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CGBP EXAM
GUIDE/COMPREHENSIVE STUDY
GUIDE/ ACTUAL EXAM Questions
with Detailed Verified Answers
Question: Economic Integration - Government Trade Collaboration -
Answer: 5 levels (order important) - as each level builds on the levels listed
before):
Free Trade Area (FTA) - e.g. NAFTA. Allows free movement of goods
Customs Union - common external trade policy i.e. same duty rate amongst all
members
Common Market - Free movement of all factors of production i.e. free labor
movement
Economic Union - members utilize a common currency (Monetary
Union/Currency Union)
Political Union or Nation State - common foreign policy, army etc. i.e. UK,
USA
Question:Mercantilism
Answer: - trade based on one winning & other losing
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Question:Absolute Advantage
Answer: - trade for mutually beneficial advantages
Question:Comparative Advantage
Answer: - even when a country has an absolute advantage in multiple
products, it should still trade for the betterment of society.
Question:Export Success Requires:
Answer: Management commitment
In-depth experience with the product/service - the business must have a solid
product/service, and understand how they compete, and devise an effective
way to compete.
Adequate Cash Flow
Capacity & Capability to expand and get product to international markets.
Question:Export Success - business that is "export ready" and market where
opportunity exists.
Answer: Conditions NOT critical for Export Success - International experience
(that can be hired); foreign language ability (though it helps); travel to the
foreign market (though this also helps too).
Question:Reasons to Go Global
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Answer: Sales to other markets - 95% of worlds consumers live outside the
US; common customer demands/tastes; improved economies of scale
(operating & process efficiencies).
Diversification of customers & risk
Access to lower cost structures - labor, material costs, etc.
Global branding - aiding access to new markets, distributors, etc.
Worldwide distribution & manufacturing - this can become a strong
competitive barrier to entry.
Economies of scale and learning beyond the US
Global cash flow - strategic movement of cash/assets.
Question:Value of an International Business Plan:
Answer: Builds consensus - aids in company-wide commitment & support
Aids in communication/sharing
Help identify critical steps company must take
Identifies responsibilities
Provides a basis for evaluation & future improvement
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Question:Primary Data (research technique)
Answer: original research, commissioned by a company to answer specific
questions they have.
Question:Secondary Data - (research technique)
Answer: using existing data that someone else has already compiled.
Question:Qualitative Data - (research technique)
Answer: opinions
Question:Quantitative Data - (research technique)
Answer: numbers
Question:Proactive market selection strategy is recommended (vs. being
Reactive).
Answer:
Question:Foreign Market Entry Modes: (Rank order: Low control & feedback
to High; Low Risk to High)
Answer: Indirect (EMC's, Piggyback)
Direct (export only, no foreign direct investment)
Company sells product to overseas buyer, typically a distributor or agent who
then represents mfg in the market.
CGBP EXAM
GUIDE/COMPREHENSIVE STUDY
GUIDE/ ACTUAL EXAM Questions
with Detailed Verified Answers
Question: Economic Integration - Government Trade Collaboration -
Answer: 5 levels (order important) - as each level builds on the levels listed
before):
Free Trade Area (FTA) - e.g. NAFTA. Allows free movement of goods
Customs Union - common external trade policy i.e. same duty rate amongst all
members
Common Market - Free movement of all factors of production i.e. free labor
movement
Economic Union - members utilize a common currency (Monetary
Union/Currency Union)
Political Union or Nation State - common foreign policy, army etc. i.e. UK,
USA
Question:Mercantilism
Answer: - trade based on one winning & other losing
, Page | 2
Question:Absolute Advantage
Answer: - trade for mutually beneficial advantages
Question:Comparative Advantage
Answer: - even when a country has an absolute advantage in multiple
products, it should still trade for the betterment of society.
Question:Export Success Requires:
Answer: Management commitment
In-depth experience with the product/service - the business must have a solid
product/service, and understand how they compete, and devise an effective
way to compete.
Adequate Cash Flow
Capacity & Capability to expand and get product to international markets.
Question:Export Success - business that is "export ready" and market where
opportunity exists.
Answer: Conditions NOT critical for Export Success - International experience
(that can be hired); foreign language ability (though it helps); travel to the
foreign market (though this also helps too).
Question:Reasons to Go Global
, Page | 3
Answer: Sales to other markets - 95% of worlds consumers live outside the
US; common customer demands/tastes; improved economies of scale
(operating & process efficiencies).
Diversification of customers & risk
Access to lower cost structures - labor, material costs, etc.
Global branding - aiding access to new markets, distributors, etc.
Worldwide distribution & manufacturing - this can become a strong
competitive barrier to entry.
Economies of scale and learning beyond the US
Global cash flow - strategic movement of cash/assets.
Question:Value of an International Business Plan:
Answer: Builds consensus - aids in company-wide commitment & support
Aids in communication/sharing
Help identify critical steps company must take
Identifies responsibilities
Provides a basis for evaluation & future improvement
, Page | 4
Question:Primary Data (research technique)
Answer: original research, commissioned by a company to answer specific
questions they have.
Question:Secondary Data - (research technique)
Answer: using existing data that someone else has already compiled.
Question:Qualitative Data - (research technique)
Answer: opinions
Question:Quantitative Data - (research technique)
Answer: numbers
Question:Proactive market selection strategy is recommended (vs. being
Reactive).
Answer:
Question:Foreign Market Entry Modes: (Rank order: Low control & feedback
to High; Low Risk to High)
Answer: Indirect (EMC's, Piggyback)
Direct (export only, no foreign direct investment)
Company sells product to overseas buyer, typically a distributor or agent who
then represents mfg in the market.
