International Marketing Chapter 2 Study Questions

3. In general, the larger the country's domestic economy, the less dependent it tends to be on exports and imports relative to its

gross domestic product

1. The Global economy is becoming more

intertwined

39. One hurdle that used to protect information from being acquired easily was that it was unfungible. Unfungible means:

it was difficult to replace one item with another

8. Trading in foreign currencies has an effect on world trade. For example, a rise in the value of the local currency due to daily flows vis-à-vis other currencies makes exports:

more expensive

42. An evolving trend in international economic activity is the formation of:

multinational trading blocs

62. The sovereignty of _______________ will perhaps continue to weaken due to multinationals and the increasing integration of economies.

nations

35. In December 1999, WTO launched what would have become the beginning of a ___________ round of negotiations in Seattle, Washington, to significant protests.

ninth

26. When GATT was successful in lowering tariff barriers to world trade, many nations created:

nontariff barriers

57. The Maastricht Treaty is a(n):

political union

58. The last step of the possible integration forms is the:

political union

52. The primary difference between a common market and a customs union is that the common market:

removes all restrictions on the flow of capital and labor among member nations

60. Researchers have reported that multinationals have not been as great a threat to countries' national sovereignty because multinationals have yet to solve the problem of:

size

77. There is no evidence that high tax rates in Nordic countries are adversely affecting the ability of these countries to compete effectively in world markets.

true

80. The Uruguay Round set up an international body called the World Trade Organization (WTO).

true

81. As of April 26, 2015, the WTO had 161 member countries.

true

83. The World Trade Organization (WTO) is a global institutional proponent of free trade.

true

85. Over the Internet, any piece of electronically represented intellectual property can be instantly copied anywhere in the world.

true

86. One consequence of fungible content, information products, and electronic networks is an additional assault on the power of national governments to regulate international commerce.

true

87. In the U.S., the Federal Trade Commission (FTC) is in charge of cases where entities are trying to mislead the public and commit fraud.

true

90. A free trade area (FTA) is a formal agreement among two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries.

true

91. Regarding regional integration, South American markets are still less open than those of East Asia.

true

92. FTAA stands for Free Trade Area of the Americas.

true

93. A common market eliminates all tariffs and other barriers to trade among members of the common market.

true

96. A monetary union represents the fourth level of integration with a single common currency among politically independent countries.

true

10. The World Economic Forum's Global Competitiveness Report placed two Asian Tigers (Taiwan and Singapore) among the world's top ______ economies (along with the Finland, United States, Sweden, Denmark, Iceland, Switzerland, Norway, and Australia).

twenty

The ________ volume of international trade in currencies exceeds the annual value of the trade in goods and services.

weekly

30. The World Trade Organization (WTO) took effect on:

January 1, 1995

17. Which of the following countries is NOT on the list of top 10 exporters?

Korea, Mexico

Why did Nokia lose market share in China?

Local producers appeared with a cheapter, adequate phone

22. Which of the following countries is not considered to be a big emerging market?

Mexico

79. The main operating principle of the General Agreements of Tariffs and Trade (GATT) is the concept of the Highly Favored Nation status (HFN).

false

82. The Doha Round paved the way for China and Singapore to get full membership in the WTO.

false

84. TRIPs (Trade-Related Aspects of Intellectual Property Rights), an agreement concluded as part of the GATT Uruguay Round, is an attempt to create a universal patent system.

false

88. Regulating international e-commerce does not require cross-border cooperation.

false

89. NAFTA is the free trade area among Canada, the United States, and Chile.

false

94. 1993's Maastricht Treaty succeeded the Treaty of Brussels.

false

95. A common market and a monetary union are basically the same thing.

false

97. The U.S. government defines the multinational corporation for statistical purposes as a company that owns or controls 60 percent or more of the voting securities, or the equivalent of at least one foreign business enterprise.

false

68. TPP stands for Trade Pacific Partnership.

false; trans-pacific partnership

34. One of the differences between WTO and GATT is that WTO's dispute settlement mechanism is:

faster and more automatic

9. Country competitiveness is not a ___________ thing.

fixed

4. When firms invest in manufacturing and distribution facilities outside their home countries to expand into new markets around the world, they have added operational capacity to the stock of

foreign direct investment

56. A monetary union represents the ____________ level of integration with a single common currency among politically independent countries.

fourth

46. A ___________________ is a formal agreement among two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries.

free trade area

59. The principle goal of a political union is that it:

gives up all sovereignty among individual members

73. The Chinese government provides financial support and credit support to enterprises going abroad.

true

74. Asia is the largest FDI recipient region in the world.

true

76. The world's largest importing country is the U.S.

true

31. As of April 26, 2015, the World Trade Organization (WTO) has _________ member countries.

161

54. The new European currency, the euro, began its circulation in January ________.

2002

15. In the past 20 years, India's average growth rate in GDP has been over:

5 percent

14. In the past 20 years, China's average growth rate in GDP has been over:

9 percent

11. In the World Economic Forum's Global Competitiveness Report in 2015-2016, four of the top twenty countries are from _________________ countries.

Asian

21. Future trade flows are likely to move how?

Between the Triad nations and the BEMs

13. BEMs stand for:

Big Emerging Markets

45. NAFTA is the free trade area among the United States, Mexico, and ______________.

Canada

16. Which country consistently achieves the highest growth rates in GDP?

China

18. Which nation is the world's largest exporter?

China

19. With which country does the U.S. have a trade deficit over $340 Billion in 2014?

China

48. The Free Trade Areas of the Americas (FTAA) was proposed in

December 1994

25. The main operating principle of the General Agreements of Tariffs and Trade (GATT) was the concept of normal trade relations (NTR) status, formerly known as:

Most Favored Nation status

44. Which of the following is an example of an international trading bloc?

NAFTA

47. An example of a free trade area would be:

NAFTA

27. The World Trade Organization was created in the eighth round of the GATT talks-called the ________________________ that lasted from 1986 to 1994.

NOT Brussels Round, Paris Round, Morocco Round, Paraguay Round

23. Which of the following does NOT contribute to Singapore's consistently high ranking for global competitiveness?

Natural resources

12. Triad regions of the world include:

North America, Western Europe and Africa

_______refers to investment in foreign countries that are withdrawable at short notice (such as investment in foreign stocks and bonds).

Portfolio Investment

33. Doha's Development Agenda (Doha Round) includes new trade talks—an actions program to resolve developing countries' complaints about the implementation of Uruguay Round agreements, and an accord on ____________________________.

Trade Related Aspects of Intellectual Property Rights

55. The Maastricht Treaty succeeded the:

Treaty of Rome

41. UNCITRAL stands for:

United Nations Commission on International Trade Law

29. Perhaps the most important accomplishment of the Uruguay round of GATT talks was the establishment of:

World Trade Organization

24. General Agreements on Tariffs and Trade (GATT) was negotiated after:

World War 2

50. One difference between a customs union and a free trade area is that the customs union:

adds external tariffs to nonmember countries

70. In 2015-2016, according to the World Economic Forum's Global Competitiveness Report, 5 of the top 10 countries are Asian countries.

false

51. A ________________ eliminates all tariffs and barriers to trade among members, adopts a common set of external tariffs on nonmembers, and removes all restrictions on the flow of capital and labor among member nations.

common market

37. With respect to intellectual property rights, an example of an information-related product is:

computer software

49. When members of a free trade area add common external tariffs to the provisions of the free trade agreement, the free trade area becomes a:

customs union

75. The world's largest exporting country is China.

false

78. FDI in services is controlled by U.S. firms.

false

38. ____________________ are highly interested in putting strong international intellectual property laws in place:

developed nations

28. The World Trade Organization (WTO) was created in the _____________ of GATT talks---called the Uruguay Round.

eighth round

36. The WTO Work Program on _____________________ is in the process of defining the trade-related aspects of ___________________ that would fall under the parameters of WTO mandates.

electronic commerce

43. The universal reason for forming trading blocs is to:

ensure the economic growth and benefit of the participating countries

69. Today, countries have become economically independent.

false

6. An example of portfolio investment (or indirect investment) in foreign markets is:

stocks and bonds

40. One way around having your intellectual property (such as software) copied because of easy access is to sell:

subscriptions or membership

53. The effect of a monetary union is that member

switch to a common currency and a central bank

61. The U.S. government defines the multinational company for statistical purposes as a company that owns or controls ______________ or more of the voting securities, or the equivalent, of at least one foreign business enterprise.

ten percent

32. The World Trade Organization's (WTO) ninth and latest round of trade talks which were launched in November 2001 is called:

the Doha Round

2. A report from Credit Suisse Research Institute (CSRI) considers three potential futures for our global economy. Which of the following is NOT cited in the report?

the emergence of four centers of world power

63. GATT's successor is the World Trade Organization (WTO).

true

64. The growth of international flows in goods and services has consistently surpassed the growth rate of the world economy

true

65. In the past two years, world trade has grown at half the normal rate relative to world GDP.

true

66. Globalization has helped improve the economies of emerging and developing countries more than those of developed countries.

true

67. Smaller economies are more susceptible than larger economies to external shocks in the world economy.

true

71. The Triad Regions of the world (North America, Western Europe, and Japan) were the major economies in most of the 20th century.

true

72. FDI is shifting from developed countries to developing countries.

true