payments situations.
Blocked currecny
______ to secure foreign exchange is often used by countries experiencing server shortages of foreign exchange.
Government approval
Non-tariff barriers of this category include ______ to protect health, safety, and product quality.
Standards.
Different ______ are on of the major disagreements between the United States and japan.
Standards
The _______ addressed the trade fairness issue and focused on ways to improve U.S. competitveness
The Omnibus Trade and Competitiveness Act of 1988
The Omnibus Trade and Competitiveness Act of 1988 covers three areas considered critical in improving U.S. trade.
Market Access
Export Expansion
Import Relief
The issue of the openness of markets for U.S. goods is addressed as:
Market Access
The act gives the U.S. president authority to restrict sales of a country's products in the U.S. market if that country imposes unfair restrictions on U.S. products. Furthermore, if a foreign government's procurement rules discriminate against U.S. firms, the U.S. president has the authority to impose a similar ban on U.S. government procurement of goods and services for the offending nations.
The Omnibus Trade and Competitiveness Act of 1988
Two major contributors facilitation export trade were _______ to file for and track export license requests and the creation of the _______ to improve access to trade data.
Computer-based procedures , National Trade Data Bank (NTDB)
NTDB
National Trade Data Bank
The General Agreement on Tariffs and Trade covers which basic elements
1 - Trade shall be conducted on a nondiscriminatory basis
2 - Protection shall be afforded domestic industries through customers tariffs not through such commercial measures as import quotas.
3 - Consultation shall be the primary method used to solve global trade problems.
Since GATT's inception, _______ "rounds" of intergovernmental tariff negotiations have been held.
8
The fist multilateral, legally enforceable agreement covering trade and investment in the services sector. It provides a legal basis for future negotiations aimed at eliminating barriers that discriminate against foreign services and deny them market access.
The General Agreement on Trade in Services (GATS)
Established the basic principle that investment restrictions can be major trade barriers and therefore are included, for the first time, under GATT procedures.
Trade Related Investment Measures (TRIMs)
Established substantially higher standards of protection for a full range of intellectual property rights (patents, copyrights, trademarks, trade secrets, industrial designs, and semiconductor chip mask works) than are embodied in current international agreements, and it provides for the effective enforcement of those standards both internally and at the border.
Trade-Related Aspects of Intellectual Property Rights (TRIPs)
The ________ and the World Bank Group are two global institutions created to assist nations in becoming and remaining economically viable.
International Monetary Fund (IMF)
Inadequate _________ and unstable ______ are particularly vexing problems in global trade.
Monetary reserves , Currencies
To cope with universally floating exchange rates, the IMF developed _______
Special Drawing Rights (SDRs)
Because both gold and the U.S. dollars have lost their utility as the basic medium of financial exchange, most monetary statistics relate to SDRs rather than dollars. The SDR is in effect _________ and represents an average base of value derived from the value of a group of major currencies.
Paper Gold
An institution that has as its goal the reduction of poverty and the improvement of living standards by promoting sustainable growth and investment in people.
World Bank Group
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