global marketing chap 3

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

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

It is mandatory for countries to notify the WTO when they enter into preferential trade agreements.

false

Mercosur or the Common Market of the South resulted from a treaty signed by four countries: Argentina, Brazil, Paraguay, and Venezuela

false

The five original members of the Central American Common Market (CACM) are El Salvador, Honduras, Guatemala, Panama, and Cost Rica.

false

The objective of the EU member countries is to harmonize national laws and regulations so that goods, services, people, and money can flow freely across national boundaries.

false

The ultimate goal of a free trade agreement is to have standardized duties on goods that cross borders between the partners.

false

Because they are in transition, the markets of Central and Eastern Europe present interesting opportunities and challenges which include: A) new sources of growth. B) first mover advantage. C) exporting as an entry mode. D) lower wage rate. E) all of the above

e

The WTO's neutral trade experts also serve as mediators in global trade disputes.

true

) Argentina was allowed to break from the CET and raise duties on consumer goods. This crisis had a silver lining, which is evident from all of the following points except: A) Argentina's wine exports to the United States were worth four times more when dollar revenues were converted into pesos. B) Argentina became known for the world's most expensive wines. C) the currency devaluation made Argentine vineyard property cheaper for foreign buyers. D) low prices for land, inexpensive labor, and ideal growing conditions for the Malbec grape have combined to make Argentina's wine industry a major player in world markets. E) Argentina can make better wine locally for less money than anywhere in the world.

b

) 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

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

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

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

b

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

Which of the following statement is not true related to the African Growth and Opportunities Act (AGOA)? A) The theme of the AGOA is "Trade, not Aid." B) It is designed to help African nations that help neighboring countries in need. C) The law is designed to support African nations that make significant progress toward economic liberalization. D) African companies will find it easier to gain access to financing from the U.S. Export-Import Bank. E) AGOA represents a formal step toward a U.S.-Africa free trade area.

b

) 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

) 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

Bhutan has relied on a measure besides economic growth, namely, gross national happiness (GNH). The GNH Index includes all of the following indicators except: A) psychological well-being. B) community vitality. C) economic vitality. D) environmental diversity. E) living standards.

c

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

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

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

The markets of Central and Eastern Europe present interesting opportunities and offer attractive opportunities 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

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

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

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

________ 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

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

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

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

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

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) that 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) that region offers attractive locations for low-cost manufacturing. E) core products and Western brand names need changes are appropriate for business.

e

A Customs Union represents the most fully developed form of preferential trade agreement among nations

false

A free trade area represents the most fully developed form of preferential trade agreement among nations.

false

A preferential trade agreement is a mechanism that confirms special treatment on select trading partners, thereby at times discriminating against other trading partners.

false

Implementation of the Central American Free Trade Agreement with the United States created a free trade area known as DR-CAFTA.

false

Although the ASEAN member countries are geographically close, they have historically been divided in many respects

true

CARICOM's main objective has been to achieve a deepening of economic integration by means of a Caribbean common market.

true

Despite trade agreements, attempts to achieve integration in Central America have been described as uncoordinated, inefficient, and costly. There are still tariffs on imports of sugar, coffee, and alcoholic beverages

true

GATT (General Agreement on Tariffs and Trade) agreement had no enforcement power since the losing party in a dispute was entitled to ignore the ruling.

true

In a Common Market there are no internal barriers to trade, and it allows for free movement of factors of production such as labor and capital

true

In addition to eliminating internal barriers to trade, members of a customs union agree to the establishment of common external tariffs

true

Individually and collectively, Association of Southeast Asian Nations (ASEAN) countries are active in regional and global trade.

true

The United States and the EU have the world's largest trading relationship.

true