Question 6(20 points)

Smith, Inc. (a U.S. entity based in Boston) formed an entity under the laws of Germany called Smith GmbH.Smith, Inc. was the sole owner of Smith GmbH.Smith GmbH manufactured watches in Germany and sold those watches exclusively in Germany.Which of the following best describes the form of foreign direct investment which Smith, Inc. is using to exploit the German market? (20 pts)

Question 6 options:

foreign branch

foreign subsidiary

joint venture

trade

Question 7(10 points)

Once a group of nations has negotiated a convention, other nations cannot adopt the treaty.

Question 7 options:

TrueFalse

Question 8(10 points)

Of the following, the most precise definition of a "free trade area" is:

Question 8 options:

Two countries that have a common external tariff.

A geographic area between two countries where there is a common currency.

A group of two or more countries in which import duties and other trade barriers are reduced or eliminated.

A geographic area between two countries where individual rights are respected.

Question 9(10 points)

A self-executing treaty is one that automatically creates rights that are enforceable in the courts of a contracting nation, without any further legislative action.

Question 9 options:

TrueFalse

Question 10(10 points)

Of the following, the most precise definition of a "customs union" is:

Question 10 options:

A labor union of customs officials interested in reducing tariffs and stimulating trade .

A free trade area with a common external tariff.

A free trade area with no tariffs between the member nations.

A union of nations that promotes free travel between members for purposes of international trade.