Full Download International Marketing 16th Edition Cateora Solutions Manual
Full Download International Marketing 16th Edition Cateora Solutions Manual
Full Download International Marketing 16th Edition Cateora Solutions Manual
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Teaching Objectives
This chapter has a short history of international trade. Included is a history of GATT and the role of
multinationals from the end of World War II through the decade of the nineties and beyond.
The aim of this chapter is to provide a brief overview of the international trade issues that constitute the
environment of global business. Issues reflecting the political and economic trade policies that affect how
international business is conducted. The teaching objectives are to:
1. Provide some insight into the balance of payments and the relationship of a country’s current
account and balance of trade.
2. Show the U.S. government’s role in helping to ease restrictions on trade through the Omnibus
Trade and Competitiveness Act.
3. Explore the provisions and effects of protectionism on world trade and to show that no country,
including the United States, has “clean hands” when it comes to protecting home markets.
5. Explore how GATT and the new World Trade Organization are designed to eliminate trade
restrictions and provide a means for countries to settle trade disputes.
2. Besides the discussion of the concept of protectionism and different trade barriers, a class discussion
on how markets are protected can be interesting. On the one hand the United States alleges to be for
free trade, yet it ignores the WTO in its trade dispute with Japan over opening its markets for U.S.
automobile parts. The U.S. also has trade barriers. See, for example, Crossing Borders 2–1.
Lecture Outline
GLOBAL BUSINESS ENVIRONMENT
2-1
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distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, di stributed, or posted on a website, in
whole or part.
Discussion Questions
1. Define:
GATT Protectionism
Balance of payments IMF
Nontariff barriers
Current Account Voluntary export restraint (VER)
Tariff WTO
America’s involvement in the global economy has passed through two distinct periods: a
development era during which the United States sought industrial self-sufficiency in the eighteenth
and nineteenth centuries, and a free-trade in the early and middle twentieth century during which
open trade was linked with prosperity. Now America has entered a third, more dangerous era—an age
of global economic interdependence.
With surprising swiftness, the United States has shifted from relative economic self-sufficiency to
global interdependence. In 1960, trade accounted for only 10 percent of the country’s GNP; by the
mid-1980s, that figure had more than doubled. American farmers now sell 30 percent of their grain
production overseas; 40 percent of U.S. farmland is devoted to crops for export. In fact, more U.S.
farmland is used to feed the Japanese than there is Japanese farmland. American industry exports
more than 20 percent of its manufacturing output, and one out of every six manufacturing jobs in the
U.S. depends on foreign sales. More than 70 percent of American industry now faces stiff foreign
competition within the U.S. market.
2-2
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, di stributed, or posted on a website, in
whole or part.
Chapter 02 - The Dynamic Environment of International Trade
3. Differentiate among the current account, balance of trade, and balance of payments.
BALANCE OF PAYMENTS
When countries trade, financial transactions among businesses/consumers of different nations occur.
Products and services are exported and imported, monetary gifts are exchanged, investments are
made, cash payments are made and cash receipts received, and vacation and foreign travel occurs. In
short, over a period of time, there is a constant flow of money into and out of a country. The system
of accounts that records a nation’s international financial transactions is called its balance of
payments.
A balance-of-payments statement includes three accounts: the current account, a record of all
merchandise exports, imports, and services plus unilateral transfers of funds, the capital account, a
record of direct investment, portfolio investment, and short-term capital movements to and from
countries; and the official reserves account, records of exports and imports of gold, increases or
decreases in foreign exchange, and increases or decreases in liabilities to foreign central banks. Of the
three, the current account is of primary interest to international business.
CURRENT ACCOUNT
The current account is important because it includes all international trade and service accounts, i.e.,
accounts for the value of all merchandise and services imported and exported and all receipts and
payment from investments.
BALANCE OF TRADE
The relationship between merchandise imports and exports is referred to as the balance of merchandise
trade or trade balance. If a country exports more goods than it imports, it is said to have a favorable
balance of trade; if it imports more goods than it exports, as did the United States, it is said to have an
unfavorable balance of trade. Usually a country that has a negative balance of trade also has a negative
balance of payments. Both the balance of trade and the balance of payments do not have to be negative;
at times a country may have a favorable balance of trade and a negative balance of payments or vice
versa. This was the case for the United States during the Korean and Vietnam Wars when there was a
favorable balance of trade but a negative balance of payments. The imbalance was caused by heavy
foreign aid assistance by the United States to other countries and the high cost of conducting the Korean
and Vietnam Wars.
In only three years since 1970 has the United States had a favorable balance of trade. This means that
for each year there was an unfavorable balance, the United States imported goods with a higher dollar
value than the goods it exported. These imbalances resulted primarily from heavy U.S. demand for
foreign petroleum, foreign cars, industrial machinery, and other merchandise. Such imbalances have
drastic effects on balance of trade, balance of payments, and therefore, the value of local currency in the
world marketplace.
4. Explain the role of price as a free market regulator.
As a free market regulator, price serves as a primary variable in regulating supply and demand and
aids in resource allocation. Prices that are too low deplete product supply, and prices that are too high
stop consumer purchases.
2-3
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"What are these called?" touching the tiny seed-leaves.
"Cotyledons!" answered Ella promptly, the others coming in more slowly upon
the same word.
"And this?" pointing to the slender stem bearing the cotyledons at the top.
"The radicle."
"And what do we call the whole as it lies coiled up in the nut before it is
planted?"
"The embryo!"
CHAPTER II.
LAYING THE FOUNDATION.
"I wonder which mamma will tell us about this morning," said Ella as she and
Tom skipped across the meadow, leaving Mrs. Browne to follow more leisurely
with Bennie.
"The root, of course," said Tom; "the root is—well, it is the root of the whole
thing. The foundation, you know."
"I hate foundations; that is what Miss Lyman is always saying, 'Young ladies,
lay the foundation well!' I thought we would get away from all that in vacation,"
and she laughed merrily.
"Well, there can't be a great deal to be said about roots, I am sure," returned
Tom; "that'll comfort you, I suppose."
"I think we will talk about roots to-day." Tom and Ella exchanged glances at
this, but Mrs. Browne continued, "the root has two uses; it serves to fix and
hold the plant firmly in the ground, and also it is the part of the plant that takes
up food from the soil. The plant needs to be fed with certain minerals and
gases, and these are dissolved in the moisture of the soil, and the water is
sucked up by the roots."
FLESHY ROOT.
"I do not understand," said Ella, "how the root can suck up water! Are there
holes in the root which stand for mouths?"
"The roots are covered with what we call fibrils or root hairs, and these are
very delicate, and through their surfaces they take in the moisture. Now if you
will examine this root of a young tree which Tom has pulled up for our lesson
you will see that the root has branched, and every year the branches multiply
and spread farther and deeper into the ground. Now notice that the branches
grow smaller and smaller. Look through this microscope and you will see the
tiny hair-like projections; these take up the moisture, and as there are so many
of them upon every little rootlet, they take up a great deal. We call this a
branching root; some roots are what we call fibrous. Tom, suppose you see if
you can find a buttercup root and bring it here."
FIBROUS ROOT.
Tom sprang to do his mother's bidding, and soon returned with what looked
like a hank of thread—long fibres bound together at the surface of the ground,
at the top of what we call the axis of the plant. Mrs. Brown explained that the
central stem is called the axis, and that the part which goes downward is the
descending axis, and the part that shoots upward and bears the branches, is
the ascending axis.
"You observe," she said, "that in the case of this plant there is no descending
axis, the long fibrous roots spring from the collum or collar, which is the place
where the root and stem join, or from the line of division between the
ascending and descending axis. The fibrous roots are mainly for the purpose
of absorbing nourishment for the immediate use of the plant, and this structure
gives them greater surface by which to take up the moisture for rapid growth.
Other roots serve an additional purpose. They store up food for the future
growth of the plant, and such roots are called fleshy roots, and many of them
are useful to us for food. In such the axis is long and thick and with only short
branches and of course fewer fibrils."
"Now if we leave one of these fleshy roots—for instance the beet—in the
ground through the winter instead of storing it in the cellar for table use, when
spring comes the plant will begin to put forth a new growth, much more
vigorous than that of the first year, and quite different. It will send up strong
shoots bearing flowers and ripening seed. And all this will use up the food
stored in the root, and when the seed has ripened the plant will die. This we
call a biennial plant."
"The fibrous roots belong largely to annual plants, while the branching roots
belong principally to the woody plants, as trees and shrubs. I heard Tom
talking about transplanting trees. You should take great care not to injure the
small roots and fibrils, for, by breaking or cutting off these, you lessen the
absorbing power of the root."
"You spoke of annuals and another kind—those which live two years," began
Ella.
"Biennials; be sure you get the names; it is just as well to learn a thing
thoroughly in the beginning—a few facts, names or dates thoroughly fastened
upon the memory are better than a vague idea of a whole subject, without any
definite knowledge. We classify plants as annuals, biennials and perennials;
those which live one year, those which die after perfecting the seed the
second year, and those which live on year after year."
"I could tell you a great deal about roots, but I suppose you want to get to
leaves and flowers, so we will drop the subject of roots and take up the stem
next time," said Mrs. Browne, smiling upon her impatient little girl.
CHAPTER III.
MORE ABOUT LEAVES.
"WHO wants to study in vacation?"
The speaker was Mr. Browne's nephew; he sat upon a stump in the woods not
far from the pretty booth where Mrs. Browne awaited the coming of her class.
He kicked his heels against the half-decayed bark which, giving way under the
repeated kicks and falling to the ground, was picked up by the youngest of the
trio of Brownes and stored away for the gypsy fire which he proposed to build
after a while.
"And botany too! I don't care a flip about that stuff; I wanted to go fishing; it's
lots more fun."
"But we can't fish all the time; and mother makes botany real interesting. The
other day we had to talk about roots, because that comes first, and we
thought it would be terribly stupid; but it wasn't! We liked it first-rate, and we
know quite a number of things now about roots, so come on, Charlie."
"Bother!" Charlie very slowly descended from his perch, and followed the
others with a scowl on his rather handsome face. Mrs. Browne welcomed him
with a smile, not appearing to notice his surly mood.
"We will talk a little about leaves to-day," she said. "There are two principal
sorts of leaves; now I want you to look at these which I have brought and see
if you can find out the difference between them." She handed the children
some leaves of the lily of the valley and the tulip, with others from a maple tree
near by.
"Try again."
"The maple leaf is divided off by three little ridges spreading apart from the
stem," said Ella.
"Ah! now you are coming at it. The two great divisions of leaves of which I just
spoke are characterized by these threads, or, as we call them, veins. The
maple belongs to the netted-veined leaves, and the others to the parallel-
veined. You remember that at our first talk we learned about seed-leaves?
Can any of you tell what we called the seed-leaves?"
"Right. Well, the parallel-veined leaves belong to the sort of plants which have
only one seed-leaf or cotyledon, and we call them monocotyledonous plants;
and the netted-veined leaves belong to and distinguish those with two
cotyledons, and are called dicotyledonous plants. Now notice that a leaf has
three parts: a blade, the broad thin part, a petiole, or, as you would call it, the
stem-stalk, which supports it; and, as you see in these quince leaves, there is
also a pair of small leaf-like appendages which are called stipules. All leaves
do not have these, and some have no petioles. In such cases we say the leaf
is sessile, and sessile means sitting; and we shall find the word used in regard
to other parts of the plant as we go on in our study. This quince, and also the
apple leaf, have one large vein running through the middle as if the petiole
were extended to the tip or apex of the leaf. This sends off branches, and
these in turn break into smaller ones until the leaf is all over network. It is tilled
in with a green pulp and covered with a thin skin called the epidermis."
"Why, we had that word in physiology," exclaimed one of the listeners. "It
means the same as cuticle or outside skin."
"Exactly; so you see we have in the blade the fibrous framework or skeleton,
the pulpy filling, and the transparent covering."
Charlie had been listlessly fingering a leaf, seemingly not interested in the
talk, but at this moment he started up, exclaiming, "I know how to make
skeleton leaves! You just put the leaf into some kind of acid—I have forgotten
the name, that eats out the pulp and leaves the framework—sister Anna has a
whole lot of them."
"Yes; and if we had one here we could see the method of veining very plainly.
In the parallel-veined leaves all the larger ribs run lengthwise, and there are
no branching veins which you can see plainly, only very small vein-lets. Now
just a glance at the leaves of a plant or tree will tell you to which of two great
divisions the plant or tree belongs."
"I did not suppose there could be so much to say about leaves," said Ella,
turning her leaf over and looking curiously at it.
Mrs. Browne smiled. "We have only just begun to examine them. We might
find things enough about them to fill a great many morning hours. We might
talk about the shapes. We have: ovate and lanceolate, oblong and orbicular
and a great many more you might find it hard to remember. Then the margins.
Some are entire, that is, even, not notched, and others—but look for
yourselves and find out the differences."
"This willow is notched, and so is the elm leaf," said Charley, growing
interested.
"You will find many forms if you take notice, and each has a name."
"You must try to find out all you can about them. Notice the arrangement upon
the stem. Some are opposite, like the maple, others like the rose are alternate;
now here is a pansy—excuse me for picking to pieces this pretty bouquet
which you gave me, but it is in the interest of Science. The pansy or violet has
alternate leaves with stipules, while the sweet pea has a compound leaf; but I
know you are anxious to get to flowers, and we will take them up next time,
only we ought to talk a little about the uses of leaves. You may find as many
uses as you can before we come here for another talk."
"Didn't you like it?" asked one of the Brownes as they stopped on the way
home to enjoy the top rail of the fence.
"It wasn't so bad as I thought it would be," replied Charlie. "I never should
have suspected that there was so much talk to be made over a leaf."
MRS. BROWNE and Ella were sitting upon the porch which ran along the front
of their country home. They were waiting for the boys to come to the botany
study. Mrs. Browne had decided to have her class at home, thinking that the
heavy rain of the evening before must have made it very damp in the woods.
Tom had gone to the office, and Ben—well, Ben was somewhere. That is what
they always said of Ben, "Oh! He is somewhere."
"Mamma," said Ella in a whisper, "do look! There is the old man coming up the
walk."
Mrs. Browne arose, and stepping forward waited. Evidently the man coming
towards her was blind. He was led by a large dog, and was talking either to
himself or to the dog.
"Yes, I'm sure of it; I should know the odor anywhere; it is wild roses; Ned, my
dog, we must find them."
"Pardon," said the stranger; "I did not know any one was here. Perhaps I am
intruding? The perfume of wild roses carried me back to my early home, and it
seemed as if I must be standing under my mother's window, and Ned and I
thought we would find the roses."
POPPY-HEAD.
"Ella," said Mrs. Browne, "get the scissors and cut some roses for the
gentleman."
When the flowers were brought the stranger handled them tenderly.
"You wonder I should care, when I cannot see," he said; "but every leaf and
petal is pictured in memory. I know the shade of green of the calyx; the
delicate tint of the petals, the beauty of the half-open buds as well as if I could
see. Thank you, madam, thank you!"
"Will you sit down and rest?" said Mrs. Browne kindly.
"No, thank you; I want to reach my journey's end at the next town this
morning. My faithful Ned and I will jog on. Good-morning!"
PINK.
"Mamma," said Ella, "can we study about the flowers themselves this
morning? That blind man talked about things that I did not understand at all.
I'm tired of leaves and roots and things."
"I do not know as we will study at all this morning," replied Mrs. Browne. "The
boys are slow about getting here."
"There comes Ben, and I hear Tom whistling around the corner," and in a
moment more the boys appeared and settled themselves for the talk.
Tom had brought a bunch of pinks, and Ben had some poppies which a
neighbor had given him, while Ella held a spray of the wild roses.
"And so you want to talk about the flowers themselves?" said Mrs. Browne.
"Well, if you will look, each of you, at the flowers you have you will find them
made up of several parts. Tom, what do you find?"
Tom busied himself for a moment pulling apart a pink blossom, then replied, "I
find this outside green part, and then there are the leaves of the flower and
little slender thread-like things in the centre."
"The leaves of the flower, as you call them, are called the corolla; and the
green envelope, which in your flower is shaped like a cup, is the calyx, while
the slender parts in the centre are the stamens. And the one exactly in the
middle is the pistil. Sometimes there are more pistils than one. Each division
of the calyx is called a sepal, and each division of the corolla is a petal. Now
you have quite a number of new names to-day to remember. What is the
outside envelope?"
"Calyx," said Ella promptly, the boys chiming in a little behind time.
"The whole is the corolla, and the parts or divisions are petals."
"Correct."
"But, mamma!" exclaimed Bennie, "my flower has no green part on the
outside. Do not all flowers have a calyx?"
"Some do not; but in the case of the poppy, the calyx falls off as the corolla
expands. Notice the bud which you have, the calyx is just ready to fall off."
"I see," said Bennie, and the rest examined the bud which he passed around.
"Now notice that in the pink the sepals are united in one piece, forming a cup,
while the petals are separate. Some flowers have united petals. Those we call
monopetalous, and those like the pink we call polypetalous. The sepals, calyx
and corolla taken together, are sometimes called the perianth. I do not
remember if I told you that the root, stem and leaves are the organs of
vegetation while the flower, fruit and seed are the organs of reproduction. Now
the calyx and corolla are only the protecting parts, while the essential organs
are the stamens and pistils. If you can remember all this, with all the new
names, you will do well for to-day, and next time we will talk about the
stamens and pistils. Just one thing more, you notice that as you pull out one
of the petals of the pink there is a long, narrow part running down into the
deep cup. We call that the claw of the petal. Now see if you can find all these
organs in other flowers, and give them their names."
SWEET-BRIER.
And leaving the children to busy themselves Mrs. Browne resumed her
sewing, though she sat near and now and then joined in the talk which
followed.
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