Global Business Chapter 3 Exam

According to the text, which of the following is NOT a regional bloc close to world markets? a. Russia b. Singapore c. Chile d. Vietnam e. Guatemala

a. Russia

Of the following statements about regional blocs close to major world markets, which is NOT true? a. The oil-rich regional economy of the Middle East and North Africa has been growing fast and creating jobs for its population. b. The ASEAN is intensifying its free trade relations with the huge markets in China. c. Access to markets is essential for economic growth. d. Countries close to major markets have the advantage of connecting to suppliers and ideas. e. India, Japan, and South Korea play an important role in the SAARC.

a. The oil-rich regional economy of the Middle East and North Africa has been growing fast and creating jobs for its population.

Both common markets and economic unions abolish restrictions on factor movements. a. True b. False

a. True

Generally, countries within trading blocs that have significantly lowered trade barriers have done better economically than others. a. True b. False

a. True

In 1969, frustrated by the lack of progress in LAFTA, Bolivia, Chile, Colombia, Ecuador, and Peru joined in creating the Andean Group, which aimed to create economic integration through reduced taxes, a common external tariff, and investment in the poorer industrial areas of their respective countries. a. True b. False

a. True

In 2003, ASEAN leaders agreed to establish an ASEAN Community based on three pillars: ASEAN Security Community; ASEAN Economic Community; and ASEAN Socio-Cultural Community. a. True b. False

a. True

NAFTA is a comprehensive free-trade agreement among Canada, United States, and Mexico that addresses issues ranging from protection of workers' rights and the environment to phased reduction of tariff and non-tariff trade barriers, which were finally eliminated in 2009. a. True b. False

a. True

Remote regions with small local markets which Paul Collier calls the "bottom billion," are located in Central Asia; East, Central and West Africa; and the Pacific Islands. a. True b. False

a. True

The World Bank's World Development Report (WDR), titled "Reshaping Economic Geography," analyzes trade and regional economic integration through the lens of economic geography (i.e., market size, location, and openness to trade). The WDR concludes that positive changes within these three categories are essential for successful regional integration. a. True b. False

a. True

The appropriate approach for countries interested in regional integration could include the following three fundamentals: start small, think global, and compensate the least fortunate. a. True b. False

a. True

Through various treaties (e.g, the Treaty of Rome, Maastricht Treaty, Copenhagen Treaty, Treaty of Nice, the Lisbon Treaty), the EU is deepening and strengthening its institutional linkages; it is hoped that this will enable the EU to act as one country that will effectively compete with the U.S. a. True b. False

a. True

With uncertainty surrounding the outcome of the Doha Round of trade negotiations, countries (large and small) are clamoring for bilateral or regional trade agreements to meet their specific agendas causing economists to be concerned about the prospects of creating a truly open global economic system that benefits all countries. a. True b. False

a. True

Three countries, X, Y, and Z are part of a member area where they have eliminated all barriers to trade such as tariffs, quotas, and non-tariff barriers like border restrictions, while at the same time keeping their own external tariffs against nonmembers. Such an area could be described as a(n) _____ area. a. free trade b. regional c. spatial d. embargo e. open trade

a. free trade

The union created when member countries of an economic and monetary union work closely with one another to arrive at common defense and foreign policies and behave as a single country is known as a(n) _____. a. political union b. free trade area c. customs union d. common market e. economic union

a. political union

ASEAN has two main objectives: 1) to accelerate economic growth, social progress, and cultural development in the region; and 2) _____. a. to promote regional peace and stability b. to trade with NAFTA c. to cover Asian countries to use of the euro d. to become a world power e. to create more countries in Asia

a. to promote regional peace and stability

As a means to push NAFTA south of Mexico, the Bush administration began free-trade talks with all of the following countries EXCEPT a. ​Haiti. b. ​Nicaragua. c. ​the Dominican Republic. d. ​Honduras. e. ​Costa Rica.

a. ​Haiti.

Of the following, which is NOT true about the future of ASEAN? a. The ASEAN-Japan Comprehension Economic Partnership agreement covers trade in goods, services, and investment and economic cooperation. b. A growing ASEAN concern is the economic ascendancy of North Korea. c. The ASEAN Australian-New Zealand FTA was signed in February 2009. d. Several bilateral Free Trade Agreements are currently being implemented. e. ASEAN's Vision 2020 calls for aggressive outward-looking economic policies.

b. A growing ASEAN concern is the economic ascendancy of North Korea.

With the anticipated success of NAFTA, formal discussions to establish a Free Trade Area of the Americas began under the _____ administration. a. Obama b. Clinton c. Reagan d. Bush e. Carter

b. Clinton

he newest member of the EU is _____. a. Malta b. Croatia c. Turkey d. Russia e. Bulgaria

b. Croatia

A growing ASEAN concern is the economic ascendancy of Turkey, which as a major low-cost manufacturing center, has been one of the world's most attractive destinations for foreign direct investment. a. True b. False

b. False

ASEAN, headquartered in New Delhi, India, was established in August 1967 by five founding members: India, Malaysia, the Philippines, Singapore, and Thailand. a. True b. False

b. False

All 28 EU countries are permitted to use the euro as their currency. a. True b. False

b. False

One could argue that regional and global integration are not complements, but substitutes to economic development of a particular region. a. True b. False

b. False

The origins of the European Union (EU) can be traced to the creation of the North Atlantic Treaty Organization (NATO) in 1949. a. True b. False

b. False, Correct answer is European Coal and Steel Community, ECSC

In which country is ASEAN headquartered? a. India b. Indonesia c. Japan d. Vietnam e. Canada

b. Indonesia

A group of states with convergent social, economic, and monetary policies is called a(n) _____. a. customs union b. economic union c. free trade area d. common market e. political union

b. economic union

All of the following statements about the EU are true EXCEPT: a. it is headquartered in Brussels. b. its founding members consisted of ten countries. c. it is the most highly evolved example of regional integration in the world. d. its origins can be traced to the creation of the European Coal and Steel Community. e. its eastward enlargement reflects a common past.

b. its founding members consisted of ten countries.

Venezuela became a member of MERCOSUR in July 2012 and is considered a key member because of its a. high-tech economy, the most advanced in South America. b. vast energy resources and significant domestic market. c. large population of educated, highly skilled workers. d. long history of political and economic stability. e. low tax rates and absence of tariffs.

b. vast energy resources and significant domestic market.

In which country is the EU headquartered? a. Germany b. Italy c. Belgium d. Turkey e. France

c. Belgium

NAFTA is in which stage of the economic integration process? a. Fourth stage (economic union) b. Third stage (common market) c. First stage (free trade area) d. Fifth stage (political union) e. Second stage (customs union)

c. First stage (free trade area)

Of the following, which is NOT a primary reason why countries are now seeking to pursue regional integration at the expense of multilateral trade liberalization? a. Uncertainty surrounding the Doha Round b. Some governments may initiate regional pacts c. NAFTA is pushing the EU to pursue regional integration d. Concern that the prospect of creating a truly open global economic system that benefits all countries may recede e. Some countries are clamoring for bilateral or regional trade agreements to meet their specific agendas

c. NAFTA is pushing the EU to pursue regional integration

All of the following statements about regional integration are true EXCEPT: a. regional integration may reduce the powers of the national government. b. regional integration has advantages and disadvantages. c. regional integration should initially address a broad, ill-defined area of cooperation. d. regional integration should not create unconnected or isolated countries. e. regional integration should compensate the least fortunate.

c. regional integration should initially address a broad, ill-defined area of cooperation.

When the various regional integration blocs are analyzed from an economic geography perspective, they fall under three general categories - regional blocs close to major world markets, remote regions with large local markets, or _____. a. urban regions with large local markets b. urban regions with small local markets c. remote regions with small local markets d. remote regions with no local markets e. urban regions with no local markets

c. remote regions with small local markets

Investments in basic and higher education are made through the ASEAN ______ community. a. ​educational b. ​literacy c. ​sociocultural d. ​economic e. ​security

c. ​sociocultural

According to the text, which of the following is the second stage of regional integration? a. A free trade area b. A common market c. A political union d. A customs union e. An economic union

d. A customs union

_____ refers to the process of allowing efficient geographic distribution of business activities within and among countries. a. Economic geography b. Economic integration c. Regional integration d. Spatial transformations e. Free trade

d. Spatial transformations

Of the following statements regarding the euro, which is NOT true? a. Eighteen of the 28 EU countries are permitted to use the euro as their currency. b. The euro was considered the crowning success of the EU's plans to integrate European economies. c. The euro was introduced on January 1, 1999. d. The U.K., Denmark, and Sweden use the euro as their currency. e. The European Central Bank is the apex central bank for the Eurozone countries.

d. The U.K., Denmark, and Sweden use the euro as their currency.

The members of the Maghreb Union a. all have similar political and economic systems. b. are losing their competitiveness against EU countries. c. all suffer under enormous amounts of debt. d. hope to form an economic and political union in North Africa. e. have been unable to attract much foreign investment.

d. hope to form an economic and political union in North Africa.

ASEAN's current membership stands at how many countries? a. 30 b. 5 c. 25 d. 2 e. 10

e. 10

Of the following, which is NOT a cost of regional integration? a. Disregarding cultural and social differences b. Losing some national sovereignty c. Reducing the powers of the national government d. Moving away from most-favored-nation status rule e. Enhancing the flow of capital, labor, and technology

e. Enhancing the flow of capital, labor, and technology

How does ASEAN differ from the EU? a. It calls for the establishment of a production base. b. It maintains both tariff and non-tariff barriers among member states. c. It refuses to do business with non-member states. d. It calls for the establishment of a single market. e. It does not call for the free movement of labor across member states.

e. It does not call for the free movement of labor across member states.

The Treaty of Montevideo created _____. a. ASEAN b. NAFTA c. the EU d. MERCOSUR e. LAFTA

e. LAFTA

Which of the following is NOT an objective of NAFTA? a. The expansion of the trade in goods and services b. The phased elimination of all trade barriers c. The creation of institutions to address potential problems d. Protection of intellectual property rights e. The creation of a uniform currency in North America

e. The creation of a uniform currency in North America

What is the goal of the ASEAN Security Community (ASC)? a. To ensure that the ASEAN workforce is prepared to benefit from economic integration b. To use the military to ensure the free flow of goods across borders c. To oversee the construction of roads and railways between member nations d. To come to the aid of member nations in time of war e. To ensure that countries in the region live in peace with one another

e. To ensure that countries in the region live in peace with one another

The World Bank's (2009) World Development Report concludes that successful regional integration depends on positive changes within a. government control over the economy. b. the relationship between employers and employees. c. comparative and absolute advantage. d. regional integration blocs. e. market size, location, and openness to trade.

e. market size, location, and openness to trade.