Deck 8: International Economic Integration and Institutions

Question 1

The ________________ is a strategy by which MNEs realign their organizational structures and value-added activities to reflect a regional market.

A) Defensive Export Substituting Investment
B) Offensive Export Substituting Investment
C) Rationalized Foreign Direct Investment
D) Reorganization Investment

Answer 1

D

Question 2

_____________ refers to the growing economic interdependencies of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, as well as through the rapid and widespread diffusion of technology and information.

A) Internationalization
B) Globalization
C) Transnational
D) None of the above

Answer 2

B

Question 3

_____________ is concerned with the removal of trade barriers or impediments between at least two participating nations and the establishment of cooperation and coordination between them.

A) Economic integration
B) Political integration
C) Common Market
D) None of the above

Answer 3

A

Question 4

With the exception of the ________, few regional agreements have specified the rules of non-tariff barrier reduction, intellectual property protection, and service trade.

A) NAFTA
B) APEC
C) EU
D) NBC

Question 5

_________________is NOT a member of the EU.

A) Denmark
B) Ireland
C) Spain
D) Russia

Question 6

NAFTA maintains all of the following U.S. standards except

A) health.
B) safety.
C) environmental.
D) product liability.

Question 7

In WTO's ministerial meeting in Doha in November 2001, several developing countries, such as _______________ voiced the point that rich nations have no rights to cal for a new round of talks until they have honored past commitments.

A) The United States and Canada
B) Japan and Italy
C) France and Germany
D) Malaysia and India

Question 8

Which of the following is NOT a NAFTA member?

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

Question 9

The IDA focuses on

A) very poor developing countries.
B) The World Bank.
C) The International Developing Aid Association
D) people who write tests.

Question 10

Prior to the _______________, early negotiations dealt primarily with reducing tariffs.

A) Geneva Round
B) Uruguay Round
C) Dillon Round
D) Kennedy Round

Question 11

The ________ size of the market improves economies of scale, which in turn elevate production nations.

A) decreased
B) increased
C) stable
D) fluxgate

Question 12

A group of producing countries that want to protect themselves from price fluctuations on goods traded internationally is called a(n)

A) community cartel.
B) monopoly.
C) cartel.
D) common cartel.

Question 13

Which is NOT a part of the World Bank Group?

A) International Financial Corporation
B) International Development Association
C) Multilateral Investment Guarantee Agency
D) Multinational Investment Guarantee Agency

Question 14

Which of the following is NOT a form of economic integration?

A) Free Trade Area
B) Customs mnion
C) Quota
D) Common market

Question 15

______________ is a particular customs union that allows not only free trade of products and services but also free mobility of production factors across national member borders.

A) Customs union
B) Economic union
C) Political union
D) Common market

Question 16

________________ is a particular common market that involves unification of monetary and fiscal policies.

A) Customs union
B) Economic union
C) Political union
D) Common market

Question 17

The _________________ is a strategy by which MNEs increase investment in, and heighten resource commitment to, the integrated region in pursuit of greater economic efficiency through scale economies and market expansion.

A) Defensive Export Substituting Investment
B) Offensive Export Substituting Investment
C) Rationalized Foreign Direct Investment
D) Reorganization Investment

Question 18

Which strategy listed below is intended to gain early position in the market?

A) Defensive Export Substituting Investment
B) Offensive Export Substituting Investment
C) Rationalized Foreign Direct Investment
D) Reorganization Investment

Question 19

The ___________________is a strategy by which MNEs choose to ensure market penetration by investing directly in the region before the region is officially integrated.

A) Defensive Export Substituting Investment
B) Offensive Export Substituting Investment
C) Rationalized Foreign Direct Investment
D) Reorganization Investment

Question 20

The ______________________ is a strategy by which MNEs defend their preexisting market share achieved through exports by switching to direct production inside the region.

A) Defensive Export Substituting Investment
B) Offensive Export Substituting Investment
C) Rationalized Foreign Direct Investment
D) Reorganization Investment

Question 21

A ___________ is a group of producing countries that wish to protect themselves from the wild fluctuations that often occur in the prices of certain commodities traded internationally.

A) commodity cartel
B) community cartel
C) global cartel
D) organizational cartel

Question 22

The Maastricht Treaty contains several high-impacting provisions. Which of the following is an exemption?

A) creates a common European currency
B) requirement for getting visa when traveling within EU countries
C) cooperation in the fields of justice and domestic affairs
D) to be a more active role in areas such as trans-European transport and environmental protection

Question 23

NAFTA also includes side agreements on

A) labor adjustment
B) environmental protection
C) import surges
D) all of the above

Question 24

Developing countries hope to solve their problems via the UNCTAD. Which of the following would be an exemption?

A) Their share in world trade is decreasing and their terms of trade with developed countries are deteriorating.
B) Markets of developed countries are not sufficiently open to manufactured products of developing countries.
C) Help with excess capital for investment in other countries
D) Inadequacy in funds and aids given by the developed countries

Question 25

The International Development Association, or IDA, established in 1960, concentrates on assisting the

A) least-developed nations
B) highly developed nations
C) capitalistic nations
D) industrial nations

Question 26

Which of the following is NOT one of the objectives of THE WTO?

A) settling trade disputes
B) reviewing national trade policies
C) creating trade quotas
D) assisting developing countries on trade policy issues, through technical assistance and training programs

Question 27

International economic integration is propelled by several levels of cooperation. They are

A) global and regional
B) global and commodity
C) regional and commodity
D) global, regional, and commodity

Question 28

Which of the following union is involved in the establishment of a common parliament and other political institutions?

A) Customs union
B) Economic union
C) Political union
D) Common market

Question 29

____________ requires the participating nations to become literally one nation in both an economic and political sense.

A) Customs union
B) Economic union
C) Political union
D) Common market

Question 30

_____________serves as a unit of account for the IMF and other international and regional organizations.

A) SRD
B) DRS
C) RDS
D) SDR

Question 31

The IMF and the World Bank together are called

A) Bretton Woods Institutions.
B) World Economic Institutions.
C) World Trade Institutions.
D) International Institutions.

Question 32

Which is a function of the WTO?

A) to provide a forum for dealing with various emerging issues
B) to enforce fair labor laws
C) to police all international trading
D) to tell other nations how to trade

Question 33

The World Trade Organization is an example of a multilateral cooperation.

Question 34

The EU is heading toward the complete political union form of economic integration.

Question 35

LAFTA is an example of a free trade area form of economic integration.

Question 36

The IMF is headed by a Board of Governors, composed of representatives from all member countries.

Question 37

The WTO functions as a united dispute settlement system for members through its Dispute Settlement Body consisting of representatives from every WTO member.

Question 38

NAFTA is the first reciprocal free trade accord between industrial countries and a developing nation.

Question 39

Three affiliates of the World Bank are IDA, IFC, and MIGA.

Question 40

The IMF and World Bank are called the Bretton Woods Institutions because they were both established at Bretton Woods, New Hampshire.

Question 41

Escape clauses are allowances prohibited by the WTO.

Question 42

The three most fundamental institutions affecting global level cooperation of nations are the WTO, the World Bank, and the IMF.

Question 43

Common markets are Customs Unions that allow free trade and free mobility of production factors.

Question 44

The difference between free trade areas and customs unions is that member nations must conduct and pursue common external commercial relations.

Question 45

Globalization refers to the declining economic interdependence of countries worldwide.

Question 46

The World Trade Organization, the World Bank, and the International Monetary Fund are the three most fundamental institutions affecting global-level cooperation of nations.

Question 47

The World Bank is a multilateral trade organization aiming at international trade liberalizations.

Question 48

The WTO's top-level decision-making body is the Delegate Conference.

Question 49

The sale of imported goods at prices below what a company charges in its home market is called

A) dumping.
B) import deposit.
C) unfair market practice.
D) illegal market practice.

Question 50

The WTO is

A) a multinational trade organization aiming at international trade liberalization.
B) an international organization targeting unfair trade practices.
C) a trade organization seeking to enforce trade regulations.
D) a trade organization seeking to prohibit current trade practices.

Question 51

Which is NOT a form of economic integration?

A) free trade areas
B) customs unions
C) common markets
D) multicultural corporation

Question 52

Defensive export substituting investment is intended to gain early position in the market, which is anticipated to grow rapidly as a result of an integration program.

Question 53

Strategic choice depends on a company's current position in the regional market, the length of time it has had presence in the region, and the industry to which it belongs.

Question 54

The rationalized foreign direct investment is a strategy by which MNEs increase investment in, and heighten resource commitment to, the integrated region in pursuit of greater economic efficiency through scale economies and market expansion.

Question 55

Firms realign investment capital among members of the trading bloc once protective barriers have been removed altogether. This is an example of rationalized foreign direct investment.

Question 56

Cartel members may also seek lower, as well as more stable, prices for their goods.

Question 57

NAFTA also includes side agreements on labor adjustment, technology, and import surges.

Question 58

Multilateral cooperation occurs when participating nations are bound by rules, principles, or responsibilities stipulated in commonly agreed-to agreements.

Question 59

Economic Union is similar to a free trade area except that member nations must conduct and pursue common external commercial relations such as common tariff policies on imports from non-member nations.

Question 60

Economic integration is concerned with increasing trade barriers or impediments between at least two participating nations and the establishment of cooperation and coordination between them.

Question 61

The WTO has been viewed at the "club of rich nations" by some developing countries.

Question 62

Economic integration is the removal of trade barriers between two participating nations.