Ch.10 Verified Test Bank Europe, Africa, and the Middle East

International Marketing, 18e (Cateora)

Chapter 10 Europe, Africa, and the Middle East

1) Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers.

2) An important objective of the member countries of the United Nations is bringing about mutual economic development.

3) The WTO primary purpose is making trade more profitable for emerging economies.

4) Nations with complementary economic bases are most likely to encounter frictions in the development and operation of a common market unit.

5) The importance of political unity to fully achieve all the benefits of economic integration drove European countries to form the World Trade Organization (WTO).

6) The most basic level of economic integration and cooperation is the geographical local federation (GLF).

7) At the most general level, the WTO represents the most important and comprehensive trade agreement in history.

8) A free trade area (FTA) provides its members with a mass market without barriers to impede the flow of goods and services.

9) A customs union is the most fully integrated form of regional cooperation.

10) The blueprint for the European Union began with the Treaty of Rome in 1957.

11) A commonwealth of nations is an organization providing for the strongest possible economic integration relationship.

12) The European Union was created when the 12 nations of the European Community ratified the Maastricht Treaty.

13) The Commonwealth of Independent States (CIS) was formed by Britain because it did not want to join the European Economic Community (EEC).

14) Historically, standards have been used to effectively increase market access, such as the sale of German beer in Italy.

15) In line with its goal of enlargement, ten new countries joined the European Union in 2004 followed by Bulgaria and Romania in 2007.

16) The Council of Ministers of the European Union can enact into law all proposals involving changes in tax rates on products and services by majority vote.

17) The decisions of the European Court of Justice are not final, but can be appealed in national courts.

18) In the Amsterdam Treaty, the European Union agreed to accommodate the changes brought about by the monetary union and the admission of new members.

19) All three Baltic states started off with the same legacy of efficient industry and American-style capitalist economies.

20) Europe and Asia have a trade group that has emerged and persisted since the dissolution of the Soviet Union called the Commonwealth of Independent States.

21) The Commonwealth of Independent States is a loose economic and political alliance with open borders but no central government.

22) The first Soviet republics to declare independence were the Baltic states.

23) Economic growth among African countries has been on the downswing for the past several years.

24) The Southern African Development Community is the most advanced and viable of Africa's regional organizations.

25) Iran, Pakistan, and Turkey, formerly the Regional Cooperation for Development (RCD), have renamed their regional group the Economic Cooperation Organization (ECO).

26) The Arab states on the Persian Gulf, Egypt, and Morocco worked out an agreement on an Arab Free Trade Area, sometimes called the Greater Arab Free Trade Area (GAFTA).

27) The initial aim of a multinational market is to protect businesses that operate within its borders.

28) With the adoption of the euro, price differentials are much easier to spot, and EU consumers can search for the best bargains in brand-name products more easily.

29) Groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers are called

A) multilateral economic associations.

B) cartels.

C) multinational market regions.

D) trade associations.

E) political and cultural associations.

30) Multinational market groups form

A) a large organization that promotes harmony by mutual agreement to a common peace treaty.

B) large markets that provide potentially significant opportunities for international business.

C) a conglomerate that seeks to undertake foreign trading ventures as one company.

D) a nonprofit entity that works together to aid the development of underdeveloped countries.

E) regional trading blocs without trade restrictions internally and borders restricted from outsiders.

31) It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances. What is being referred to here?

A) the European Commission

B) the European Economic Community

C) the Organization for Security and Co-operation in Europe

D) the Asia-Pacific Economic Cooperation

E) the European Community

32) The World Trade Organization is wholly dedicated to

A) expanding capitalism.

B) eliminating language barriers in trade.

C) having free and open national borders.

D) enforcing international anti-bribery laws.

E) improving the efficiency of trade among nations.

33) Every type of economic union shares the development and enlargement of market opportunities as a basic orientation. What best describes the primary way market opportunities are enlarged by economic unions?

A) preferential tariff treatment for participating members

B) use of embargos to eliminate rival competition

C) formulation of cartels

D) quest for economic dominance through boycotts of rivals

E) movement toward a common language as a means to overcoming economic hurdles

34) Nations with complementary economic bases are least likely to

A) develop a distinctive monetary system.

B) allow individual differences to be outweighed by the total benefit of economic integration.

C) experience internal economic development.

D) achieve enlargement of market opportunities through preferential tariff treatment.

E) encounter frictions in the development and operation of a common market unit.

35) What is a requisite for the survival of any economic union?

A) avoiding potentially significant opportunities for international business

B) having agreements and mechanisms in place in order to settle economic disputes

C) including into the union countries with diverse economies, distinctive monetary systems, developed agricultural bases, and different natural resources

D) establishing of a comprehensive agriculture and economic policy

E) ensuring biased treatment of goods produced within the union

36) What is a basic requisite for the development of a supranational market arrangement?

A) political amenability among countries

B) business strategy sharing

C) adoption of common cultural practices

D) protection of the market by exercising tariffs and boycotts

E) a desire to maintain state sovereignty

37) With respect to the political factors that affect supranational markets, ________ is one of the most cherished possessions of any nation.

A) a two-party system

B) a three-party system

C) state federalism

D) state sovereignty

E) a strong middle class

38) What is one of the multilateral free trade agreements signed by the United States?

A) CETA

B) NAFTA

C) NATO

D) MERCOSUR

E) LAFTA

39) As Timothy examines markets that might match his company's investment requirements, he is particularly interested in the fact that the European Community has an extensive transportation network. This network seems to draw all the member nations closer together physically. What critical factor for ensuring an effective economic union is Timothy most likely examining when reviewing transportation networks?

A) cultural factors

B) trade factors

C) political factors

D) geographic proximity

E) economic factors

40) Similarity of cultures can make or break an economic union. Although there is great cultural diversity in the European Union, key members share ________ and are commonly aware of being European.

A) a common language

B) a long-established Christian heritage

C) a dislike for foreigners

D) a strong affiliation to monarchy and feudalism

E) a democratic background and heritage

41) One of the first factors that gave the European Union an edge over others in the process of becoming a common market was a

A) similarity in agriculture and monetary policies.

B) similarity in political systems.

C) similarity in languages.

D) well-developed transportation network.

E) common affiliation toward democracy.

42) At the most general level, ________ represents the most important and comprehensive trade agreement in history.

A) NAFTA

B) the Amsterdam Treaty

C) MERCOSUR

D) the WTO

E) ASEAN

43) The most basic economic integration and cooperation, in which governments agree to participate jointly to develop basic industries beneficial to each economy, is the

A) political union.

B) common market.

C) regional cooperation for development (RCD).

D) customs union.

E) free trade area (FTA).

44) A ________ is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.

A) restricted trade area

B) noncooperation agreement

C) regional cooperation for development

D) tariff pact

E) free trade area

45) A free trade area (FTA) provides its members with

A) complete political integration.

B) a mass market without trade barriers among partner countries.

C) a regional cooperation for social development.

D) a common market that eliminates all external tariffs.

E) a market that offsets higher nontrade barriers with lower external tariff.

46) A ________ has reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the group.

A) preferential trade area

B) currency union

C) regional cooperation for development

D) customs union

E) free trade area

47) A ________ is an intermediate step in the transition from a free trade area to a common market.

A) political union

B) currency union

C) regional cooperation for development (RCD)

D) customs union

E) preferential trade area

48) What was a customs union before becoming a common market?

A) NAFTA

B) DR-CAFTA

C) Israel-Mexico Free Trade Agreement

D) the European Union

E) South Asian Free Trade Area

49) A ________ agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.

A) preferential trade agreement

B) common market

C) regional cooperation for development

D) customs union

E) free trade area

50) Which level of economic integration has no restrictions on internal trade and free flow of capital among member nations and lacks only political unity to become a political union?

A) common market

B) free trade area

C) regional cooperation group

D) customs union

E) preferential trade agreement

51) The Treaty of ________ established the European Economic Community (EEC) in 1957 and called for common external tariffs and the gradual elimination of intramarket tariffs, quotas, and other trade barriers.

A) Kent

B) Paris

C) Rome

D) Cannes

E) Maastricht

52) The most fully integrated form of regional cooperation is a

A) political union.

B) common market.

C) regional cooperation for development (RCD).

D) customs union.

E) free trade area (FTA).

53) A ________ involves complete political and economic integration, either voluntary or enforced.

A) political union

B) common market

C) regional cooperation for development (RCD)

D) customs union

E) free trade area (FTA)

54) Though now disbanded, what agreement was considered to be the most notable enforced political union of the last 40 years?

A) NATO

B) NAFTA

C) MERCOSUR

D) COMECON

E) LAFTA

55) Britain and countries that were formerly part of the British Empire are an example of a ________ of nations.

A) autarchy

B) monocracy

C) commonwealth

D) proprietary colony

E) trade association

56) The ________ Treaty created the European Union with 12 nations.

A) Kent

B) Paris

C) Rome

D) Cannes

E) Maastricht

57) What is true of the Maastricht Treaty?

A) It serves as a deterrent for the political unification of the European countries.

B) It restricts movement of goods between the United Kingdom and France.

C) It allows for the free movement of persons between the United States and Canada.

D) It allows for the free movement of goods throughout the member states of the European Union.

E) It is the first European treaty whose terms have been universally accepted.

58) What type of political union is mostly based on economic history and a sense of tradition?

A) conglomerate

B) community

C) commonwealth

D) proprietary colony

E) trade association

59) Which treaty allows for the free movement of goods, persons, services, and capital throughout the member states of the European community?

A) Rome Treaty

B) Berlin Treaty

C) Maastricht Treaty

D) Barcelona Treaty

E) Athens Treaty

60) Of all the multinational market groups, none has been more secure in its cooperation or more important economically than the

A) Newly Independent States.

B) Economic Community of West African States.

C) Commonwealth of Independent States.

D) European Union.

E) Trans-Pacific Union.

61) Which institution has the responsibility to debate and decide which proposals of the Single European Act to accept as binding on European Union members?

A) the European Commission

B) the European Parliament

C) the Council of Ministers

D) the European Court of Justice

E) the European Committee of the Regions

62) Which European Union institution originally had only a consultative role but can now amend and adopt Union legislation?

A) the European Parliament

B) the Council of Ministers

C) the Court of Justice

D) the European Commission

E) the European Central Bank

63) The institutions of the European Union form a(n) ________ pattern.

A) bilateral

B) unitary

C) federal

D) provincial

E) global

64) The European Commission, the Council of Ministers, the European Parliament, and the Court of Justice are institutions of the

A) COMECON.

B) European Free Trade Area.

C) European Economic Area.

D) European Union.

E) Trans-Pacific Union.

65) The European ________ initiates policy and supervises its observance by member states, and it proposes and supervises execution of laws and policies.

A) Parliament

B) Committee of the Regions

C) Commission

D) Court of Auditors

E) Court of Justice

66) The ________ is the decision-making body of the European Union that can enact into law all proposals by majority vote except for changes in tax rates on products and services, which require unanimous vote.

A) United Nations

B) World Trade Organization

C) European Commission

D) Commonwealth of Independent States

E) Council of Ministers

67) The various legal instruments used by the European Union

A) issue regulations that are binding against the member states if the national courts of the member states agree to the regulations.

B) must confer with the United Nations before issuing directives against member states.

C) direct all disputes involving the European Union law to the International Court of Justice.

D) have the authority to issue regulations that bind the member states directly.

E) require the approval of individual nations to address binding decisions against an enterprise of that nation.

68) Which EU institution drafted the Maastricht Treaty that was presented to the European Union member states for ratification?

A) the United Nations

B) the World Trade Organization

C) the European Commission

D) the Commonwealth Delineation

E) the Council of Ministers

69) The parameters of the creation of a common currency for the European Union were established by

A) the Economic and Monetary Union provision of the Maastricht Treaty.

B) the Single Currency provision of the Treaty of Rome.

C) the Enhanced Cooperation provision of the Treaty of Utrecht.

D) the Economic Union provision of the Treaty of Vienna.

E) the Free Trade provision of the Anglo-Irish Treaty.

70) Which EU institution is responsible for challenging any measures incompatible with the Treaty of Rome and for passing judgment, at the request of a national court, on the interpretation or validity of points of European Union Law?

A) the International Court of Justice

B) the European Court of Justice

C) the International Criminal Court

D) the European Common Judicial Council

E) the European Security Council

71) Which country rejected the euro, causing a debate about the EU's future?

A) Austria

B) Greece

C) Finland

D) Denmark

E) Spain

72) Which statement is true about the European Parliament?

A) It has extensive budgetary powers that allow it to be involved in major EU expenditures.

B) It serves as a purely consultative body.

C) It is responsible for debating and deciding which proposals of the Single European Act to accept as binding on EU members.

D) It initiates policy and supervises its observance by member states.

E) It is responsible for challenging any measures incompatible with the Treaty of Rome.

73) The Economic and Monetary Union provision of the Maastricht Treaty established the parameters for the creation of the

A) dollar.

B) pound.

C) rupee.

D) ruble.

E) euro.

74) The ________ increases the authority of the institutions of the European Union and is designed to accommodate the changes brought about by the monetary union and the admission of new members.

A) Treaty of Rome

B) Single European Act

C) Maastricht Treaty

D) Expansion Act

E) Amsterdam Treaty

75) What long-term challenge is the European Union facing?

A) eliminating all tariffs on internal trade amongst member nations

B) establishing a common currency for the Union

C) including Asia into the Union

D) limiting the political aspects of the Union

E) finding ways to contract the Union

76) With the expansion of the European Union, existing members fear

A) retaliation by the Soviet Union against them.

B) a flood of cheap labor into their countries.

C) that OPEC will cut off supplies to countries supporting the expansion of the European Union.

D) free movement of capital amongst the member nations.

E) that they would need to close the borders between member nations.

77) One of the long-term challenges facing the European Union in the next 50 years is

A) deciding about further enlargement.

B) creation of a common currency.

C) reducing the free flow of capital between its member nations.

D) deciding on how to control the individualistic European population.

E) establishing a court that would settle the disputes among member nations.

78) What is true of the European Court of Justice?

A) It initiates policy and supervises its observance by member states.

B) Its decisions require approval by the top three nations of the European Union.

C) Its decisions are final and cannot be appealed in national courts.

D) It primarily has a consultative role in interpreting the nuances of the EU law.

E) It can amend and adopt Union legislation.

79) Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, have moved steadily toward adopting aspects of

A) capitalism.

B) autocracy.

C) Marxist–socialism.

D) despotism.

E) communism.

80) Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, have moved steadily toward establishing postcommunist market reforms. As a result,

A) the region is against establishing free markets.

B) new business opportunities are emerging in this region.

C) all of the eastern European countries can be viewed as one entity.

D) all of these countries have the same level of cultural assimilation.

E) all of these countries have had the same success in economic reform and growth.

81) The Czech Republic, Hungary, the Slovak Republic, and Poland have become members of the

A) UNDP.

B) OECD.

C) ASEAN.

D) LAIA.

E) APEC.

82) Why is Estonia's economic growth since independence from the Soviet Union outpacing the other Baltic nations?

A) It took up the ruble.

B) It nationalized all companies and land.

C) The state helped all its struggling banks.

D) It adopted the freest trading regime of the three Baltic nations.

E) It joined the European Union immediately after its independence in 1992.

83) Most eastern European countries are privatizing state-owned enterprises, establishing free market pricing systems, and

A) introducing autarchic trade policies.

B) increasing trade barriers.

C) wrestling with inflation.

D) making import controls stringent.

E) switching to a socialistic economy.

84) One reason Yugoslavia has been facing internal strife is due to

A) reunification with Slovenia.

B) European Parliament sanctions.

C) adoption of Marxist–socialist policies.

D) rise of autocracy.

E) ethnic divisions.

85) The first Soviet republics to declare independence from the Soviet Union were

A) the Russian SFSR.

B) the Ukrainian SSR.

C) the Baltic states.

D) the Falkland Islands.

E) the Newly Independent States.

86) Which is the trade group that is part of Europe and Asia, has emerged and persisted since the dissolution of the Soviet Union, and is composed of all the republics except the Baltic states?

A) the European Union East

B) the Commonwealth of Independent States

C) the Eastern Bloc Economic Area

D) the European Free Trade Association

E) the Euro-Soviet Union

87) What is a provision of the commonwealth agreement signed by the Commonwealth of Independent States?

A) to reject the powers of the old regimes

B) to keep the ruble but allow new currencies

C) to create disjointed control of nuclear weapons

D) to invalidate all Soviet foreign treaties and debt obligations

E) to avoid creating a European Union–style free trade association

88) The Commonwealth of Independent States is

A) a political alliance with a central government.

B) an economic and political alliance with open borders but no central government.

C) an economic and political alliance with closed borders and one central government.

D) a federation of many states.

E) a supranational organization similar to the old European community.

89) When the Soviet Union dissolved, the ________ emerged that had 12 members that agreed to a loose economic and political alliance with open borders but no central government.

A) European Trade Pact

B) Commonwealth of Independent States

C) Eurasian Alliance

D) Russian Confederation

E) Post-Soviet Bloc

90) ECOWAS, SADC, and EAC are active regional cooperative groups in

A) North America.

B) Australia.

C) Africa.

D) Europe.

E) Asia.

91) What has hampered the conferences held by the United Nations Economic Commission for Africa from bringing about economic integration?

A) governmental inexperience

B) depletion of natural resources

C) excessive influx of products

D) lack of beneficial funds

E) excess of cheap labor

92) What makes the South African market an important base for serving nearby African markets that are too small to be considered individually?

A) the rise of communism in South Africa

B) the South African market's developed infrastructure

C) the economic embargo imposed by the United Nations

D) the existence of inward-looking trade and investment policies

E) the South African government's nationalization initiative

93) South Africa is most likely to experience rapid economic growth in as few as 10 years owing to

A) the rise of communism.

B) its induction into the ASEAN.

C) its industrial base.

D) the economic embargo by the UN.

E) the decoupling of small African markets from it.

94) What is the most advanced and viable of Africa's regional organizations?

A) Economic Community of West African States

B) African Development Bank

C) Southern African Development Community

D) Organization of African Unity

E) Economic Community of Central African States

95) What is a reason for East Asia's economic success?

A) the availability of an extraordinarily rich land

B) the existence of a common currency

C) the implementation of Marxist–socialist policies

D) the rise of autocracy

E) the emphasis placed on education and healthcare

96) ________ has the potential to become the newest BEM, but its development will depend on government action and external investment by other governments and multinational firms.

A) South Africa

B) Canada

C) Japan

D) Singapore

E) Britain

97) What is a consequence of the creation of large mass markets?

A) It will cripple businesses accustomed to mass production and mass distribution.

B) It will increase the significance of small national markets.

C) It will lead to decreased purchasing power.

D) It will increase import tariffs worldwide by at least 70 percent.

E) It will lead to an overall drop in international trade.

98) What has facilitated the adoption of the euro among EU countries?

A) increased complexity of online marketing.

B) the elimination of parallel imports.

C) an increase in European import tariffs by 60 percent.

D) easily recognizable price differentials.

E) a decrease in the toughness of market competition in Europe.

99) Briefly explain the concept of a multinational market region, and explain why they are important today.

100) Successful economic union requires favorable economic, political, cultural, and geographic factors. Briefly explain how these four factors impact regional integration.

101) What is the purpose of the regional cooperation for development?

102) Compare and contrast the concepts of free trade area, customs union, common market, and political union.

103) What is a commonwealth? Discuss the features of this form of economic integration.

104) What was the intent of the Maastricht Treaty, and what has been its result?

105) Discuss the functions of each of the four institutions under the European Union.

106) Discuss the expansion of the European Union. What are some of the issues faced by existing members as a result of the expansion?

107) What countries make up the Commonwealth of Independent States? How does this group work?

108) Describe the opportunities offered by economic integration.