Deck 10: International Cooperation Among Nations

Question 1

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

Answer 1

D

Question 2

Mexico has trade agreements with all of the following countries except ________.

A) Japan
B) Chile
C) Israel
D) India

Answer 2

D

Question 3

What organization replaced the GATT?

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

Answer 3

B

Question 4

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 5

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 EU
D) ITO formation

Question 6

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

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

Question 7

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

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

Question 8

In which industry is the inadequate enforcement of laws prohibiting illegal usage, copying, or counterfeiting of intellectual property LEAST likely a problem?

A) fashion textiles
B) filmed entertainment
C) computer software
D) pharmaceuticals

Question 9

The U.S., a GATT member, lowers its tariffs to Country X, a developing country, but requires the normal tariff for all other countries. The U.S. 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 10

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 11

Both GATT and the WTO seek to promote ________.

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

Question 12

GATT is an acronym for ________.

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

Question 13

The GATT rounds focused on decreasing ________.

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

Question 14

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 15

Which of the following policies has Mexico implemented since 1982?

A) raising tariffs
B) discouraging FDI
C) privatizing state-owned enterprises
D) joining CARICOM and CEMAC

Question 16

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 17

Which of the following countries is not granted most-favored-nation status by the United States?

A) China
B) North Korea
C) Poland
D) Russia

Question 18

Mexico relied on all of the following trade activities between 1917 and 1982 EXCEPT ________.

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

Question 19

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 20

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 21

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 22

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 23

Which of the following did not sign the Treaty of Rome?

A) France
B) West Germany
C) the United Kingdom
D) Belgium

Question 24

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 25

Which of the following is not addressed by the Trade-Related Investment Measures Agreement (TRIMS)?

A) trade-balancing rules
B) foreign-exchange access
C) domestic sales requirements
D) protection of intellectual property rights

Question 26

________ is an example of a free trade agreement.

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

Question 27

What do many human rights and environmental activists believe is missing in the WTO's objectives?

A) protection for laborers
B) stronger union control
C) increased service trade
D) foreign agricultural subsidies

Question 28

How many countries are part of the European Union?

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

Question 29

An economic union ________.

A) 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
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 30

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 31

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 32

What agreement triggered the establishment of the European Union?

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

Question 33

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 34

Which of the following countries is not a member of the European Union?

A) Austria
B) Finland
C) Norway
D) Latvia

Question 35

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 36

Parson's Pet Products, an Australian firm, ships many products to Canada. In order to take advantage of low trade barriers in the U.S., Parson's Pet Products ships its items first to the U.S. and then reexports 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 37

In a(n) ________ members 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.

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

Question 38

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

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

Question 39

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 40

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 41

Which of the following was NOT a component of the Treaty of Amsterdam?

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

Question 42

What function is performed by the European Court of Justice?

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

Question 43

The EU 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 44

A ________ is a factory in which very little transformation of a product is undertaken.

A) maquiladora
B) screwdriver plant
C) greenfield operation
D) global shipping platform

Question 45

The European Free Trade Association has joined with the ________ to form the European Economic Area.

A) Mercosur
B) European Union
C) Commonwealth of Independent States
D) Benelux nations

Question 46

The Treaty for Europe is also known as the ________.

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

Question 47

Which of the following countries is not part of NAFTA?

A) Mexico
B) Canada
C) the United States
D) Greenland

Question 48

All of the following were elements of the Treaty of Lisbon EXCEPT ________.

A) allowing the European Commission to increase in size
B) strengthening the powers of the European Parliament
C) establishing a full-time President of the European Council
D) allowing national legislatures to voice formal concerns about EU laws

Question 49

Which country listed below is not a member of the European Free Trade Association?

A) Denmark
B) Liechtenstein
C) Norway
D) Switzerland

Question 50

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 51

Which round created the WTO?

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

Question 52

What function is served by the European Commission?

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

Question 53

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

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

Question 54

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 55

Which Canadian firm would most likely NOT be protected in Canada in accordance with NAFTA provisions?

A) Atwater Publishing Company
B) Barton Film Productions
C) Compton TV Studios
D) Dawson Energy

Question 56

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 57

How did the EU initially eliminate conflicts among member countries?

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

Question 58

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 59

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 60

What percentage of an automobile must be produced in the United States, Canada, and/or Mexico in order for it to be considered a North American product?

A) 37 percent
B) 50 percent
C) 62.5 percent
D) 75.5 percent

Question 61

Which country initiated the Caribbean Basin Initiative?

A) Venezuela
B) the United States
C) the Caribbean islands
D) Bermuda

Question 62

The ________ is an agreement to create a customs union among the governments of Argentina, Brazil, Paraguay, and Uruguay.

A) Mercosur Accord
B) ASEAN Free Trade Area
C) Andean Pact
D) Central America Common Market

Question 63

Executives at TVR Enterprises, an MNE based in Germany, feel threatened by a pending EU regulation that will require the MNE to reduce its production capacity. Which of the following actions is the most appropriate for TVR?

A) complying with the EU's mutual recognition laws
B) apply for a harmonization regulation with the EU
C) appealing to the European Court of Justice
D) lobbying the European Commission

Question 64

CVR Enterprises is based in the EU country that has the greatest number of votes in Parliament. Compton is most likely a ________ firm.

A) German
B) French
C) British
D) Italian

Question 65

Which regional trade association includes the Bahamas, Grenada, and Jamaica?

A) ASEAN
B) CARICOM
C) ANCOM
D) ECOWAS

Question 66

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 67

Country X wants to encourage trade by eliminating trade barriers with the three countries along its borders. Country X wants the group of countries to adopt a common external trade policy toward nonmembers and to allow citizens in any of the member countries to practice their trades in any of the member nations. 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 68

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

Question 69

Which GATT Round led to the creation of the WTO?

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

Question 70

The GATT is an agreement, not an organization.

Question 71

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

Question 72

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

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

Question 73

Natalie is employed by the governing organization of the EU that is responsible for proposing legislation, administering the EU's permanent bureaucracy, and implementing the provisions of the Treaty of Rome. Natalie most likely works for the ________.

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

Question 74

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

Question 75

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 76

Which of the following countries is not part of the Mercosur Accord?

A) Argentina
B) Guatemala
C) Paraguay
D) Uruguay

Question 77

The GATT seeks to reduce barriers to international trade.

Question 78

The ________ promotes free trade among Bolivia, Chile, Colombia, Ecuador, and Peru.

A) Mercosur Accord
B) Andean Community
C) Central America Common Market
D) Southern Cone Customs Union

Question 79

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

Question 80

Which of the following is not a regional trading bloc in Africa?

A) Southern African Development Community
B) Economic Community of Central African States
C) Economic Community of West African States
D) African Development Union