GLO BUS CHAPTER 7 EXAM
QUESTIONS & VERIFIED CORRECT
ANSWERS
absolute advantage - Correct Answer ✔✔ the ability to produce a good using fewer
inputs than another producer
balance of trade - Correct Answer ✔✔ the difference between a country's total exports
and total imports
comparative advantage - Correct Answer ✔✔ the ability to produce a good at a lower
opportunity cost than another producer
contract manufacturing - Correct Answer ✔✔ private label manufacturing by a foreign
company
exports - Correct Answer ✔✔ goods sold to other countries
foreign direct investment - Correct Answer ✔✔ a capital investment that is owned and
operated by a foreign entity
foreign subsidiary - Correct Answer ✔✔ a company owned in a foreign country by
another company, called the parent company
international franchise - Correct Answer ✔✔ agreement in which a domestic company
(franchiser) gives a foreign company (franchisee) the right to use its brand and sell its
products.
international joint ventures - Correct Answer ✔✔ a partnership of two or more
participating companies that have joined forces to create a separate legal entity
international strategic alliance - Correct Answer ✔✔ an organizational relationship that
allows companies in different countries to pool resources and share risks as they enter
new markets
liscensing - Correct Answer ✔✔ an owner's authorization or permission for another
entity to be trademarked, copyrighted, etc.
multinational corporation - Correct Answer ✔✔ an organization that manufactures and
markets products in many different countries and has multinational stock ownership and
multinational management
QUESTIONS & VERIFIED CORRECT
ANSWERS
absolute advantage - Correct Answer ✔✔ the ability to produce a good using fewer
inputs than another producer
balance of trade - Correct Answer ✔✔ the difference between a country's total exports
and total imports
comparative advantage - Correct Answer ✔✔ the ability to produce a good at a lower
opportunity cost than another producer
contract manufacturing - Correct Answer ✔✔ private label manufacturing by a foreign
company
exports - Correct Answer ✔✔ goods sold to other countries
foreign direct investment - Correct Answer ✔✔ a capital investment that is owned and
operated by a foreign entity
foreign subsidiary - Correct Answer ✔✔ a company owned in a foreign country by
another company, called the parent company
international franchise - Correct Answer ✔✔ agreement in which a domestic company
(franchiser) gives a foreign company (franchisee) the right to use its brand and sell its
products.
international joint ventures - Correct Answer ✔✔ a partnership of two or more
participating companies that have joined forces to create a separate legal entity
international strategic alliance - Correct Answer ✔✔ an organizational relationship that
allows companies in different countries to pool resources and share risks as they enter
new markets
liscensing - Correct Answer ✔✔ an owner's authorization or permission for another
entity to be trademarked, copyrighted, etc.
multinational corporation - Correct Answer ✔✔ an organization that manufactures and
markets products in many different countries and has multinational stock ownership and
multinational management
