Deck 8: Economic Integration, emerging and Developing Markets

Question 1

A major difficulty towards achieving economic integration within _________ has been the administration of a common agricultural policy (CAP).

A)NAFTA
B)the EU
C)ASEAN
D)MERCOSUR
E)OPEC

Answer 1

B

Question 2

A larger market will tend to increase the number of competing firms,resulting in greater efficiency and lower prices for consumers. This is due to:

A)Absolute advantage
B)Product diversity
C)Customer efficiency
D)Integration
E)Effectiveness

Answer 2

D

Question 3

A(n)_______ is a group of countries that have common foreign policy and security policy that share judicial cooperation.

A)Free-trade area
B)Customs union
C)Common market
D)Economic union
E)Political union

Answer 3

E

Question 4

__________ is the cost to a particular country when a group of countries trade a product freely among themselves but maintain common barriers to trade with nonmembers.

A)Trade creation
B)Trade diversion
C)Balance of power
D)Economies of scale
E)Trade deficit

Question 5

__________ refers to lower production costs resulting from greater production for an enlarged market.

A)Production creation
B)Trade diversion
C)Internal economies of scale
D)External economies of scale
E)Factor mobility

Question 6

Jen lives in a European country that harmonizes monetary policies,taxation,and government spending,and also has a common currency,the Euro. This type of integration can best be described as a(n):

A)Free-trade area
B)Customs union
C)Common market
D)Economic union
E)Social union

Question 7

The four freedoms identified in the economic and monetary union (EMU)include coordination of economic policies,creation of a European central bank,replacement of national monetary authorities,and:

A)Adoption of the U.S.dollar as the common currency
B)Adoption of the Euro as the common currency
C)Establishment of a free trade area
D)Adoption of Spanish as the common language
E)Adoption of English as the common language

Question 8

_________ will lead to the movement of labor and capital from areas of low productivity to areas of high productivity.

A)Trade creation
B)Supply chain management
C)Trade diversion
D)Price mobility
E)Factor mobility

Question 9

The primary difficulty within the European Union in terms of achieving the goal of free movement of goods has been an inability to agree on a common:

A)Language
B)Religion
C)Trade policy
D)Currency
E)Immigration policy

Question 10

Which institution of the European Union is composed of 751 members and started out essentially as an advisory body with relatively little power?

A)Court of Justice
B)European Commission
C)Council of Ministers
D)European Parliament
E)Court of Auditors

Question 11

________ is the ability to freely move factors of production across borders,as among common market countries.

A)Effectiveness
B)Efficiency
C)Capital mobility
D)Production mobility
E)Factor mobility

Question 12

When Spain joined the European Union,its exports of wheat and other products increased as a result of reduced tariffs. This can best be described as:

A)Trade creation
B)Trade diversion
C)Balance of power
D)Economies of scale
E)European integration

Question 13

The _____________ has the final power to decide EU actions.

A)Court of Justice
B)European Commission
C)Council of Ministers
D)European Parliament
E)Court of Auditors

Question 14

The least restrictive form of economic integration is a(n)________,in which all barriers to trade among member countries are removed,although sometimes only for certain goods or services.

A)free-trade area
B)customs union
C)common market
D)economic union
E)political union

Question 15

What form of economic integration involves collaboration among trading countries in which members dismantle trade barriers among members and also establish a common trade policy with respect to nonmembers?

A)Free-trade area
B)Customs union
C)Common market
D)Economic union
E)Political union

Question 16

In 1957,the European Economic Community was formally established by the Treaty of:

A)Rome
B)Madrid
C)Versailles
D)Leningrad
E)Napoleon

Question 17

TireCo is a tire-making company headquartered in France,with operations in several European countries. As a result of these countries' membership in the EU,the company has benefited from lower production costs due to greater access to highly skilled labor at a lower cost to the company. This can best be described as:

A)Internal economies of scale
B)External economies of scale
C)Supply chain management
D)Just-in-time management
E)Trade creation

Question 18

A German and an American are discussing differences between political and economic organizations within their respective countries. The German explains that the EU organization that is most like the U.S.judicial system is the:

A)European Parliament
B)Council of Ministers
C)Court of Auditors
D)Court of Justice
E)Court of Appeals

Question 19

Members of the Group of Five include the United States,Britain,France,Germany,and:

A)Russia
B)China
C)Japan
D)Brazil
E)Uruguay

Question 20

The __________ body of the EU is the European Commission,headquartered in Brussels.

A)executive
B)advisory
C)judicial
D)legislative
E)totalitarian

Question 21

The Arab Maghreb Union applies to countries located in which region of the world?

A)North African
B)West African
C)European
D)Mediterranean
E)Amazonian

Question 22

A(n)_______ is an association of producers of a particular good,consisting either of private firms or nations,formed for the purpose of suppressing the market forces affecting prices.

A)oligarchy
B)cartel
C)commodity price agreement
D)buffer
E)trade diversion

Question 23

________ is the element of success to be applied to developing markets that involves learning about the needs,aspirations,and habits of targeted populations.

A)Research
B)Creative buying power
C)Tailoring local situations
D)Improving access
E)Shaping aspirations

Question 24

The objective of the Economic Community of West African States (ECOWAS)was to:

A)Reduce trade barriers among member countries
B)Eliminate trade barriers for nonmember countries
C)Form a customs union and eventual common market
D)Form a common market and eventual political union
E)Form a political union

Question 25

In opposition to the U.S.-led Free Trade Area of the Americas (FTAA),which group focuses more on social welfare and economic aid than trade liberalization?

A)Central American Common Market
B)Cuban-Venezuelan Trade Agreement
C)Bolivarian Alternative for the People of Our America
D)Caribbean Common Market
E)Caribbean Basin Initiative

Question 26

The primary mandate of the __________ is to provide a framework for regional political and economic integration in Caribbean member countries.

A)Central Bermuda Common Market
B)Gulf Coast Trade Agreement
C)Bolivarian Alternative for the People of Our America
D)Caribbean Common Market
E)Caribbean Basin Initiative

Question 27

Which emerging economy is most in need of significant infrastructure investment?

A)Brazil
B)China
C)India
D)United Arab Emirates
E)Singapore

Question 28

The MERCOSUR trading bloc includes all of the following countries EXCEPT:

A)Brazil
B)Chile
C)Argentina
D)Paraguay
E)Mexico

Question 29

Saul is an international business manager who is interested in expanding business into South America. He is particularly interested in doing business in a country that has recovered well from the 2007-2009 global recession. With this in mind,which South American country should Saul consider first?

A)Argentina
B)Libya
C)Mexico
D)Venezuela
E)Brazil

Question 30

India's growth is largely a result of an emphasis on:

A)Aviation manufacturing
B)Mining and refraction
C)Educational services
D)Commercial services
E)Agriculture

Question 31

A(n)__________ is a country making an effort to change and improve its economy with the goal of raising its performance to that of the world's more advanced nations.

A)communist market
B)junk market
C)capital market
D)transition market
E)emerging market

Question 32

China's recent growth as an emerging market comes as the result of a focus on:

A)Export-driven manufacturing
B)Importing U.S.goods
C)Agrarian socialism
D)Education services
E)Entrepreneurship

Question 33

Which of the following would most likely be considered a transition economy?

A)Somalia
B)Czech Republic
C)Greece
D)Mexico
E)Antigua

Question 34

__________ refers to stock of a commodity kept on hand to prevent a shortage in times of unexpected demand.

A)Buffer stock
B)Gray goods
C)White goods
D)Surplus goods
E)Backorder stock

Question 35

In October 1991,Brunei,Indonesia,Malaysia,and other Southeast Asian countries formed a customs union called:

A)ASEAN
B)ASEAN Free Trade Area
C)EAEG
D)APEC
E)APEC Free Trade Agreement

Question 36

Which of the following represents the greatest barrier to business for emerging economies?

A)Lack of labor
B)Infrastructure problems
C)Overabundance of capital
D)Lack of regional economic integration
E)Language barriers

Question 37

Algeria,Angola,Iran,Iraq,and Kuwait are members of the Organization of Petroleum Exporting Countries (OPEC). One of OPEC's main functions is to control oil prices by restricting production. OPEC can best be described as a(n):

A)Oligarchy
B)Cartel
C)Commodity price agreement
D)Buffer
E)Trade diversion

Question 38

Which free trade agreement includes the United States,Canada,and Mexico?

A)NAFTA
B)AFTAN
C)NAALC
D)EU
E)MERCOSUR

Question 39

_________ are Mexican border factories with lower labor costs that make goods for export back to the U.S.

A)Tapas
B)Mercosur
C)Maquiladoras
D)Bordellos
E)Casa

Question 40

A(n)___________ is an agreement involving both buyers and sellers to manage the price of a particular commodity,but often only when the price moves outside a predetermined range.

A)oligarchy
B)cartel
C)commodity price agreement
D)buffer
E)trade diversion

Question 41

Economically speaking,the Arab Maghreb Union is one of the most powerful of any trade groups

Question 42

The Organization of Petroleum Exporting Countries is an example of a commodity price agreement.

Question 43

The biggest challenge in developing markets is in providing:

A)Domestic goods
B)Luxury goods
C)Commercial services
D)Agricultural goods
E)Essential services

Question 44

In North American integration,the interest is more economic than political or social.

Question 45

The international manager,as a change agent,must constantly seek ways to influence the regulatory environment in which he or she must operate. This can best be done via:

A)Strategic planning
B)Reorganization
C)Lobbying
D)Fixing prices
E)Lying

Question 46

In 1999,China proposed the Asia Pacific Economic Cooperation as an annual forum.

Question 47

When a small country imposes tariffs on certain imported goods,the price of these goods will typically decrease as a result.

Question 48

A factor market involves a group of countries that agree to (1)remove all barriers to trade,(2)establish a common trade policy with respect to nonmembers,and (3)allow mobility for factors of production.

Question 49

In opposition to the U.S.-led Free Trade Agreement of the Americas,the Andean Common Market (ANCOM)was founded in 1969 and focuses more on social welfare and economic aid than trade liberalization.

Question 50

The Caribbean Basin Initiative (CBI)extended trade preferences to Caribbean countries granting them special access to the markets of the United States.

Question 51

Gerenco is a South American utility company that can be described as a weak competitor with relatively low market share in South American utilities. What strategy should the company consider to gain market entry and development?

A)Sell assets
B)Fix prices
C)Strong-arm competitors
D)Create alliances
E)Lobby governments

Question 52

Either negative or positive effects may result when a group of countries trade freely among themselves but maintain common barriers to trade with nonmembers.

Question 53

The executive body of the EU is the Council of Ministers,headquartered in Rome.

Question 54

The least restrictive form of economic integration,a free trade area,involves the abolition of barriers to trade among member countries.

Question 55

The first step toward European integration occurred in 1948 with the establishment of the Organization for European Economic Cooperation (EEC).

Question 56

_________ is the provision of financial services to low-income clients,including consumers and the self-employed,who traditionally lack access to banking and related services.

A)Alt-A lending
B)Microfinance
C)Glass-Steagall
D)LIBOR lending
E)Improving access

Question 57

When ___________,companies must combine advanced technology with local insights in order to be successful in developing markets.

A)researching
B)creating buying power
C)tailoring local situations
D)improving access
E)shaping aspirations

Question 58

Since NAFTA took effect in 1994,trade among Canada,Mexico,and the United States has stayed virtually the same.

Question 59

Members of the Group of Five include the United States,Britain,France,China,and Russia.

Question 60

Internal economies of scale refer to lower production costs resulting from greater production for an enlarged market.

Question 61

_________ is the provision of financial services to low-income clients,including consumers and the self-employed,who traditionally lack access to banking and related services.

Question 62

In 1979,Deng Xiao Ping helped China transform to an export-driven platform for global manufacturing by making economic development a top priority.

Question 63

_________ are Mexican border plants,with lower labor costs,making or processing goods or parts for export back to the U.S.

Question 64

__________ are lower production costs resulting from the free mobility of factors of production in a common market.

Question 65

___________ is an integrated system of subsidies and rebates applied to agricultural interests in the European Union.

Question 66

The __________ extended trade preferences to Caribbean countries granting them special access to the markets of the United States.

Question 67

The __________ is the original agreement that established the foundation for the formation of the European Economic Community.

Question 68

In restructuring firms in developing economies,authority must be come more centralized so regional programs can be executed.

Question 69

A(n)_________ is an area in which all barriers to trade among member countries are removed,although sometimes only for certain goods or services.

Question 70

Describe the current status of the North American Free Trade Agreement. What do the member countries stand to gain or lose as a result of participation?

Question 71

Explain how the European Union is organized.

Question 72

_________ is a benefit of economic integration,resulting in increased exports to member countries.

Question 73

__________ includes goods kept on hand to prevent a shortage in times of unexpected demand.

Question 74

Microfinance is the provision of a small amount of funds for clients in emerging economies.

Question 75

__________ are countries making an effort to change and improve their economies with the goal of raising performance to that of the world's more advanced nations.

Question 76

Discuss the four levels of economic integration in countries.

Question 77

________ is the ability to freely move factors of production across borders,as among common market countries.

Question 78

In India,the emphasis is on the agriculture sector rather than the services or production sectors.

Question 79

Poor roads,outdated port facilities,and lack of refrigeration are examples of infrastructure problems for emerging economies.

Question 80

A(n)_________ has the characteristics of a common market and also harmonizes monetary policies,taxation,and government spending and uses a common currency.