50 terms

Chapter 3

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31) Before an agreement can be reached between the United States and European Union, major differences will have to be worked out. These differences include aspects related to all of the following except:
A) agriculture.
B) genetically modified crops.
C) tariff reduction.
D) cross-border investment.
E) job creation.
E) job creation.
32) 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.
33) 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
34) Trade ministers representing the WTO member nations meet ________ to work on improving world trade.
A) weekly
B) monthly
C) annually
D) biannually
E) fortnightly
C) annually
35) 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) European Union.
B) Economic union.
C) Customs union.
D) Free trade area.
E) Common market.
C) Customs union.
36) ________ builds upon the elimination of internal tariff barriers, the establishment of common external barriers, and the free flow of factors.
A) European Union
B) Economic union
C) Customs union
D) Free trade area
E) Common market
C) Customs union
37) 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
38) A true economic union requires:
A) political unity.
B) social services.
C) welfare.
D) regional development.
E) taxation.
A) political unity.
39) 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.
40) Custom unions or a common market does not create a free trade area as compared to NAFTA due to:
A) no common external tariffs.
B) decreased production costs.
C) reduced competition.
D) ease of exporting commodities.
E) creation of a continental demand.
A) no common external tariffs.
41) 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.
42) NAFTA creates a free trade area in North America. However, Mexican avocado growers:
A) cannot hire illegal immigrants.
B) can only ship avocados to the United States in winter months.
C) have no quotas for the quantity of avocados shipped to the United States.
D) cannot impose tariffs of their own.
E) None of the above
B) can only ship avocados to the United States in winter months.
43) 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 tariffs.
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 tariffs.
44) The allure of the Latin American market has been its:
A) lack of inflation.
B) considerable size.
C) rapid economic growth.
D) low foreign debts.
E) protectionism.
B) considerable size.
45) 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.
46) The five original members of the Central American Integration System did not include:
A) El Salvador.
B) Honduras.
C) Guatemala.
D) Nicaragua.
E) Venezuela.
E) Venezuela.
47) 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
48) Implementation of the Central American Free Trade Agreement with the United States created a free trade area known as DR-CAFTA that includes all SICA members except:
A) Honduras.
B) Guatemala.
C) Nicaragua.
D) Panama.
E) Costa Rica.
D) Panama.
49) The Secretariat for Central American Integration is headquartered in:
A) El Salvador.
B) Honduras.
C) Guatemala City.
D) Nicaragua.
E) Costa Rica.
C) Guatemala City.
50) Considering the progress, attempts to achieve integration in Central America has been described as:
A) uncoordinated.
B) coordinated.
C) efficient.
D) costly.
E) productive.
A) uncoordinated.
51) The country that withdrew from the original members of the Andean Community is:
A) Bolivia.
B) Chile.
C) Ecuador.
D) Peru.
E) Venezuela.
B) Chile.
52) About 70% of Ecuador's flower harvest is exported to:
A) Bolivia.
B) the United States.
C) Colombia.
D) Peru.
E) Venezuela.
B) the United States.
53) The "Common Market of the South" in Latin America is used to describe:
A) SICA.
B) Mercosur.
C) Andean Community.
D) CARICOM.
E) FTAA.
B) Mercosur.
54) Argentina provides a good example of how a country can emerge from an economic crisis as a stronger global competitor as per the following statement:
A) Argentina reduced the duties on consumer goods.
B) Argentina devalued its currency for exports and capital transactions.
C) Argentina added tariffs on imported wines.
D) Argentina adopted the U.S. dollar as official currency.
E) Argentina added tariffs on wine produced within the country.
B) Argentina devalued its currency for exports and capital transactions.
55) The English-speaking CARICOM members in the eastern Caribbean are concerned with defending their privileged trading position with:
A) Russia.
B) China.
C) the United States.
D) the United Kingdom.
E) Australia.
C) the United States.
56) The original six members of the ASEAN (Association of Southeast Asian Nations) included all of the following countries except:
A) Singapore.
B) Thailand.
C) India.
D) Philippines.
E) Brunei.
C) India.
57) Which one of the ASEAN members has the World's second-largest container port?
A) Singapore
B) Thailand
C) India
D) Philippines
E) Brunei
A) Singapore
58) There are barriers in Japan for global marketers in terms of attitudes as well as laws. Barriers include all of the following except:
A) any organization wishing to compete in Japan must be committed to providing top-quality products and services.
B) repeat visits and extended socialization with distributors.
C) goods marketed should have a semblance of western products and services.
D) marketers must master the keiretsu system of tightly knit corporate alliances.
E) trust has to be built before conducting successful business.
C) goods marketed should have a semblance of western products and services.
59) For the past 40 years Bhutan, a kingdom of 700,000 people in the Himalaya mountains, has relied on the following measure:
A) GNI.
B) GDP.
C) GNH.
D) GNP.
E) GTE.
C) GNH.
60) 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
61) The Maastricht Treaty called for:
A) the creation of an Asia Free Trade Area (AFTA).
B) the creation of an economic and monetary union 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 in Europe.
62) The introduction of the 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.
63) The non-EU member which uses the euro as its currency is:
A) Estonia.
B) Kosovo.
C) Montenegro.
D) Vatican City.
E) San Marino.
D) Vatican City.
64) The new country joining the EU at the beginning of 2014 is:
A) Slovakia.
B) Estonia.
C) Latvia.
D) Slovenia.
E) Cyprus.
B) Estonia.
65) Markets of Central and Eastern Europe present interesting opportunities and challenges. Companies such as 3M International, McDonald's, Philips Electronics, and Henkel are moving into the region for all of the following reasons except:
A) the region is an important new source of growth.
B) that the first company to penetrate a country market often emerges as leader.
C) wage rates are much lower than those in Spain, Portugal, and Greece.
D) the region offers attractive locations for low-cost manufacturing.
E) core products and Western brand names need changes to meet consumer demands.
E) core products and Western brand names need changes to meet consumer demands.
66) Management strategic options pertaining to products that are facilitated by a single European market include:
A) standardized packaging and labeling.
B) consolidated production.
C) shift from brand to benefit segmentation.
D) seeking marketing economies.
E) all of the above
E) all of the above
67) Because they are in transition, the markets of Central and Eastern Europe present interesting opportunities and challenges which include:
A) new source of growth.
B) first mover advantage.
C) exporting as an entry mode.
D) lower wage rate.
E) all of the above
E) all of the above
68) The enlargement of the EU has impacted marketing strategies in the Eurozone countries by:
A) making it difficult to export food products from one country to another.
B) increasing the cost of production since the 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.
69) 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 the 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.
70) With the global economic crisis as a backdrop, the first-ever Happiness Congress was held in:
A) Sweden.
B) Austria.
C) Spain.
D) Italy.
E) Greece.
C) Spain.
71) 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) the "Arab Spring."
C) a wide gap between rich and poor nations due to oil revenues.
72) The Gulf Cooperation Council (GCC) includes all of the following countries except:
A) Kuwait.
B) Saudi Arabia.
C) Iraq.
D) Bahrain.
E) Oman.
C) Iraq.
73) A key word(s) in conducting business in the Middle East is:
A) Arab Spring.
B) Connection.
C) Discrimination.
D) Male dominance.
E) haggling.
B) Connection.
74) In spite of having about 45% of the world's known oil reserves, Saudi Arabia and other Middle Eastern countries post current-account deficits, largely because:
A) of poor accounting practices.
B) of 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.
75) 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.
76) 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.
77) In order to form a free trade area, South Africa has signed a Trade, Development, and Cooperation Agreement (TDCA) with:
A) Swaziland.
B) EU.
C) Namibia.
D) Angola.
E) Japan.
B) EU.
78) African companies will find it easier to gain access to financing from the U.S. Export-Import Bank due to:
A) AGOA.
B) GATT.
C) SADC.
D) TDCA.
E) SACU.
A) AGOA.
79) Other than tariffs, there are certain problems that restrict free trade between the European Union and the United States which includes all of the following except:
A) use of genetically modified agricultural products.
B) product labeling.
C) Hollywood movie domination.
D) Internet usage.
E) cultural diversity.
D) Internet usage.
80) The reason why Greece, Ireland, Portugal, and Spain sometimes are referred to as the eurozone's "peripheral countries" is:
A) that all have tourist attractions.
B) that they are situated in the peripheral parts of Europe.
C) that they all rank lower than their EU neighbors in terms of infrastructure.
D) that they are riding on the way of technology boom.
E) that they are all marred by sex scandals.
C) that they all rank lower than their EU neighbors in terms of infrastructure.