int marketing chapter 10

TRUE In a multinational market, an expressed goal is to give an advantage to the companies within the market in their dealings with other countries of the market group.

An expressed goal of a multinational marKet is to give an advantage to the companies within the market in their dealings with other countries of the marKet group.

TRUE Part of the efforts of the 192 member countries in the United Nations includes mutual economic development.

An important objective of the member states of the United Nations is bringing about mutual economic development.

D Geographical closeness does facilitate the functioning of a common market. It is seen that transportation networks are likely to be interrelated and well developed when countries are close together.

As George Platt examines mar ets that might match his company's investment requirements; he is particularly struck by the fact that the European Community has an extensive transportation network . This network seems to draw all the member nations closer together. Which of the following critical factors for ensuring an effective economic union is Mr. Platt examining when he reviews transportation networks? A. Cultural factors B. Trade factors C. Political factors D. Geographic proximity E. Economic factors

D The World Trade Organization represents the most important and comprehensive trade agreement in history.

At the most general level, the _____ represents the most important and comprehensive trade agreement in history. A. NAFTA B. Amsterdam Treaty C. MERCOSUR D. WTO E. ASEAN

B The European Union was a customs union before becoming a common market.

Before becoming a common market, the European Union was a ____. A. free trade area B. customs union C. political union D. regional cooperation group E. economic union

TRUE A free trade area provides its members with a mass market without barriers to impede the flow of goods and services.

Essentially, a free trade area (FTA) provides its members with a mass market without barriers to impede the flow of goods and services.

FALSE The European Union is a common mar et that is on the road to a political union.

The European Union is a good example of a free trade area

TRUE At the most general level, the World Trade Organization represents the most important comprehensive trade agreement in history.

The WTO represents the most important and comprehensive trade agreement in history.

TRUE Ten new countries were added to the EU in 2004. Bulgaria and Romania entered in 2007

) Ten new countries joined the EU in 2004 followed by Bulgaria and Romania in 2007.

B A common market agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.

A _____ agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations. A. political union B. common market C. regional cooperation for development (RCD D. customs union E. free trade area (FTA)

A Political union is the most fully integrated form of regional cooperation. It involves complete political and economic integration, either voluntary or enforced.

A _____ involves complete political and economic integration, either voluntary or enforced. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA)

E In a free trade area, an agreement is made between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.

A _____ is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA)

D The customs union is a logical stage of cooperation in the transition from an FTA to a common market.

A _____ is the intermediate step between a free trade area and a common marKet. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA)

C A commonwealth of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.

A _____ of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration. A. cartel B. community C. commonwealth D. proprietary colony E. trade association

FALSE A commonwealth of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.

A commonwealth of nations is a mandatory organization providing for the strongest possible economic integration relationship.

Multinational market regions are those groups of countries that see mutual economic benefit from reducing interregional trade and tariff barriers. They are an important global trend today. Although organizational form varies widely among mar et regions, the universal goals of multinational cooperation are economic benefits for the participants and the associated peace between and within countries.

Briefly, explain the concept of a multinational market region

C

ECOWAS, SADC, and EAC are active regional cooperative groups in ____. A. North America B. Australia C. Africa D. Europe E. Asia

B Eastern Europe and the Baltic states are moving from the restrictions of a Marxist-socialist system to some version of free markets and capitalism.

Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, have moved steadily toward adopting aspects of ____. A. capitalism B. socialism C. federalism D. democracy E. a customs union

B A free trade area provides its members with a mass market without barriers to impede the flow of goods and services.

Essentially, a free trade area (FTA) provides its members with: A. a political union. B. a mass market without barriers. C. a regional cooperation for social development. D. customs unionization. E. border crossing without passports.

FALSE Europe and Asia had a trade group that has emerged and persisted since the dissolution of the Soviet Union: the Commonwealth of Independent States (CIS).

Europe and Asia had a trade group that emerged and persisted since the dissolution of the Soviet Union called the Newly Independent States.

C To overcome issues such as inefficient industry and a soviet style command economy, Estonia switched over to a liberalized economy.

Europe and some of the Baltic states have switched over to a(n) _____ economy. A. protected B. open mar et C. command D. traditional E. mixed

A Markets are enlarged through preferential tariff treatment for participating members, common tariff barriers against outsiders, or both.

Every type of economic union shares the development and enlargement of market opportunities as a basic orientation. Which of the following best describes the primary way market opportunities are enlarged by economic unions? A. Preferential tariff treatment for participating members B. A common economic defense force with costs shared by all members C. Formulation of cartels D. Seeking economic dominance through boycotts of rivals E. Movement towards a common language as a means to overcoming economic hurdles

D Government bureaucracy, corruption, and organized crime are common problems found in the countries of the former Soviet Union.

Government bureaucracy, corruption and organized crime are common problems found in ____. A. Latin America B. United States C. China D. former soviet union E. Japan

C Multinational mar et regions are those groups of countries that see mutual economic benefit from reducing interregional trade and tariff barriers.

Groups of countries that see mutual economic benefit from reducing interregional trade and tariff barriers are called: A. multilateral economic associations. B. cartels. C. multinational mar et regions. D. trade associations. E. political and cultural associations.

D

In spite of possessing land that is rich, the majority of the population of this country is desperately poor. A. Japan B. Austria C. Australia D. Africa E. Asia

TRUE The Amsterdam Treaty increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members.

In the Treaty of Amsterdam (1977), the European Union agreed to accommodate the changes brought about by the monetary union and the admission of new members.

TRUE Iran, Pa istan and Tur ey were called RCD but were later renamed ECO.

Iran, Pa istan, and Tur ey, formerly the Regional Cooperation for Development (RCD), have renamed their regional group the Economic Cooperation Organization.

D Following the success of the European Steel and Coal Community, a global economic revolution began in 1958 when the European Economic Community was ratified and Europe too the step that would ultimately lead to the present-day European Union (EU).It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances.

It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances. Which single market is being talked about? A. European Commission B. The European Economic Community C. The European Steel and Coal Community D. The European Union E. The European Community

C Skeptics were apprehensive about how cultural, legal, and social differences in Europe could ever be overcome and how a unified Europe could ever emerge. However, their scepticism proved wrong and today they marvel at how far the European Union has come.

Many international trade experts have marveled at how members of the European Union have overcome ____, ____, and _____ differences. A. marketing; management; promotional B. energy; political; geographical C. cultural; legal; social D. time zone; coastal; religious E. language; educational; technological

C Most eastern European countries are privatizing state-owned enterprises, establishing free market pricing systems, relaxing import controls.

Most eastern European countries are privatizing state-owned enterprises, establishing free market pricing systems and: A. permitting greater government control/intervention. B. increasing trade barriers. C. relaxing import controls. D. making import controls stringent. E. switching over to a socialist economy.

D

Most of the problems faced by EU relates to: A. currency B. language C. human rights D. agriculture and monetary policy E. border issues.

TRUE The purpose behind the creation of a multinational market region is a reduction in trade and tariff barriers which facilitate economic benefits for member countries.

Multinational market regions are those groups of countries that see mutual economic benefit from reducing interregional trade and tariff barriers.

E Nations with complementary economic bases are least likely to encounter frictions in the development and operation of a common market unit.

Nations with _____ economic bases are least likely to encounter frictions in the development and operation of a common market unit. A. parallel B. divergent C. rigid D. profitable E. complementary

FALSE Nations with complementary economic bases are least likely to encounter frictions in the development and operation of a common market unit.

Nations with complementary economic bases are most likely to encounter frictions in the development and operation of a common mar et unit.

B

Now that Apartheid is over, South Africa's economic growth has ____. A. been overshadowed by it B. increased significantly C. decreased D. remained unchanged E. increased a little but still looks shaky

D Of all the multinational market groups, the European Union is the most secure in its cooperation and the most important economically.

Of all the multinational market groups, none has been more secure in its cooperation or more important economically than the: A. NAFTA accords . B. NATO accords. C. United Nations. D. European Union. E. Trans-Pacific Union.

A The long-term challenges facing the European Union in the next 50 years appear to fall into three categories: (1) improving the Union's economic performance, (2) deciding how to limit the political aspects of union, and (3) deciding about further enlargement.

One of the challenges facing the European Union in the next 50 years is ____. A. deciding how to limit the political aspects of union B. managing and preserving the value of the euro C. avoiding isolation from the United Nations D. the aging European population E. transitioning to a common language

FALSE Twelve members of the European Community ratified the Maastricht Treaty and committed themselves to economic and political integration.

One of the chief features of Maastricht Treaty (1992) was that 12 members of the European community agreed to an economic but not political union.

D One of the first major strengths of the European Union was its transportation network ; the opening of the tunnel between England and France further bound this common market.

One of the first factors that gave the EU an edge over others in the process of becoming a common market was/were: A. similarity in agriculture and monetary policy. B. political factors. C. similarities in language. D. a well developed transportation network . E. a common currency

E Regional economic cooperative agreements have been around since the end of World War II.

Regional economic cooperative agreements have been around since: A. the discovery of the New World. B. the American Revolution. C. the American Civil War. D. the end of World War I. E. the end of World War II.

The factors that facilitate the formation of a successful economic union are: Economic factors: Nations with complementary economic bases are least likely to encounter frictions in the development and operation of a common market unit. However, for an economic union to survive, it must have agreements and mechanisms in place to settle economic disputes. Political factors: Political amenability among countries is another basic requisite for the development of a supranational mar et arrangement. Participating countries must have comparable aspirations and general compatibility before entering into an agreement. Geographic and Temporal proximity: Although geographic and temporal proximity are not absolutely imperative for cooperating members of a customs union, such closeness does facilitate the functioning of a common market. Transportation networks (basic to any marketing system) are li ely to be interrelated and well developed when countries are close together. Cultural factors: The more similar the culture, the more likely an agreement is to succeed, because members understand the outlook and viewpoints of their colleagues.

Successful economic union requires that four factors be in the positive range for success to occur. Briefly describe the four factors.

FALSE GAFTA stands for Greater Arab Free Trade Area.

The Arab Gulf states, Egypt, and Morocco have wor ed out an agreement on an Arab Free Trade Area, sometimes called the Gulf Arabian Free Trade Area (GAFTA).

FALSE The Baltic states shared a legacy of inefficient industry and Soviet-style command economies.

The Baltic States had a history of a free trade regime.

TRUE The CIS is a loose economic and political alliance with open borders but no central government.

The CIS is a loose economic and political alliance with open borders but no central government.

FALSE The Commonwealth of Independent States (CIS) was formed by the republics of the former Soviet Union, and the European Union (EU).

The Commonwealth of Independent States (CIS) was formed by Britain because it did not want to join the European Economic Community (EEC).

B The CIS is a loose economic and political alliance with open borders but no central government.

The Commonwealth of Independent States is: A. a political alliance with a central government. B. an economic and political alliance with open borders and no central government. C. an economic and political alliance with closed borders and a federal government. D. a federation of many states. E. a supranational organization similar to the old European community.

B The Czech Republic, Hungary, the Slova Republic, and Poland have become members of the OECD.

The Czech Republic, Hungary, the Slova Republic, and Poland have become members of the ____. A. UNDP B. OECD C. WTO D. EU E. APE

D The European Union's institutions form a federal pattern with executive, parliamentary, and judicial branches: the European Commission, the Council of Ministers, the European Parliament, and the Court of Justice respectively.

The European Commission, the Council of Ministers, the European Parliament, and the Court of Justice are institutions of the ____. A. COMECON B. European Free Trade Area C. European Economic Area D. European Union

D Directives are a kind of legal instrument that is used by the EU. They are binding on the member states but allow them to choose the means of execution.

The European Community uses several forms of legal instruments. Which of the following has the effect of binding member states but allowing them to choose the means of execution? A. Regulations B. Decisions C. Codes D. Directives E. Specifications

D The European Court of Justice (ECJ) is called the European Union's Supreme Court because its decisions are final and cannot be appealed in national courts. It is responsible for challenging any measures incompatible with the Treaty of Rome and for passing judgment, at the request of a national court, on the interpretation or validity of points of EU law.

The European Court of Justice is the European Union's ____. A. criminal court B. regional civil court C. war crimes court D. Supreme Court E. judicial court

D A broader preoccupation for the EU is the prospect of illegal immigrants from former Soviet states surging across poorly guarded borders of the newer and/or candidate states and ma ing their way farther west within the EU. The EU is demanding that borders be sealed, but the new and candidate states are reluctant to jeopardize relations with neighboring communities.

The European Union is anxious to admit new members; however, there have been problems. Which of the following problems has been deemed to be the most significant regarding new member admission? A. The threat of nuclear war B. The problem of multiple currencies C. The rise of Asia in the world arena D. The prospect of illegal immigrants from the former Soviet Union E. The economic instability of prospective members

E The European Union was created when the 12 nations of the European Community ratified the Maastricht Treaty.

The European Union was created when the 12 nations of the European Community ratified the _____ Treaty. A. Kent B. Paris C. Rome D. Cannes E. Maastricht

FALSE The Middle East has been less aggressive in the formation of successfully functioning multinational mar et groups.

The Middle East has been very aggressive in forming multinational mar et groups.

C The Treaty of Rome, which established the European Economic Community (EEC) in 1957, called for common external tariffs and the gradual elimination of intra-market tariffs, quotas, and other trade barriers.

The Treaty of _____ established the European Economic Community (EEC) in 1957 and called for common external tariffs and the gradual elimination of intra-market tariffs, quotas, and other trade barriers. A. Kent B. Paris C. Rome D. Cannes E. Hamburg

TRUE the World Trade Organization, with its 153 members and 30 observers, is wholly dedicated to ma ing trade among nations more efficient.

The WTO is wholly dedicated toward ma ing trade among nations more efficient.

E The World Trade Organization, with its 153 members and 30 observers, is wholly dedicated to making trade among nations more efficient.

The World Trade Organization is wholly dedicated to ____. A. the expansion of capitalism B. the elimination of language barriers in trade C. free and open national borders D. the enforcement of international anti-bribery laws E. making trade among nations more efficient

E A customs union enjoys the free trade area's reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the union.

The _____ has reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the group. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA)

E The Amsterdam Treaty increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members.

The _____ increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members. A. Treaty of Rome B. Single European Act C. Maastricht Treaty D. NAFTA E. Amsterdam Treaty

C The European Commission initiates policy and supervise its observance by member states, and it proposes and supervises the execution of laws and policies.

The _____ initiates policy and supervises its observance by member states, and it proposes and supervises the execution of laws and policies. A. United Nations B. World Trade Organization C. European Commission D. Commonwealth Delineation E. Council of Ministers

B The European Court of Justice (ECJ) is the European Union's Supreme Court. It is responsible for challenging any measures incompatible with the Treaty of Rome and for passing judgment, at the request of a national court, on the interpretation or validity of points of EU law.

The _____ is the European Union's Supreme Court . A. International Court of Justice B. European Court of Justice C. International Criminal Court D. Brussels Judicial Council E. Security Council

E The Council of Ministers is the decision-making body of the EU; it is the Council's responsibility to debate and decide which proposals of the Single European Act to accept as binding on EU members. The Council can enact into law all proposals by majority vote except for changes in tax rates on products and services, which require unanimous vote.

The _____ is the decision-making body of the EU and can enact into law all proposals by majority vote except for changes in tax rates on products and services, which require unanimous vote. A. United Nations B. World Trade Organization C. European Commission D. Commonwealth Delineation E. Council of Ministers

B The European Parliament originally had only a consultative role that passed on most European Union legislation. However, it can now amend and adopt legislation.

The _____ originally had only a consultative role that passed on most European Union legislation but now has the power to amend and adopt legislation. A. Court of Justice B. European Parliament C. Council of Ministers D. European Commission E. Legislative Commission

TRUE The Treaty of Rome established the European Economic Community. The European Union is an extension of the EEC.

The blueprint for the European Union began with the Treaty of Rome in 1957.

A A Political union is the most fully integrated form of regional cooperation.

The most fully integrated form of regional cooperation is called a: A. political union. B. common market. C. regional cooperation for development (RCD). D. customs union. E. free trade area (FTA).

C The Maastricht treaty allows for the free movement of goods, persons, services, and capital throughout the member states of the European community; a common currency; common foreign and security policies, including defense; a common justice system; and cooperation between police and other authorities on crime, terrorism, and immigration issues.

The final step in the European Community's march to union was ratification of the _____ Treaty (1992). A. Rome B. Berlin C. Maastricht D. Barcelona E. Athens

TRUE The initial aim of a multinational mar et is to protect businesses that operate within its borders.

The initial aim of a multinational market is to protect businesses that operate within its borders.

C The European Union's institutions form a federal pattern with executive, parliamentary, and judicial branches.

The institutions of the European Union form a _____ pattern. A. bilateral B. unitary C. federal D. provincial E. autonomous

C Creation of a common currency among member states made trade between them easier.

The introduction of euro banknotes and coins facilitated: A. international corruption. B. political dialogue . C. market exchanges. D. industrial production. E. international promotion.

TRUE The Southern African Development Community is the most advanced and viable of

The most advanced and viable of Africa's regional organizations is called the Southern African Development Community.

C The most basic economic integration and cooperation is the regional cooperation for development (RCD). In the RCD arrangement, governments agree to participate jointly to develop basic industries beneficial to each economy.

The most basic economic integration and cooperation is the: A. political union. B. common market. C. regional cooperation for development (RCD). D. customs union. E. free trade area (FTA).

FALSE The most basic level of economic integration and cooperation is the regional cooperation for development (RCD).

The most basic level of economic integration and cooperation is geographical local federation (GLF).

B

The official European Union abbreviation for the euro is ____. A. E B. EUR C. Euro D. E$ E. EU

TRUE Political union is the most fully integrated form of regional cooperation. It involves complete political and economic integration, either voluntary or enforced.

The political union is the most fully integrated form of regional cooperation.

B Cultural similarity eases the shock of economic cooperation with other countries. The more similar the culture, the more likely an agreement is to succeed, because members understand the outlook and viewpoints of their colleagues. Although there is great cultural diversity in the European Union, ey members share a long-established Christian heritage and are commonly aware of being European.

The similarity of cultures can make or break an economic union. Although there is great cultural diversity in the European Union, key members share _____ and are commonly aware of being European. A. a common language B. a long-established Christian heritage C. a dislike for foreigners D. a tradition of monarchy and feudalism E. a democratic background and heritage

B After the dissolution of the Soviet Union, the first Soviet republics to declare independence were the Baltic states, which quickly gained recognition by several Western nations. The remaining 12 republics of the former USSR, collectively known as the Newly Independent States (NIS), regrouped into the Commonwealth of Independent States.

The ties that bind members of the _____ stem mainly from their former Soviet membership. A. European Trade Pact B. Commonwealth of Independent States C. Central European Free Trade Area D. The Eurasian Alliance E. The Post-Soviet Bloc

D The most notable enforced political union was the Council for Mutual Economic Assistance (COMECON), a centrally controlled group of countries organized by the Soviet Union.

Though now disbanded, which of the following was considered to be the most notable enforced political union of the last forty years? A. NATO B. NAFTA C. MERCOSUR D. COMECON E. LAFTA

B A trade group that emerged and persisted since the dissolution of the Soviet Union is the Commonwealth of Independent States (CIS).

When the Soviet Union dissolved, it was replaced by the _____ that had 12 members that agreed to a loose economic and political alliance with open borders but no central government. A. European Trade Pact B. Commonwealth of Independent States C. The Eurasian Alliance D. The Russian Confederation E. The Post-Soviet Bloc

E The EMU, a provision of the Maastricht Treaty, established the parameters of the creation of a common currency for the EU, the euro.

Which agency established the parameters for the creation of the common currency for the EU? A. Economic policy agency B. Optimal currency area eurozone C. Economy of Europe D. Monetary Union E. Economic and Monetary Union

B Europe (and Asia) has one other trade group that has emerged and persisted since the dissolution of the Soviet Union: the Commonwealth of Independent States (CIS).

Which is the trade group that is part of Europe and Asia that has emerged and persisted since the dissolution of the Soviet Union? A. The European Union East B. The Commonwealth of Independent States C. The Eastern Bloc Economic Area D. The European Free Trade Association E. The Euro-Soviet Union

E

Which of the following is true regarding multinational markets? A. Large markets do not lead to marketing efficiencies. B. Large markets cannot achieve economies of scale. C. Large markets are particularly important to businesses not accustomed to mass production. D. Economic integration creates smaller markets. E. Despite the problems that are sure to occur because of integration, the economic benefits from free trade can be enormous.

C The Amsterdam Treaty increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members.

Which of the following treaties followed the Maastricht Treaty (1992) and established procedures for expansion to Central and Eastern Europe? A. Versailles Treaty B. London Treaty C. Amsterdam Treaty D. Monaco Treaty E. Paris Treaty

C

Which of these is the most advanced and viable of Africa's regional organizations? A. Economic Community of West African States B. African Development Ban C. Southern African Development Community D. Organization of African Unity E. Economic Community of Central African States

A A common market is a unified economy and lac s only political unity to become a political union.

Which of these levels of economic integration lacks only political unity to become a political union? A. Common market B. Free trade area C. Regional cooperation group D. Customs union E. Trade friendly zone

D Before entering into an economic union, a country should be clear about the advantages of the economic union. Moreover, the benefits must greatly outweigh the disadvantages before nations forgo any part of their sovereignty. It is therefore implied that state sovereignty is a cherished possession of any nation.

With respect to political factors, which of the following is one of the most cherished possessions of any nation? A. A two party system B. A three party system C. A high voting rate D. State sovereignty E. A benevolent upper class

B The EU is apprehensive about the infiltration of illegal immigrants from former Soviet states surging across poorly guarded borders of the newer and/or candidate states and ma ing their way farther west within the EU. Moreover, EU fears a flood of cheap labor even if the borders are closed.

With the expansion of the European Union, existing members fear: A. retaliation against members by the Soviet Union. B. a flood of cheap labor into their countries. C. OPEC will cut off supplies to countries supporting expansion of the EU. D. new political leaders will overwhelm the existing leadership. E. dilution of the Euro.

E

Yugoslavia has been facing internal strife due to: A. land issues B. class war C. high inflation D. economic recession E. ethnic strife

A South Africa has the potential to become the newest big emerging mar et (BEM), but its development will depend on government action and external investment by other governments and multinational firms.

_____ has the potential to become the newest big emerging market (BEM), but its development will depend on government action and external investment by other governments and multinational firms. A. South Africa B. South America C. East Asia D. West Asia E. South Asia

B NAFTA is an acronym for North American Free Trade Agreement.

_____ is a comprehensive trade agreement that addresses, and in most cases improves, all aspects of doing business within North America. A. CETA B. NAFTA C. NATO D. MERCOSUR E. LAFTA

TRUE The EU was created upon ratification of the Maastricht Treaty by 12 nations of the European Community.

the European Union was created when the 12 nations of the European Community ratified the Maastricht Treaty.