International Business Chapter 8
Terms in this set (60)
___________ integration is the political and economic agreements among countries that give preference to member counties to the agreement.
Country A and Country B make an agreement to cooperate more closely and implement tariff reductions. Which of the following best describes this agreement?
The European Union is an example of _______ integration.
Global integration occurs as countries from all over the world decide to cooperate through the
Which of the following statements most accurately describes the relationship between trading groups and MNEs?
Regional trading groups can define the rules under which companies must operate within that region
Anderson Enterprises is a U.S. firm that manufacturers light fixtures for commercial and residential consumers. Anderson is looking to expand internationally, so the firm should most likely ____________.
change their organizational structure to fit the norms of the foreign country.
Baldani Manufacturing, an Italian firm, plans to expand into Asia. In order to take advantage of regional trading groups, Baldani will most likely need to change its_________.
Which of the following is NOT one of the regions included in the trade regions of the world?
The _________ clause embodied the fundamental principle of GATT - trade without discrimination.
Which of the following accurately identifies a difference between GATT and the WTO?
GATT rules did not cover trade in services, but the rules of the WTO do.
Under the WTO agreement, ____________.
a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures
A major problem with the Doha Round is that __________.
developing countries want a reduction in agricultural subsidies maintained by the development countries.
Most trade groups contain countries in the same area of the world. Why is this so?
The distances that goods need to travel between such countries are short.
Which of the following groups of countries is most likely to form a regional trading group?
Canada, United States, Mexico
The EU and Brazil have negotiated a strategic trade alliance. This is an example of a __________.
The goal of a ___________ is to abolish all tariffs among member countries.
free trade agreement
The European Union is best described as a ________
A ____________ results when free mobility of factors of production is added to a customs union
Members of the Andean Community (CAN) have a common external tariff. CAN is most likely a ________.
__________ effects of economic integration are the overall growth in the market an the impact on a company caused by expanding production and by the company's ability to achieve greater economies of scale.
Trade shifting to countries within a regional trade agreement at the expense of trade with countries not in the agreement is called __________.
__________ effects of trade agreements are the shifting of resources from inefficient to efficient companies as trade barriers fall.
When the European Union was formed, the size of the market increased for European companies. This is most likely an example of a ____________.
Since production has shifted to more efficient producers due to comparative advantage, consumers in Country X have had access to more goods at lower prices. Which of the following most likely exists?
A free trade agreement is likely to increase efficiency because of ________.
Assume the U.S. companies are importing the same product from Mexico to Taiwan. The United States enters into an FTA with Mexico but not with Taiwan. Consequently, the United States begins to import more goods from Mexico than from Taiwan, even though the Mexican products are not any better or cheaper. This is most likely an example of ____________.
Because the size of the market increases when trade barriers fall, companies can increase their production, which will result in lower costs per unit. This phenomenon is known as _________.
Economies of scale
The __________ is the European Union's ultimate decision-making body and is composed of the different ministers of the member countries.
Council of the European Union
The three major responsibilities of the __________ are legislative power, control over the budget, and supervision of executive decisions.
The EU organization that provides political leadership, drafts laws, and runs the daily programs of the EU is the __________.
The EU organization that ensures consistent interpretation and application of EU treaties is the ___________.
Court of Justice
Which of the following was primarily responsible for establishing the euro?
Treaty of Maastricht
Critics of the Lisbon Treaty primarily argue that the legislation will ____________.
reduce national sovereignty
The ______ is the common currency of the European Union.
Which of the following statements about the euro is true?
It was designed to eliminate currency as a barrier to trade in the EU.
Which of the following members of the European Union has NOT adopted the euro?
Hudson Manufacturing is an MNE based in the U.S. with operations in Asia. The firm is considering expansion into the European Union. Which of the following questions is most relevant to the decision?
Which country has the best production location?
Hudson Manufacturing is an MNE based in the US with operations in Asia. The firm is considering expansion into the European Union. Executives at the firm are debating whether central Europe or Eastern Europe would be best for the firm. Which of the following best supports a decision to establish operations in Eastern Europe?
Hudson wants to minimize costs by keeping wages low.
Market size is larger because of the elimination of internal tariff barriers
Which of the following recently threatened the future of the EU's common currency?
debt crisis in Greece
Which of the following are members of NAFTA?
the United States, Canada, and Mexico
NAFTA was primarily formed because the member nations have _________.
geographic proximity to each other
NAFTA is a good example of __________.
Compared to the European Union, the North American Free Trade Agreement ________.
is slightly smaller in population and GDP
Under NAFTA, rules of origin ensure that ______.
only goods produced mostly within the region are eligible for liberal tariff conditions.
According to regional content rules, at least __________ of the net cost of most products must come from the NAFTA region in order to get access to the tariff reductions of NAFTA.
Which of the following is a unique provision of NAFTA?
The major trade group in South America involving Brazil, Paraguay, Uruguay, and Argentina is __________.
The __________ is a preferential trade agreement that was organized in 1967 and comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
Which of the following is the primary focus of the African Union (AU)?
An NGO is _________.
a private institution independent of a government
Which of the following is most likely a true statement about the relationship between the United Nations and NGOs?
A UN committee discusses issues of importance to NGOs but does not regulate their activities.
Many NGOs, including Africa Now, Quaker Peace and Social Witness, and Save the Children, are members of the ______.
Ethical Trading Initiative
Commodity agreements __________.
were initially established to attempt to stablizie commodity prices
The role of the most commodity agreements now is to _______.
discuss issues and disseminate information about commodities
An example of an effective commodity agreement is __________.
the Organization of Petroleum Exporting Countries.
The Organization of Petroleum Exporting Countries ___________.
uses quotas to control oil prices
Which of the following primarily triggered Toyota's investment in the European Union?
The EU lowered trade barriers on foreign auto imports
Which of the following is Wal-Mart's competitive advantage in Mexico?
Wal-Mart is able to transfer its "everyday low prices" concept to Mexico
What was the primary purpose of the formation of Sinergia?
better compete with Wal-Mart on price