Deck 10: International Cooperation Among Nations

Question 1

Which of the following is the result of GATT?

A) dramatic growth in world trade
B) slight increase in world trade
C) creation of the European Union
D) ITO formation

Answer 1

A

Question 2

Both GATT and the WTO seek to promote ________.

A) trade in goods
B) trade in services
C) intellectual property protection
D) trade-related investment

Answer 2

A

Question 3

Ernest, a federal government employee, attended a session of the final GATT Round. Ernest attended the ________ Round.

A) Kennedy
B) Uruguay
C) Geneva
D) Tokyo

Answer 3

B

Question 4

Country X treats foreign firms the same way it treats domestic firms. Country X most likely engages in ________.

A) trade balancing
B) national treatment
C) mercantilism
D) foreign treatment

Question 5

The GATT rounds focused on decreasing ________.

A) dumping
B) trade tariffs
C) preferential treatment
D) domestic industry subsidies

Question 6

Which round created the WTO?

A) the Uruguay Round
B) the Doha Round
C) the Geneva Round
D) the Tokyo Round

Question 7

What is the best means of promoting economic development in Mexico?

A) trade
B) mercantilism
C) protectionism
D) export substitutions

Question 8

Under GATT, tariffs fell from about ________ in 1948 to about ________ in 2005.

A) 20 percent; 4 percent
B) 28 percent; 5 percent
C) 40 percent; 3 percent
D) 60 percent; 10 percent

Question 9

What organization replaced the GATT?

A) World Bank
B) World Trade Organization
C) International Trade Commission
D) NAFTA

Question 10

What countries are granted the most-favored-nation status under the GATT?

A) less-developed nations
B) GATT member countries
C) any country that requests it
D) only members of the WTO

Question 11

The ________ requires that any preferential treatment granted to one country must be extended to all countries.

A) GATT
B) WTO
C) export promotion system
D) most favored nation principle

Question 12

In 2017, Mexico's exports of services to the United States totaled ________ billion dollars.

A) $90
B) $35.4
C) $26.3
D) $45.2

Question 13

The primary goal of the ________ was to promote a free and competitive international trading environment.

A) Smoot-Hawley Act
B) International Trade Organization
C) World Trade Organization
D) General Agreement on Tariffs and Trade

Question 14

GATT is an acronym for ________.

A) General Argument for Taxes and Tariffs
B) General Agreement on Tariffs and Trade
C) Group Accord on Trade Tendencies
D) Grace, Action, Trust, and Trade

Question 15

Which country represents the biggest threat to Mexico's trade-driven economy?

A) Taiwan
B) Vietnam
C) China
D) Brazil

Question 16

Mexico relied on which of the following trade activities between 1917 and 1982?

A) low import tariffs
B) foreign direct investment restrictions
C) privatization of key industries
D) membership in GATT and the WTO

Question 17

The cumulative effect of GATT in developed countries was a ________.

A) substantial reduction in tariffs
B) small increase in tariffs
C) substantial increase in tariffs
D) reduction in world trade

Question 18

The United States, a GATT member, lowers its tariffs to Country X, a developing country, but requires the normal tariff for all other countries. The United States is most likely using a ________.

A) generalized system of preferences
B) normal trade relations system
C) staggered system of taxation
D) cumulative tariff system

Question 19

The Smoot-Hawley Act ________.

A) lowered tariffs to encourage trade
B) raised tariffs to protect domestic industries
C) designated the International Trade Organization as an independent party in trade negotiations
D) required that countries treat each other on a nondiscriminatory basis and outlawed unfair trading practices

Question 20

What do many labor unions believe to be missing in the WTO's objectives?

A) job security
B) technical training
C) increased service trade
D) foreign agricultural subsidies

Question 21

Which of the following countries are not part of the North American Free Trade Agreement (NAFTA)?

A) United States
B) Canada
C) Mexico
D) Honduras

Question 22

As a participant at the Doha Round, you would experience the most negotiation difficulties in the area of ________.

A) agricultural goods
B) tariff reductions
C) foreign exchange
D) service trade

Question 23

GATT negotiations have led to dramatic growth in world trade since the end of World War II.

Question 24

A common market ________.

A) is complete political and economic integration of two or more countries
B) requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, eliminate barriers to the movement of the factors of production, and coordinate economic policies
C) eliminates trade barriers among member countries
D) requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, and eliminate barriers to the movement of the factors of production

Question 25

Which GATT Round led to the creation of the WTO?

A) Doha
B) Geneva
C) Uruguay
D) Kennedy

Question 26

Now that it has gained entry to the World Trade Organization, China represents a threat to Mexico as a low-cost manufacturing location.

Question 27

Salvo Software develops computer games and business software systems that are popular throughout the world. Like many software firms, Salvo has experienced problems with illegal counterfeiting of its products. Given this concern, which of the following would be of most interest to Salvo?

A) TRIMS
B) BARS
C) TRIPS
D) GATS

Question 28

What are the three primary goals of the World Trade Organization? Do you believe the WTO has been successful? Why or why not?

Question 29

A customs union ________.

A) is complete political and economic integration of two or more countries
B) requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, eliminate barriers to the movement of the factors of production, and coordinate economic policies
C) requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, and eliminate barriers to the movement of the factors of production
D) involves the elimination of internal trade barriers among member countries and the adoption of common external trade policies toward nonmembers

Question 30

Country X and Country Z have established a complete political and economic integration. The countries are most likely engaged in a(n) ________.

A) customs union
B) common market
C) economic union
D) political union

Question 31

An economic union ________.

A) requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, abolish restrictions on the movement of the factors of production, and coordinate economic policies
B) eliminates trade barriers among member countries
C) requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, and eliminate barriers to the movement of the factors of production
D) involves the elimination of internal trade barriers among member countries and the adoption of common external trade policies toward nonmembers

Question 32

A(n) ________ combines the elimination of internal trade barriers among member countries with the adoption of common external trade policies toward nonmembers.

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

Question 33

What is the most-favored-nation principle? What are the two exceptions to the most-favored-nation principle? Why was MFN status changed to normal trade relations (NTR) status?

Question 34

Parson's Pet Products, an Australian firm, ships many products to Canada. In order to take advantage of low trade barriers in the United States, Parson's Pet Products ships its items first to the United States and then re-exports the goods to Canada. Parson's Pet Products is most likely using ________.

A) trade circumvention
B) origination manipulation
C) trade deflection
D) external circumvention

Question 35

How does the WTO differ from the GATT?

Question 36

A(n) ________ eliminates trade barriers among member countries.

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

Question 37

The integration of the 13 separate colonies operating under separate Articles of Confederation into a new country, the United States of America, is an example of ________.

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

Question 38

A free trade area ________.

A) is complete political and economic integration of two or more countries
B) eliminates trade barriers among member countries
C) allows workers to move freely among trade nations
D) avoids problems stemming from trade deflections

Question 39

Country X has violated its WTO obligations. How would the WTO handle the problem?

Question 40

In a(n) ________, members eliminate internal trade barriers, adopt a common external policy toward nonmembers, and eliminate barriers to the movement of the factors of production.

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

Question 41

The GATT is an agreement, not an organization.

Question 42

Prior to GATT, high tariffs were the most serious impediment to world trade.

Question 43

________ is an example of a free trade agreement.

A) NAFTA
B) Mercosur
C) European Union
D) APEC

Question 44

A free trade area requires members to eliminate internal trade barriers and establish a common external trade policy.

Question 45

A political union ________.

A) is complete political and economic integration of two or more countries
B) eliminates trade barriers among member countries and reduces trade deflection
C) requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, and eliminate barriers to the movement of the factors of production
D) involves the elimination of internal trade barriers among member countries and the adoption of common external trade policies toward nonmembers

Question 46

Country X wants to encourage trade by eliminating trade barriers with the three countries along its borders. However, Country X wants each of the countries to be able to establish their own trade policies even though this may lead to problems with trade deflection. Which form of economic integration is Country X most likely considering?

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

Question 47

What is a customs union? Provide an example of a customs union.

Question 48

The Multifibre Agreement is a relatively new part of the WTO's focus on reducing barriers in agricultural trade.

Question 49

What is the difference between an economic union and a political union? Which one characterizes the European Union? Why?

Question 50

What is the most important characteristic of regional trading blocs?

Question 51

A screwdriver plant is a factory in which little transformation of a product is undertaken.

Question 52

In the last decade, there has been a decrease in the number of trading blocs.

Question 53

The GATT seeks to reduce barriers to international trade.

Question 54

For most of their histories, Australia and New Zealand have been trade rivals.

Question 55

Each form of economic integration benefits a nation as a whole, but can hurt certain sectors or communities within the economy.

Question 56

Economic integration is typically beneficial to all sectors within an economy.

Question 57

What is a common market? What is the primary benefit of the common market to European firms and European workers?

Question 58

A ________ is the third step along the path to total economic integration.

A) commercial market
B) economic union
C) customs union
D) free trade area

Question 59

What is a free trade area? Provide an example of a free trade area.

Question 60

One weakness of the WTO is that the enforcement of the GATT was stronger.

Question 61

Which of the following signed the Treaty of Rome?

A) France
B) East Germany
C) the United Kingdom
D) Spain

Question 62

Explain the five forms of economic integration and provide an example of each.

Question 63

What type of economic integration is exemplified by NAFTA? How has NAFTA benefited the countries involved?

Question 64

The Treaty for Europe is also known as the ________.

A) Treaty of Rome
B) Maastricht Treaty
C) Treaty of Amsterdam
D) Paris Treaty

Question 65

The ________ concept states that if one EU member state determines that a product is appropriate for sale, then all other EU members are also obliged to do so under the provisions of the Treaty of Rome.

A) harmonization
B) arbitration
C) mutual recognition
D) free movement of goods

Question 66

Which organization is responsible for controlling the Eurozone's money supply, interest rates, and inflation?

A) European Central Bank
B) European Commission
C) European Parliament
D) European Court of Justice

Question 67

What function is served by the European Commission?

A) executive
B) administrative
C) legislative
D) judicial

Question 68

The ________ is responsible for proposing legislation, implementing the provisions of the Treaty of Rome, protecting EU interests in political debates, and administering the EU's permanent bureaucracy.

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

Question 69

How many countries are part of the European Union, after the United Kingdom separates from the Union?

A) 10
B) 12
C) 20
D) 27

Question 70

What agreement triggered the establishment of the European Economic Community

A) GATT
B) Treaty of Rome
C) WTO
D) Uruguay Round

Question 71

Which of the following was a component of the Treaty of Amsterdam?

A) a strong commitment to address high unemployment in the European Union
B) a plan to limit the role of the European Parliament
C) termination of a two-track system
D) enforcement of GATT policies

Question 72

The European Union uses a(n) ________ in areas such as health, consumer policy, and free movement of workers.

A) co-decision procedure
B) unanimous vote
C) qualified majority
D) consensus

Question 73

Which EU organization is considered the most powerful?

A) Council of the European Union
B) European Commission
C) European Parliament
D) European Court of Justice

Question 74

Eurozone participants have agreed to limit their annual government deficits to no more than ________ of their GDPs.

A) 3 percent
B) 5 percent
C) 7 percent
D) 9 percent

Question 75

Which of the following is a member of the European Union?

A) Kosovo
B) Switzerland
C) Norway
D) Latvia

Question 76

The 12 member countries became known as the European Union when the ________ was signed in 1993.

A) Treaty of Rome
B) Treaty of Geneva
C) Genoa Agreement
D) Treaty of Maastricht

Question 77

How did the European Union initially eliminate conflicts among member countries?

A) mandatory arbitration
B) harmonization
C) negotiation
D) legislation

Question 78

Which of the following is not an organization that governs the European Union?

A) Council of the European Union
B) European Commission
C) European Trade Council
D) European Court of Justice

Question 79

What function is performed by the European Court of Justice?

A) administrative
B) executive oversight
C) interpretation of law
D) managerial

Question 80

The Cassis de Dijon case brought about the concept of ________ among member nations in the European Union.

A) harmonization
B) arbitration
C) mutual recognition
D) free movement of goods