International Marketing Ch. 10

Identify the legal instruments employed by the European Union. (Check all that apply.)

1. Regulations binding the member states directly and having the same strength as national laws 2. Decisions addressed to a government, an enterprise, or an individual, binding the parties named 3. Directives binding the member states but allowing them to choose the means of execution

Identify the factors that require market potential to be evaluated regionally rather than by individual country. (Check all that apply.)

1. The worldwide trend toward economic cooperation 2. The dissolution of the Soviet Union into independent states 3. Enhanced global competition

Identify the provisions of the Maastricht Treaty, which served as the basis of the European Union.

1. common currency 2. common justice system 3. Common foreign and security policies 4. Cooperation on crime, terrorism, and immigration issues 5. Free movement of goods, services, capital and labor across member countries

Which stage of economic integration eliminates all restrictions on internal trade, imposes common external tariffs, and allows free flow of capital and labor among member countries?

A common market

Members of an economic union have formed a free trade area. In this case, which stage of economic integration will the members enter before they are able to form a common market?

A customs union

How do economic unions develop and enlarge markets for member countries?

By providing assured outlets for goods manufactured by member countries

True or false: The formation of an economic union is independent of the political orientation of member countries.

False

Identify a factor that facilitates the success of an economic union.

Geographic and temporal proximity of member nations

Identify an accurate statement about a commonwealth.

Heads of member countries are required to meet every three years to discuss trade.

Identify a feature of a common market.

It allows capital and labor to move freely across member countries.

Identify a function of the European Parliament.

It is involved in the expenditures made by the European Union.

Identify a characteristic of a customs union.

It reduces customs duties and nontariff trade barriers among member countries.

The European Union was formed when 12 countries signed the _____ Treaty.

Maastricht

Why did skeptics initially believe that the European Union would fail?

Members had different languages and culture.

Which institution of the European Union is responsible for deciding which proposals of the Single European Act will apply to member states?

The Council of Ministers

Which institution of the European Union initiates policies and oversees their adoption by member states?

The European Commission

Which economic union was formed in 1958 and led to the emergence of multinational markets?

The European Economic Community

Which European Union institution can amend and adopt legislation but cannot initiate it?

The European Parliament

Which multinational market group is the most cooperatively secure and economically important?

The European Union

Identify a prerequisite for a successful economic union.

The benefits of economic integration should outweigh member countries' differences.

How do multinational markets influence their member states?

They reduce trade barriers among member nations.

The ultimate aim of the European Union is to

achieve the political union of member countries.

Agreements between member countries of an economic union are more likely to succeed if the members

are culturally similar.

The members of the European Commission are responsible for _____.

ensuring that member states comply with the principles of the common market

An agreement between two or more countries to reduce customs duties and nontariff trade barriers among member countries while they impose individual tariffs on goods from external countries is known as a _____.

free trade area

Member countries of an economic union must

have similar political aspirations.

An economic union must _____.

have the requisite mechanisms to settle economic disputes

A political union

involves complete political and economic integration.

A characteristic of a commonwealth is that _____.

it is formed voluntarily and is not enforced

One of the obstacles that the European Union faced was that

members adopted restrictive policies to protect local national markets.

A group of countries that decreases interregional trade and tariff barriers in order to gain mutual economic benefit forms a _____.

multinational market region

The most fully integrated form of economic and regional cooperation is a(n)

political union

Economic unions enlarge markets by _____.

providing preferential tariff treatment to member countries

A free trade area _____.

reduces nontariff trade barriers among member countries

The simplest grouping for economic integration and cooperation is the _____.

regional cooperation for development group

Economic unions tend to be successful if member countries

share a cultural heritage.

The European Union's Supreme Court is _____.

the European Court of Justice

The formation of multinational market regions has been encouraged by _____.

the transition to a free market system

In a regional cooperation for development arrangement, countries

work together to develop basic industries that benefit each of them.