Chapter 3

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Terms in this set (...)

41. "Doha Round" refers to:

a. a trade conference held every year in Middle East
b. the economic growth witness in Dubai
c. a series of multilateral trade negotiations among WTO members
d. a group of countries representing desert regions
e. the ongoing growth as seen in Qatar
e. the ongoing growth as seen in Qatar
42. The World Trade Organization, which came into existence on January 1, 1995, is the successor of another organization with the abbreviation:

a. DSB
b. GATT
c. FTAA
d. NAFTA
e. ASEAN
b. GATT
43. Which form of regional cooperation agreement, when fully implemented, entails creation of a unified central bank, the use of a single currency, and common policies on agriculture, social services and welfare:

a. free trade area
b. customs union
c. common market
d. economic union
e. dispute settlement body
d. economic union
44. Arrange the following in order from lowest to highest level of economic integration:

a. customs union->economic union->free trade area->common market
b. economic union->customs union->common market->free trade area
c. common market->free trade area->economic union->customs union
d. free trade area->customs union->common market->economic union
e. common market->economic union->customs union->free trade area
d. free trade area->customs union->common market->economic union
45. The form of economic cooperation that calls for 1) eliminating internal barriers
to trade and 2) establishing common external barriers is known as
a(n) _____________ .


a. free trade area
b. economic union
c. customs union
d. free trade area
e. common market
c. customs union
46. As a result of CFTA the U.S. automakers participate in the Canadian auto market thereby benefiting due to:

a. greater economies of scale
b. decreased production costs
c. reduced competition
d. ease of exporting automobiles
e. creating a continental demand
a. greater economies of scale
47. The form of economic cooperation that calls for countries to eliminate all internal barriers to trade among themselves even while maintaining independent trade policies vis-à-vis third countries is known as a(n) ____________ :

a. economic union
b. customs union
c. free trade area
d. common market
e. none of the above
c. free trade area
48. A new bilateral agreement between the European Union and Turkey will eliminate internal trade barriers and establish common external tariffs. This arrangement is a(n):

a. free trade area
b. customs union
c. common market
d. economic union
e. none of the above
b. customs union
49. Agricultural subsidies and quotas that developed outside the multilateral framework under GATT remained a divisive issue because:

a. affluent countries protect and subsidize farm production
b. home-market consumers pay lower prices
c. surplus agricultural output is sold abroad at high prices
d. agricultural land became scarce in some countries
e. American farmers did not participate in export
a. affluent countries protect and subsidize farm production
50. NAFTA creates a free trade area as opposed to a customs union or a common market due to the fact that:

a. the agreement does not leave the door open for discretionary protectionism
b. the governments of all three nations decided to eliminate tariff
c. the issue of illegal immigration from Mexico to the United States is resolved
d. restrictions are imposed on the use of goods, services, and investments
e. restrictions are imposed on labor movements among members
b. the governments of all three nations decided to eliminate tariff
51. The most important preferential trading arrangements in Latin America do not include:

a. SICA
b. The Andean Community
c. CARICOM
d. Mercosur
e. BRIC
e. BRIC
52. Which of the following is NOT a member of the Central American Integration System (SICA):

a. El Salvador
b. Honduras
c. Guatemala
d. Nicaragua
e. Ecuador
e. Ecuador
53. Which member of the Central American Integration System has both the largest economy and the largest population:

a. El Salvador
b. Honduras
c. Guatemala
d. Nicaragua
e. Costa Rica
c. Guatemala
54. A tourist visiting Tobago would be traveling to a country that belongs to the:

a. SICA
b. SADCC
c. Andean Group
d. CARICOM
e. EU
d. CARICOM
As a result of America's failure to follow through on its promises in the Latin American region, Mercosur, CARICOM, SICA, And THE Andean Community intend to pursue further integration among themselves as well as with:

a. Russia
b. China
c. Europe
d. Asia
e. Australia
c. Europe
56. Which of the following helps explain the widespread availability in the United States of athletic apparel labeled "Made in Guatemala":

a. SICA
b. CBI
c. TPA
d. NAFTA
e. FTAA
b. CBI
57. "ASEAN plus three" refers to the expanded roster of members which include:

a. all ASEAN members and Australia, New Zealand, and India
b. all ASEAN members and Canada, Japan, and India
c. all ASEAN members and Japan, China, and Korea
d. all ASEAN members and India, Bangladesh, and Pakistan
e. all ASEAN members and Australia, Korea, and China
c. all ASEAN members and Japan, China, and Korea
58. India presents an attractive opportunity for many foreign companies; however, one of the most unpredictable factors from a business point of view is:

a. growing population base
b. rate of illiteracy
c. political climate
d. weather
e. export and import licenses
c. political climate
59. To date, actual economic integration among ASEAN countries has been limited. However, the member nations hope to create a(n) _________ early in the 21st century:

a. customs union
b. economic union
c. common market
d. free trade area
e. trade union
d. free trade area
60. Factors that served as a backdrop to the trade dispute between Japan and the United States that escalated in mid-1995 included:

a. Japanese commitment to top-quality products and services
b. products and marketing had to be tailored to local tastes
c. countless visits and socializing with distributors to built trust
d. the existence of keiretsu system of tightly knot corporate alliances
e. all of the above
e. all of the above
61. Which of the following ASEAN countries ranks number one in terms of two-way trade with the United States:

a. Brunei
b. Malaysia
c. Singapore
d. Thailand
e. Vietnam
c. Singapore
The two new member countries that joined EU on January 01, 2007 are:

a. Hungary and Poland
b. Bulgaria and Romania
c. Latvia and Lithuania
d. the Slovak Republic and Slovenia
e. Cyprus and Estonia
b. Bulgaria and Romania
Which of the following is not a member of the European Union?

a. Sweden
b. Austria
c. Switzerland
d. Italy
e. Greece
c. Switzerland
The Maastricht Treaty called for:

a. the creation of an Asia Free Trade Area (AFTA)
b. the creation of an economic and monetary union (EMU) in Europe
c. Chile's acceptance into Mercosur
d. the purchase of CDs and tapes from distributors in Europe
e. the creation of the seven-nation European Free Trade Association (EFTA)
b. the creation of an economic and monetary union (EMU) in Europe
The introduction of Euro by EU resulted in multifaceted advantages which include:

a. elimination of costs associated with currency conversion
b. fixed exchange rate worldwide
c. elimination of paper currency and coins
d. withdrawal of French Francs from circulation
e. a choice for using local or European currency
a. elimination of costs associated with currency conversion
Which of the following is not an appropriate strategic option for Europe's single market?

a. consolidate production
b. centralize distribution
c. develop non-traditional channels such as direct marketing
d. standardize labeling and packaging where applicable
e. none of the above
e. none of the above
Management strategic options pertaining to products that are facilitated by single European market include:

a. standardized packaging and labeling
b. consolidate production
c. shift from brand to benefit segmentation
d. seek marketing economies
e. all of the above
e. all of the above
The practice of transshipment under the single European market helped the music industry by:

a. helping online downloading of music by customers
b. music retailers in Europe to buy CDs from single distributor
c. forcing major record companies to adopt uniform pricing policies across Europe
d. allowing record companies to decide on price based on cost in each country
e. letting record companies to maintain their own distribution system
c. forcing major record companies to adopt uniform pricing policies across Europe
The enlargement of the EU has impacted marketing strategies in the Euro zone countries by:

a. making it difficult to export food products from one country to another
b. increasing the cost of production since Euro replaced local currency
c. shifting products from one market to another in the event of shortages
d. reduced tariffs and quotas for products imported from non EU members
e. having less flexibility in the placement of factories
c. shifting products from one market to another in the event of shortages
The Cotonou Agreement is the successor to the:

a. GATT
b. ASEAN
c. Lome' Convention
d. SACD
e. Mercosur
c. Lome' Convention
The markets of Central and Eastern Europe present interesting opportunities and offer attractive locations for low-cost manufacturing due to:

a. their location being close to sea
b. the cultural similarities
c. wage rates being lower than in Spain, Portugal and Greece
d. strict laws and regulations
e. prohibitive tariffs and export restrictions
c. wage rates being lower than in Spain, Portugal and Greece
Political and economic changes in Central and Eastern Europe have resulted in toppling of entrenched institutions such as:

a. CIS
b. SICA
c. COMECOM
d. CARICOM
e. WTO
c. COMECOM
The country which is not included in the Central European Free Trade Association (CEFTA) is:

a. Hungary
b. Lithuania
c. Poland
d. the Czech Republic
e. Slovakia
b. Lithuania
Political and Social instability in the Middle Eastern region can primarily be attributed to:

a. desert conditions and lack of agricultural land
b. cultural differences among nations
c. a wide gap between rich and poor nations due to oil revenues
d. lack of water purification facilities
e. absence of Western corporations
c. a wide gap between rich and poor nations due to oil revenues
The member of the Gulf Cooperation Council (GCC) with the largest economy and population size is:

a. Bahrain
b. Kuwait
c. Oman
d. Qatar
e. Saudi Arabia
e. Saudi Arabia
In spite of having about 45% of the world's know oil reserves, Saudi Arabia and other Middle Eastern countries post current-account deficits, largely because:

a. poor accounting practices
b. vast economic diversification
c. they must import most of the goods and services
d. most of the oil is exported
e. new businesses are being developed
c. they must import most of the goods and services
The Middle East and North Africa are sometimes viewed as a regional entity referred to as:

a. GCC
b. AMU
c. MENA
d. ACC
e. ECOWAS
c. MENA
In recent years, the economy of selected countries in ECOWAS has improved except in:

a. Ivory Coast
b. Ghana
c. Benin
d. Sierra Leone
e. Nigeria
d. Sierra Leone
In order to form a free trade area, South Africa has been in discussion with:

a. Swaziland
b. EU
c. Namibia
d. Angola
e. Japan
b. EU
The highest GNP among ECOWAS members is found in _____________, a country that generates significant revenues from oil exports:

a. Ghana
b. Niger
c. Mauritania
d. Nigeria
e. Senegal
d. Nigeria