Chapter 08 Capitalizing on Global and Regional Integration

Which of the following statements is true of the TPP? a. Its stands for Trans-Political Parity b. It is a multilateral free trade agreement being negotiated by 12 Asia Pacific countries. c. It was creates in response to APEC's success. d. It seeks to reduce globalization

b. It is a multilateral free trade agreement being negotiated by 12 Asia Pacific countries.

Which of the following steps will help managers capitalize on opportunities at regional and global levels? a. Managers should base their strategies solely on economic changes. b. Managers should consider trade politics at the regional level. c. Managers should focus more at a global level than at a regional level. d. Managers should focus on accelerating multilateralism.

b. Managers should consider trade politics at the regional level.

Efforts to reduce trade and investment barriers within one region are known as _____. a. the General Agreement on Tariffs and Trade b. Regional Economic Integration c. Global Economic Integration d. North American Free Trade Agreement

b. Regional Economic Integration

_____ is an example of a free trade area (FTA). a. Andean Community in South America b. The Eurasian Union c. The former Soviet Union d. The European Union (EU)

b. The Eurasian Union

Which of the following was the major contribution of the General Agreement on Tariffs and Trade (GATT) to global trade? a. The GATT promoted absolute free trade in textiles. b. The average tariff on trade in developed economies dropped. c. World gross domestic product (GDP) growth consistently outpaced world trade growth. d. The GATT covered trade in both intellectual property and services.

b. The average tariff on trade in developed economies dropped.

In 1957, six member countries of European Coal and Steel Community (ECSC) signed the _____, which launched the European Economic Community (EEC). a. Treaty of Versailles b. Treaty of Rome c. Treaty of Lisbon d. Treaty of Accession

b. Treaty of Rome

The World Trade organization (WTO) settles trades disputes by: a. changing trade laws in countries accused of violating trade rules. b. authorizing winning countries to use tariff retaliation. c. legally enforcing its decision on countries accused of violating trade rules. d. setting an indefinite time limit for a panel to resolve disputes.

b. authorizing winning countries to use tariff retaliation.

Combining everything a customs union has, a ______ additionally permits the free movement of goods and people. a. free trade area b. common market c. monetary union d. political union

b. common market

A _____ is a group of countries that remove trade barriers among themselves. a. protectionist zone b. free trade area (FTA) c. special economic zone (SEZ) d. free market

b. free trade area (FTA)

Unlike the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO): a. increases tariff barriers to trade. b. has an agreement governing the international trade of services. c. authorizes accused countries in trade disputes to block unfavorable trade decisions. d. has the power to enforce its decision.

b. has an agreement governing the international trade of services.

Which of the following is an economic benefit of global economic integration? a. Promotes peace b. Builds confidence in a multilateral trading system c. Disputes are more difficult to resolve d. Free trade and investment raise incomes and stimulate economic growth

d. Free trade and investment raise incomes and stimulate economic growth

Which of the following is an advantage of adopting the euro as a common currency for the European Union (EU)? a. It allows the printing of more currency during recessions. b. It facilitates the implementation of independent monetary policies. c. It allows flexibility in implementing fiscal policies in areas such as deficit spending. d. It reduces currency conversion costs.

d. It reduces currency conversion costs.

_____ is a crucial principle in the multilateral trading system. a. Economic disintegration b. Conservatism c. Protectionism d. Non-discrimination

d. Non-discrimination

A _____, one step beyond a free trade area (FTA), imposes common external policies on nonparticipating countries in addition to all the arrangements of an FTA. a. euro zone b. trans-Pacific partnership c. monetary union d. customs union

d. customs union

Which of the following statements is NOT true of APEC? a. has 21 member economies b. is the largest regional integration grouping by both geographic area and GDP c. is criticized for being is too big to function d. refused to allow the United States, Canada and Mexico to join

d. refused to allow the United States, Canada and Mexico to join

Which of the following statements is true of an economic union? a. It has all the features of a common market. b. North American Free Trade Agreement (NAFTA) is an example of an economic union. c. It is the integration of the economic and political affairs of a region. d. Andean Community in South America is an example of an economic union.

a. It has all the features of a common market.

Which of the following is a customs union in South America? a. Andean Community b. Salvador Community c. Mercantilist Community d. Trinidad and Tobago Community

a. Andean Community

Globally, the _____ was created in 1948 as a multilateral agreement governing the international trade of goods. a. General Agreement on Tariffs and Trade b. European Union c. World Trade Organization d. North American Free Trade Agreement

a. General Agreement on Tariffs and Trade

Why did the trade facilitation agreement (TFA) Collapse? a. India withdrew its support citing food security. b. Dispute resolution mechanisms did not have any teeth. c. Loopholes in merchandise trade needed reform. d. IP rights were not protected.

a. India withdrew its support citing food security.

Which of the following is a reason that six founding members—Belgium, France, (West) Germany, Italy, Luxembourg, and the Netherlands—signed the European Coal and Steel Community (ECSC) in 1951? a. Integrating coal and steel industries might help prevent future hostilities between France and Germany. b. They wanted to form a monetary union. c. It allowed flexibility in implementing international fiscal policies. d. to ease tensions between Italy and Luxembourg

a. Integrating coal and steel industries might help prevent future hostilities between France and Germany.

Which of the following statements is true of the Doha Development Agenda? a. It aimed at slashing tariffs in industries that developing countries might benefit. b. It proposed that World Trade Organization (WTO) should have the power enforce its decision. c. It aimed to increase agricultural subsidies in developing countries. d. It proposed protectionist policies to promote trade in services.

a. It aimed at slashing tariffs in industries that developing countries might benefit.

Which of the following is a political advantage of global economic integration? a. It builds confidence in a multilateral trading system. b. It increases tariffs in a multilateral trading system. c. It promotes protectionist policies in a multilateral trading system. d. It increases quotas in a multilateral trading system.

a. It builds confidence in a multilateral trading system.

Which of the following statements is true of the European Union (EU) today? a. It is an economic union. b. It is a political union. c. A passport is required to travel between any of the countries of the EU. d. A drawback of the EU is that the euro has negatively affected intra-EU trade.

a. It is an economic union.

From a resource-based view, which of the following steps should managers take to establish a successful enterprise? a. Managers should focus more at a regional level. b. Managers should focus on accelerating multilateralism. c. Managers should focus less on cultural differences. d. Managers should abandon their global strategies.

a. Managers should focus more at a regional level.

_____ is a free trade area (FTA) among Canada, Mexico, and the United States. a. North American Free Trade Agreement (NAFTA) b. The Union of South American Nations (USAN) c. The Central America Free Trade Agreement (CAFTA) d. Closer Economic Relations (CER)

a. North American Free Trade Agreement (NAFTA)

What effect did World War II have on the progress of global economic integration? a. The devastation of WWII helped to unify the world behind the fundamental goal of global economic integration—promoting peace. b. Slowed progress c. More trade wars broke out in the aftermath of WWII, halting progress. d. Prompted the founding of the WTO

a. The devastation of WWII helped to unify the world behind the fundamental goal of global economic integration—promoting peace.

Which of the following is a reason that NAFTA did not receive unanimous support from the American public? a. fear of losing jobs b. fear of immigration c. NAFTA could compromise American political sovereignty d. the potential for conflict with China

a. fear of losing jobs

The Doha Round was suspended because: a. Japan agreed to cut rice tariffs. b. developing countries' access to generic drugs was restricted. c. Japan, the United States, and the EU refused to reduce farm subsidies. d. developing countries provided concessions in intellectual property (IP) protection.

c. Japan, the United States, and the EU refused to reduce farm subsidies.

Which of the following was a major reason for GATT reform in the 1980s? a. Nontariff barriers, such as subsidies and local content requirements, were not being utilized under GATT. b. The GATT dispute resolution mechanisms were effective on the world stage. c. Loopholes in merchandise trade, including the Multifiber Arrangement, needed reform. d. The GATT covered trade in both intellectual property and services.

c. Loopholes in merchandise trade, including the Multifiber Arrangement, needed reform.

Which of the following changes was brought about by the General Agreement on Tariffs and Trade (GATT) on global trade as a result of the 1970s and 80s recession? a. The GATT members refused to upgrade GATT to the World Trade Organization (WTO). b. Tariffs on trade increased. c. Nontariff barriers were introduced. d. Trade disputes among countries were resolved.

c. Nontariff barriers were introduced.

_____, launched in 1983, turned the historic rivalry between Australia and New Zealand into a partnership. a. The General Agreement on Tariffs and Trade (GATT) b. Andean Community c. The Closer Economic Relations (CER) d. The Trans Pacific Partnership (TPP)

c. The Closer Economic Relations (CER)

The Doha Round was significant because it: a. was set on an agenda of promoting protectionist policies. b. was launched just before the 9/11 terrorist attacks in the United States. c. aimed at promoting economic development in developing countries. d. proposed increasing agricultural subsidies in developed countries.

c. aimed at promoting economic development in developing countries.

In the context of regional economic integration, the United States is an example of a _____. a. customs union b. common market c. political union d. monetary union

c. political union

In 2008, Andean Community and Mercosur countries agreed to form the _____. a. Closer Economic Relations (CER) b. Trans-Pacific Partnership (TPP) c. Central America Free Trade Agreement (CAFTA) d. Union of South American Nations (USAN)

d. Union of South American Nations (USAN)