Chapter 3 MC

E

41) Open markets are one way that globalization has led to economic integration. The United States and South Korea recently completed negotiations on the world's largest bilateral trade agreement. The deal will result in: A) a trade conference to be held once every year. B) increase in tariffs for all product categories. C) a series of multilateral trade negotiations among neighboring countries. D) increase in trade gap between South Korea and the United States. E) reduction of tariffs on about 90 percent of product categories.

B

42) The World Trade Organization, which came into existence on January 1, 1995, is the successor of another organization with the abbreviation: A) DSB. B) GATT. C) FTAA. D) NAFTA. E) ASEAN.

D

43) Which form of regional cooperation agreement, when fully implemented, entails creation of a unified central bank, the use of a single currency, and common policies on agriculture, social services and welfare? A) free trade area B) customs union C) common market D) economic union E) dispute settlement body

C

62) Which of the following ASEAN countries ranks number one in terms of two-way trade with the United States? A) Brunei B) Malaysia C) Singapore D) Thailand E) Vietnam

B

63) The new country that joined EU on January 01, 2009 is: A) Romania. B) Slovakia. C) Bulgaria. D) Slovenia. E) Cyprus.

C

64) Which of the following is not a member of the European Union? A) Sweden B) Austria C) Switzerland D) Italy E) Greece

B

65) The Maastricht Treaty called for: A) the creation of an Asia Free Trade Area (AFTA). B) the creation of an economic and monetary union (EMU) in Europe. C) Chile's acceptance into Mercosur. D) the purchase of CDs and tapes from distributors in Europe. E) the creation of the seven-nation European Free Trade Association (EFTA).

A

66) The introduction of Euro by EU resulted in multifaceted advantages which include: A) elimination of costs associated with currency conversion. B) fixed exchange rate worldwide. C) elimination of paper currency and coins. D) withdrawal of French Francs from circulation. E) a choice for using local or European currency.

E

67) Management strategic options pertaining to products that are facilitated by a single European market include: A) standardized packaging and labeling. B) consolidate production. C) shift from brand to benefit segmentation. D) seek marketing economies. E) all of the above

C

68) The practice of transshipment under the single European market helped the music industry by: A) helping online downloading of music by customers. B) allowing music retailers in Europe to buy CDs from a single distributor. C) forcing major record companies to adopt uniform pricing policies across Europe. D) allowing record companies to decide on price based on cost in each country. E) letting record companies to maintain their own distribution system.

C

69) The enlargement of the EU has impacted marketing strategies in the Euro zone countries by: A) making it difficult to export food products from one country to another. B) increasing the cost of production since Euro replaced local currency. C) shifting products from one market to another in the event of shortages. D) reduced tariffs and quotas for products imported from non-EU members. E) having less flexibility in the placement of factories.

C

70) The markets of Central and Eastern Europe present interesting opportunities and offer attractive locations for low-cost manufacturing due to: A) their location being close to sea. B) the cultural similarities. C) wage rates being lower than in Spain, Portugal and Greece. D) strict laws and regulations. E) prohibitive tariffs and export restrictions.

C

71) The country in the middle east which ranks highest in terms of freedom is: A) Kuwait. B) Saudi Arabia. C) Bahrain. D) Iraq. E) Oman.

C

72) Political and social instability in the Middle Eastern region can primarily be attributed to: A) desert conditions and lack of agricultural land. B) cultural differences among nations. C) a wide gap between rich and poor nations due to oil revenues. D) lack of water purification facilities. E) absence of Western corporations.

E

73) The member of the Gulf Cooperation Council (GCC) with the largest economy and population size is: A) Bahrain. B) Kuwait. C) Oman. D) Qatar. E) Saudi Arabia.

C

74) In spite of having about 45% of the world's known oil reserves, Saudi Arabia and other Middle Eastern countries post current-account deficits, largely because: A) of poor accounting practices. B) of vast economic diversification. C) they must import most of the goods and services. D) most of the oil is exported. E) new businesses are being developed.

C

75) The Middle East and North Africa are sometimes viewed as a regional entity referred to as: A) GCC. B) AMU. C) MENA. D) ACC. E) ECOWAS.

D

76) In recent years, the economy of selected countries in ECOWAS has improved except in: A) Ivory Coast. B) Ghana. C) Benin. D) Sierra Leone. E) Nigeria.

B

77) In order to form a free trade area, South Africa has been in discussion with: A) Swaziland. B) EU. C) Namibia. D) Angola. E) Japan.

D

78) The highest GNP among ECOWAS members is found in ________, a country that generates significant revenues from oil exports: A) Ghana B) Niger C) Mauritania D) Nigeria E) Senegal

A

79) In 2003 South Korea decided to lift the ban on U.S. beef and in return the United States agreed to exclude South Korea's rice industry from trade agreement because: A) a high import tariff means that local rice farmers can charge much higher prices for their crops than farmers in other rice-producing countries. B) rice is not a very popular food commodity in the United States. C) beef is not a very popular food item in South Korea. D) South Korea was more interested in selling rice to other rice-producing countries. E) no correct answer

D

80) The Ecuadorian government and the National Parks Service have maintained strict rules for protecting Galapagos Island, an ecotourism destination, which includes all of the following except: A) all tourists must be accompanied by tourist guides. B) there is a $ 100 per person entrance fee to the park. C) visitors must follow a strict itinerary. D) limits on the seafood harvested by local population. E) visitors are limited to the fifty designated sites on the island.

D

44) Arrange the following in order from lowest to highest level of economic integration. A) customs union→economic union→free trade area→common market B) economic union→customs union→common market→free trade area C) common market→free trade area→economic union→customs union D) free trade area→customs union→common market→economic union E) common market→economic union→customs union→free trade area

C

45) The form of economic cooperation that calls for 1) eliminating internal barriers to trade and 2) establishing common external barriers is known as a(n) ________ . A) free trade area B) economic union C) customs union D) free trade area E) common market

A

46) As a result of CFTA the U.S. automakers participate in the Canadian auto market, thereby benefiting due to: A) greater economies of scale. B) decreased production costs. C) reduced competition. D) ease of exporting automobiles. E) creating a continental demand.

C

47) The form of economic cooperation that calls for countries to eliminate all internal barriers to trade among themselves even while maintaining independent trade policies vis-à-vis third countries is known as a(n) ________ : A) economic union B) customs union C) free trade area D) common market E) none of the above

B

48) A new bilateral agreement between the European Union and Turkey will eliminate internal trade barriers and establish common external tariffs. This arrangement is a(n): A) free trade area. B) customs union. C) common market. D) economic union. E) none of the above

A

49) Agricultural subsidies and quotas that developed outside the multilateral framework under GATT remained a divisive issue because: A) affluent countries protect and subsidize farm production. B) home-market consumers pay lower prices. C) surplus agricultural output is sold abroad at high prices. D) agricultural land became scarce in some countries. E) American farmers did not participate in export.

B

50) NAFTA creates a free trade area, as opposed to a customs union or a common market, due to the fact that: A) the agreement does not leave the door open for discretionary protectionism. B) the governments of all three nations decided to eliminate tariffs. C) the issue of illegal immigration from Mexico to the United States is resolved. D) restrictions are imposed on the use of goods, services, and investments. E) restrictions are imposed on labor movements among members.

E

51) The most important preferential trading arrangements in Latin America do not include: A) SICA. B) the Andean Community. C) CARICOM. D) Mercosur. E) BRIC.

E

52) The United States and Canada are bound together by many things, including a trade agreement, a shared border, and a common language. However, from the cultural point of view, many Canadians are worried of certain trade-related issues such as: A) statistics indicating that 95 percent of the movies shown in theaters are not Canadian. B) statistics indicating that 84 percent of the recorded music that Canadians buy is foreign. C) Canadians fear that their own industries will not be able to survive the global juggernaut originating south of the border. D) foreign ownership of the book publishing business. E) all of the above

C

53) Which member of the Central American Integration System has both the largest economy and the largest population? A) El Salvador B) Honduras C) Guatemala D) Nicaragua E) Costa Rica

D

54) Implementation of the Central American Free Trade Agreement with the United States created a free trade area known as DR-CAFTA that includes all SICA members except: A) Honduras. B) Guatemala. C) Nicaragua. D) Panama. E) Costa Rica.

C

55) As a result of America's failure to follow through on its promises in the Latin American region, Mercosur, CARICOM, SICA, and the Andean Community intend to pursue further integration among themselves as well as with: A) Russia. B) China. C) Europe. D) Asia. E) Australia.

B

56) Which of the Andean Community members adopted the U.S. dollar as official currency? A) Bolivia B) Ecuador C) Colombia D) Peru E) Venezuela

B

57) Argentina provides a good example of how a country can emerge from an economic crisis as a stronger global competitor. An example of emergency measures implemented by Argentina include: A) Argentina reduced the duties on consumer goods. B) Argentina devalued its currency for exports and capital transactions. C) Argentina added tariffs on imported wines. D) Argentina adapted U.S. dollar as official currency. E) Argentina added tariffs on wine produced within the country.

C

58) "ASEAN plus three" refers to the expanded roster of members which include: A) all ASEAN members and Australia, New Zealand, and India. B) all ASEAN members and Canada, Japan, and India. C) all ASEAN members and Japan, China, and Korea. D) all ASEAN members and India, Bangladesh, and Pakistan. E) all ASEAN members and Australia, Korea, and China.

C

59) There are barriers in Japan for global marketers in terms of attitudes as well as laws. Barriers include all of the following except: A) any organization wishing to compete in Japan must be committed to providing top-quality products and services. B) repeat visits and extended socialization with distributors. C) goods marketed should have a semblance of western products and services. D) marketers must master the keiretsu system of tightly knit corporate alliances. E) trust has to be built before conducting successful business.

D

60) The business environment in Europe has undergone considerable transformation with significant implications for all elements of the marketing mix, which includes all of the following except: A) harmonization in product standards, testing and certification process. B) creating a more competitive environment. C) direct comparability of prices in the Euro zone. D) transshipment of products are not permitted. E) common guidelines on TV broadcasting.

E

61) Markets of Central and Eastern Europe present interesting opportunities and challenge. Companies such as 3M International, McDonald's, Philips Electronics, and Henkel are moving into the region for all of the following reasons except: A) the region is an important new source of growth. B) that the first company to penetrate a country market often emerges as leader. C) wage rates are much lower than those in Spain, Portugal, and Greece. D) the region offers attractive locations for low-cost manufacturing. E) core products and Western brand names need changes to meet consumer demands.