Ch 7 Quiz

Obtaining economic development incentives from​ host-or home-country governments increases the cost of trade and investment barriers. True False

False

Which of the following statements about NAFTA is​ TRUE? A. NAFTA allowed​ member-country firms to submit bids for government contracts in the three signing countries​(Canada, Mexico, and the United​ States). B. NAFTA implemented tariffs for products and services traded in the bloc. C. NAFTA decreased market access among​ Canada, Mexico, and the United States. D. NAFTA does not offer dispute settlement in areas of​investment, unfair​ pricing, labor​ issues, and the environment. E. NAFTA caused a reduction in U.S. exports to Canada and Mexico.

A. NAFTA allowed​ member-country firms to submit bids for government contracts in the three signing countries​(Canada, Mexico, and the United​ States).

Which one of the following is a major factor in the growth of global commerce and in rising incomes​ worldwide? A. Reducing trade barriers B. Increasing countervailing duties C. Reducing investment incentives D. Reducing subsidies E. Increasing antidumping duties

A. Reducing trade barriers

​________ involves countries establishing agreements with one another for the purpose of minimizing obstacles concerning trade and business ventures. A. Regional economic integration B. Investment motivation C. A foreign trade zone D. Centralized economic planning E. The General Agreement on Tariffs and Trade

A. Regional economic integration

Which of the following coordinates​ economic, social, and cultural affairs among​ Bahrain, Kuwait,​ Oman, Qatar, Saudi​ Arabia, and the United Arab​ Emirates? A. The Gulf Cooperation Council​ (GCC) B. European Free Trade Association C. The Australia and New Zealand Closer Economic Relations Agreement​ (CER) D. Asia Pacific Economic Cooperation​ (APEC) E. Association of Southeast Asian Nations​ (ASEAN)

A. The Gulf Cooperation Council​ (GCC)

Regional integration leads to increased​ ________ by firms inside their economic bloc. A. internationalization B. costs C. isolation D. dumping E. localization

A. internationalization

Which one of the following was the first major effort to systematically reduce trade barriers​ worldwide? A. EU B. GATT C. NAFTA D. FTZ E. WTO

B. GATT

Which of the following primarily focuses on ensuring the reduction of tariffs among certain countries and settling trade​ disagreements? A. United Nations B. General Agreement on Tariffs and Trade C. European Union D. Smoot-Hawley Tariff Act E. World Bank

B. General Agreement on Tariffs and Trade

Members of​ ________ benefited the most from the maquiladora program. A. EFTA B. NAFTA C. MERCOSUR D. EU

B. NAFTA

________ pertains to national economic policies that restrict free trade and protect domestic industries from foreign competition. A. A custom B. Protectionism C. A quota D. A non tariff trade barrier E. A tariff

B. Protectionism

TDC​ Industries, a U.S.​ firm, has established operations in​ Germany, so TDC Industries has free trade access to​ ________of the EU market. A. a large part B. all C. none D. a limited part E. a specific percentage

B. all

Regional integration enables member countries to gain bargaining power in world affairs by​ ________. A. enhancing the productivity of member countries B. establishing a stronger political position as a united bloc C. attracting direct investment from outside the bloc D. helping member country firms to achieve economies of scale E. expanding the market size of member country firms

B. establishing a stronger political position as a united bloc

What type of tariff is assessed as a percentage of the value of the imported​ product? A. reverse tariff B. import tariff C. specific tariff D. protective tariff

B. import tariff

Governments impose offensive barriers to​ ________. A. promote national security B. pursue strategic or public policy objectives such as increasing employment C. safeguard the interests of special interest groups D. protect domestic industries

B. pursue strategic or public policy objectives such as increasing employment

Which of the following is an advantage of regional​ integration? A. Expanded market size B. Economies of scale C. All choices are correct D. Attract direct investment E. Increased production

C. All choices are correct

Which type of government intervention encourages foreign companies to enter a​ host-country market? A. Currency controls B. Countervailing duties C. Investment incentives D. Dumping E. Tariffs

C. Investment incentives

Why would a nation choose to be a member of an economic​ bloc? A. Nations can pursue economic integration by reducing tariffs. B. A nation can then become part of the World Trade Organization. C. It is easier to reach an agreement on free trade with a few nations rather than with numerous countries. D. An economic bloc imposes restrictions on the​ cross-border flow of products. E. An economic bloc imposes restrictions on labor.

C. It is easier to reach an agreement on free trade with a few nations rather than with numerous countries.

In​ a(n) ________, barriers to trade within a participating country are reduced or​ eliminated, shared external barriers are​ established, and unrestricted movement of​ goods, services, and factors of production is permitted. A. overseas trade region B. customs union C. common market D. unrestricted trade location E. free trade area

C. common market

Government intervention and trade barriers imposed by developed countries raise​ ______ for developing economies that supply them because tariffs are often disproportionately high. A. economic freedom levels B. export controls C. ethical concerns D. subsidies E. quotas

C. ethical concerns

​A(n)________ is a designated location within a country that receives imported goods for assembly and then​ re-exports finished products. A. free trade agreement B. political union C. foreign trade zone D. regional bloc E. economic bloc

C. foreign trade zone

A government policy or procedure that restricts trade through means such as quotas is known as​ a(n) ________. A. currency control B. import control C. non tariff trade barrier D. import license E. export control

C. non tariff trade barrier

If you are a business looking for a foreign market in which to sell​goods, what does economic freedom in a country mean to your​business? A. The government will enact laws that limit the amount of currency that can be taken out of the country. B. The government will increase tariffs. C. The government will support foreign business by enacting laws that increase export controls. D. The government will support foreign business by enacting laws that decrease import quotas. E. The government will pass legislation that increases protectionism.

D. The government will support foreign business by enacting laws that decrease import quotas.

Which of the following statements BEST describes the European Union​ (EU)? A. Multiple currencies make trade easier for firms doing business within the EU. B. Labor and capital are unable to move freely among the EU members. C. The EU is a political union with the same laws throughout. D. Eleven EU countries belong to a monetary union that uses the pound. E. Trade among the EU members takes place unobstructed.

E. Trade among the EU members takes place unobstructed.

Regional integration greatly increases the scale of the marketplace for firms inside the economic bloc. True False

True

Tariffs and most nontariff trade barriers impact importers by making products more expensive. True False

True