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MKTG 6th Edition Lamb Test Bank 1
MKTG 6th Edition Lamb Test Bank 1
TRUE/FALSE
1. Having a global vision means that management recognizes and reacts to international marketing
opportunities, uses effective marketing strategies, and is aware of threats from foreign competitors in
all markets.
ANS: F
Over the past two decades, global trade has climbed from $200 billion a year to $12.5 trillion in 2009.
3. About 85 percent of U.S. companies export their products to other countries on a regular basis.
ANS: F
About 85 percent of all U.S. exports of manufactured goods are shipped by 250 companies; less than
10 percent of all manufacturing businesses export their goods on a regular basis.
4. Multinational companies typically begin the development of their global business with direct
investment and continue using this strategy throughout the company’s life span.
ANS: F
Multinational companies often develop their global business in four stages. In the first stage,
companies operate in one country and sell to others.
5. Globalization deserves credit for helping lift many nations out of poverty and for improving standards
of living of low-wage families.
6. Global marketing standardization presumes that the markets throughout the world are becoming more
alike.
7. The same environmental factors that operate in the domestic market also exist internationally. These
factors (culture, economic, political structure and actions, demographic makeup, and natural resources)
should be examined regardless of the country.
8. In general, average family incomes are higher in more developed countries than in the less developed
countries.
9. While some countries have elements of both capitalism and socialism, most nations are at one political
extreme or the other.
ANS: F
Rarely will a political environment be at one extreme or the other. Rather, elements of many systems
are often present.
10. According to research done by the World Bank, countries with the greatest amount of business
regulation foster the strongest economies.
ANS: F
Those with the least amount of business regulation foster the strongest economies.
PTS: 1 REF: 69-70 OBJ: 05-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model International Perspective
MSC: BLOOMS Level II Comprehension
11. The U.S. government limits the amount of sugarcane that is imported into the country. This is an
example of a tariff.
ANS: F
This is an example of a quota—a limit on the amount of a specific product that can enter a country.
12. The U.S. government prohibits the importation of Havana cigars because of political differences with
Cuba. This is an example of a boycott.
13. The Uruguay Round of trade negotiations dramatically increased trade barriers worldwide.
ANS: F
It lowered trade barriers.
14. NAFTA is the New American Foreign Trade Amendment, which allows for balanced trade with the
European Union.
ANS: F
NAFTA is the North American Free Trade Agreement, which creates a free trade zone among Canada,
the United States, and Mexico.
15. The European Union Commission and the courts have come under widespread criticism for “rubber-
stamping” or approving most business deals involving U.S. multinationals.
ANS: F
In fact, the European Union Commission and the courts have not always been kind to U.S.
multinationals.
16. The Group of Twenty is the largest free trade agreement in the world.
ANS: F
The Group of Twenty is a forum for international economic development that promotes discussion
between industrial and emerging-market countries on key issues in the global economy.
17. Even though it is not actively involved in global marketing, Hennessey Enterprises, a U.S.-based
business, agreed to sell two thousand of its stress-reducing products to a distribution company in
Norway. This would be an example of direct investment.
ANS: F
This is an example of exporting.
18. Licensing agreements reduce the risk for manufacturers and sometimes even remove the requirement
for a manufacturer to produce its own product.
ANS: F
It is called contract manufacturing.
20. U.S.-based Procter & Gamble and Italian-based Fater agreed to produce and market diapers for the
European market. This is an example of a joint franchise.
ANS: F
This is an example of a joint venture.
21. The form of global organization that provides the highest potential for return on investment as well as
the highest level of risk is contract manufacturing.
ANS: F
Direct foreign investment carries the highest risk level and the greatest potential return on investment.
22. Global marketing research is not any more difficult than domestic marketing research.
ANS: F
Global marketing research is conducted in vastly different environments and can be very difficult in
developing countries.
23. In the context of global marketing, product invention can be taken to mean either creating a new
product for a market or drastically changing an existing product.
24. If a country’s currency appreciates, more of that currency will be needed to buy another country’s
currency.
ANS: F
If a country’s currency appreciates, less of that currency is needed to buy another country’s currency.
25. The price of one country’s currency in terms of another country’s currency is called the conversion
price.
ANS: F
It is called the exchange rate.
26. Suppose a Chinese firm makes computer chips at $4.00 per chip but sells the chips for $2.00 in
American markets. American producers of computer chips cannot supply chips at the low rates that the
Chinese firm is supplying them. The Chinese firm is engaging in dumping.
27. The rules, regulations, and habits used for brick-and-mortar stores tend to restrain and limit the success
of those retailers engaged in e-commerce.
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