International Business Ch. 7 w/ Kevin Zhao

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7) ________ effects of economic integration are the overall growth in the market and the impact on a company caused by expanding production and by the company's ability to achieve greater economies of scale. A) Dynamic B) Static C) Economic D) Barrier

A) Dynamic

22) Many NGOs, including Africa Now, Quaker Peace and Social Witness, and Save the Children, are members of the ________. A) Ethical Trading Initiative B) International Red Cross Council C) United Nations Global Compact D) United Nations Economic and Social Council

A) Ethical Trading Initiative

11) The EU organization that provides political leadership, drafts laws, and runs the daily programs of the EU is the ________. A) European Commission B) Council of Ministers C) European Parliament D) European Central Bureaucracy

A) European Commission

15) Which of the following members of the European Union has NOT adopted the euro? A) United Kingdom B) Estonia C) Germany D) Greece

A) United Kingdom

8) When the European Union was formed, the size of the market increased for European companies. This is most likely an example of a ________. A) dynamic effect B) static effect C) trade diversion D) trade reflection

A) dynamic effect

1) The European Union is an example of ________ integration. A) regional B) relative C) global D) bilateral

A) regional

21) An example of an effective commodity agreement is ________. A) the Organization of Petroleum Exporting Countries B) the Organization of Petroleum Importing Countries C) the International Tin Alliance D) the International Cotton Alliance

A) the Organization of Petroleum Exporting Countries

19) Which of the following are members of NAFTA? A) the United States, Canada, and Mexico B) North America and Latin America C) the United Kingdom, the United States, and Canada D) the United States, Canada, and Brazil

A) the United States, Canada, and Mexico

17) Korman Industries is a foreign multinational that recently established operations in the European Union. What is the most likely advantage for Korman as a result? A) Governance processes are streamlined because local governments have been eliminated. B) Market size is larger because of the elimination of internal tariff barriers. C) Differential external tariff barriers exist for product shipments. D) The EU uses English as its official language.

B) Market size is larger because of the elimination of internal tariff barriers.

13) Which of the following was primarily responsible for establishing the euro? A) Lisbon Treaty B) Treaty of Maastricht C) European Finance Act D) Single European Act

B) Treaty of Maastricht

16) 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? A) What is the primary language of most workers? B) Which country has the best production location? C) Which currency has the most favorable value of the euro? D) Which country has the lowest tariffs for manufactured products?

B) Which country has the best production location?

2) Anderson Enterprises is a U.S. firm that manufactures light fixtures for commercial and residential consumers. Anderson is looking to expand internationally, so the firm should most likely ________. A) focus on developing new recruitment strategies and selection tests B) change their organizational structure to fit the norms of the foreign country C) disregard changes in trading groups because they have little effect on a company D) look to expand beyond the triad regions currently controlled by the top 500 MNEs

B) change their organizational structure to fit the norms of the foreign country

6) A ________ results when free mobility of factors of production is added to a customs union. A) customs union B) common market C) free trade agreement D) regional trade agreement

B) common market

4) A major problem with the Doha Round is that ________. A) developing countries want developed countries to better protect their intellectual property B) developing countries want a reduction in agricultural subsidies maintained by the developed countries C) the WTO does not want the developing countries to liberalize their investment rules D) because of security issues, not all countries were able to attend the meetings, so it was impossible to get a consensus vote

B) developing countries want a reduction in agricultural subsidies maintained by the developed countries

9) A free trade agreement is likely to increase efficiency because of ________. A) decreased competition B) increased competition C) decreased trade diversion D) decreased trade creation

B) increased competition

12) The EU organization that ensures consistent interpretation and application of EU treaties is the ________. A) European Commission B) Council of Ministers C) Court of Justice D) Council of Treaties and Laws

C) Court of Justice

10) The three major responsibilities of the ________ are legislative power, control over the budget, and supervision of executive decisions. A) European Commission B) European Council C) European Parliament D) European Court of Justice

C) European Parliament

5) The 27 member EU negotiates trade agreements as one. The EU and Brazil have negotiated a strategic trade alliance which is an example of a ________. A) customs union B) global free trade agreement C) bilateral agreement D) multilateral agreement

C) bilateral agreement

18) Which of the following recently threatened the future of the EU's common currency? A) refusal of the UK to use the euro B) failed mergers and acquisitions C) debt crisis in Greece D) human rights issues

C) debt crisis in Greece

14) The ________ is the common currency of the European Union. A) franc B) pound C) euro D) mark

C) euro

20) NAFTA was primarily formed because the member nations have ________. A) static and dynamic liberalization policies B) similarly sized economies and resources C) geographic proximity to each other D) competing interests with the EU

C) geographic proximity to each other

3) Which of the following accurately identifies a difference between GATT and the WTO? A) GATT could enforce member compliance with agreements, but the WTO cannot. B) At its inception, GATT had more member nations than the WTO currently has. C) GATT withdrew the most-favored-nation clause, but the WTO reinstated it. D) GATT rules did not cover trade in services, but the rules of the WTO do.

D) GATT rules did not cover trade in services, but the rules of the WTO do.


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