Deck 9: Economic Development and the Americas

Question 1

In static economies, consumption patterns change rapidly.

Answer 1

False
Explanation: In static economies, consumption patterns become rigid, and marketing is typically nothing more than a supply effort. In a dynamic economy, consumption patterns change rapidly.

Question 2

The more developed an economy, the lesser the variety of marketing functions demanded.

Answer 2

False
Explanation: The more developed an economy, the greater the variety of marketing functions demanded, and the more sophisticated and specialized the institutions become to perform marketing functions.

Question 3

Among three kinds of distances that international marketers must traverse, time zones have the greatest influence on the success of their commercial efforts abroad.

Answer 3

True
Explanation: Time zones make a difference. Jet lag is an important problem. Among three kinds of distances that international marketers must traverse-miles, time zones, and cultural distances-time zones have the greatest influence on the success of their commercial efforts abroad.

Question 4

The liberalization of trade and investment policies in developing countries are changing the way countries will trade and prosper in the 21^st century.

Question 5

The newly industrialized countries have per capita incomes lower than LDCs.

Question 6

Brazil is a fully industrialized country.

Question 7

The UN classification has been criticized because it no longer seems relevant in the rapidly industrializing world.

Question 8

When the only marketing functions performed are demand creation and physical distribution, the marketing process is said to be in the mass distribution substage.

Question 9

Economic growth is measured solely in economic goals.

Question 10

The quality of an infrastructure directly affects a country's economic growth potential.

Question 11

The level of political stability in a country is the single most important environmental element to which the foreign marketer must adjust the marketing task.

Question 12

The trend toward privatization is currently a major economic phenomenon in industrialized as well as in developing countries.

Question 13

The marketing process substage in the United States economy from 1950 to the present is mass production.

Question 14

Privatization of industries released immediate capital to invest in strategic areas.

Question 15

Economic development means rapid economic growth and increases in consumer demand.

Question 16

High transaction costs associated with the use of the Internet prevents smaller firms in emerging countries from selling into a global market.

Question 17

Newly industrialized countries (NICs) are characterized by markets free from restrictive trade practices and the presence of significant free market reforms.

Question 18

According to the UN classification, industrially developing countries just entering world trade with relatively low per capita incomes are referred to as more-developed countries.

Question 19

Mercosur is a free trade group formed by the United States of America.

Question 20

Considering the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, Brazil falls under the group of more-developed countries (MDCs).

Question 21

As a country develops, market behavior changes and eventually it leads to market segmentation.

Question 22

Which of the following is considered as the single most important environmental element of a country to which the foreign marketer must adjust the marketing task?

A) Political stability
B) Economic level
C) Social norms
D) Literacy level
E) Cultural orientation

Question 23

Which of the following is a fully industrialized country?

A) Brazil
B) Russia
C) Germany
D) Argentina
E) Vietnam

Question 24

Uruguay is a member of NAFTA.

Question 25

The DR-CAFTA includes a wide array of tariff reductions aimed at increasing trade and employment.

Question 26

What is occurring in the BEMs is analogous to the situation after World War II when tremendous demand was created during the reconstruction of Europe.

Question 27

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, which category does an industrialized country with high per capita income fall under?

A) Less-developed countries
B) Least-developed countries
C) More-developed countries
D) Frontier markets
E) Pre-emerging markets

Question 28

_____ refers to an increase in national production that is reflected by an increase in the average per capita gross domestic product (GDP) or gross national income (GNI).

A) Economic repression
B) Economic duress
C) Economic equilibrium
D) Economic development
E) Economic sustainability

Question 29

Which of the following statements is true about MDCs (more-developed countries)?

A) These countries are just entering world trade.
B) Majority of their populations stay in rural areas.
C) These countries have high per capita incomes.
D) These countries have little world trade involvement.
E) These countries have mainly agrarian economies.

Question 30

Mercosur is the largest common-market agreement in the Americas.

Question 31

The United States-Canada Free Trade Area (CFTA) was a customs union like the European Community.

Question 32

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, _____ consist of industrially developing countries just entering world trade with relatively low per capita income.

A) first world countries
B) least-developed countries
C) less-developed countries
D) Third World countries
E) more-developed countries

Question 33

Which of the following is NOT one of the factors directly changing the way countries trade and prosper in the twenty-first century?

A) The transition from socialist to market-driven economies
B) Liberalization of trade and investment policies in developing countries
C) The transfer of public-sector enterprises to the private sector
D) The rapid development of regional market alliances
E) The increase in military capabilities of countries around the world

Question 34

The Mercosur envisioned central institutions similar to those of the European Union institutions.

Question 35

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, Canada falls under the category of _____.

A) Third World countries
B) least-developed countries
C) more-developed countries
D) less-developed countries
E) pre-emerging countries

Question 36

When the marketing process in a country is in the commercial-transition substage, the only marketing function performed is physical distribution.

Question 37

_____ classifies a country's stage of economic development on the basis of its level of industrialization into three categories and the three categories are MIDCs, LDCs, and LLDCs.

A) The U.S. Department of Commerce
B) The North Atlantic Treaty Organization
C) The International Organization for Standardization
D) The United Nations
E) The International Development Association

Question 38

Dynamic economies differ from static economies in that dynamic economies:

A) need not match marketing efforts with the market needs and wants.
B) have rapidly changing consumption patterns.
C) have a highly predictable and loyal consumer base.
D) define marketing as typically nothing more than a supply effort.
E) do not require a marketer to be prepared for economic shifts and emerging markets.

Question 39

One of the most important aspects of LAIA that differs from LAFTA is the differential treatment of member countries according to their level of economic development.

Question 40

Big emerging markets are of major political importance within their regions.

Question 41

Which of the following is true of privatization of state-owned enterprises?

A) It leads to a decline in productivity throughout the private sector.
B) It was done in order to stop the drain on national budgets due to inefficient state-owned enterprises.
C) It blocks capital mobility to strategic areas.
D) It leads to a change in political leadership.
E) It acts as a set back to the process of modernization.

Question 42

_____ is an economy's arbitrator between productive capacity and consumer demand.

A) Warehousing
B) Marketing
C) Convergence
D) Procurement
E) Outsourcing

Question 43

_____ is a free trade group formed by Argentina, Brazil, Paraguay, and Uruguay.

A) NAFTA
B) Caricom
C) Mercosur
D) SACU
E) DR-CAFTA

Question 44

When countries sell off state-owned enterprises and privatize them, it usually results in a(n):

A) lack of accommodation of outside investors.
B) decline in productivity throughout the private sector.
C) release of capital to invest in strategic areas.
D) instant change in political leadership.
E) continuing drain on future natural resources.

Question 45

Paved roads, railroads, seaports, communication networks, and financial networks are illustrations of _____.

A) environmental resources
B) inventory
C) infrastructure
D) factors of production
E) freight claims

Question 46

According to the United Nations' stages of economic development for classifying countries with respect to levels of industrialization, a country that is industrially underdeveloped, agrarian, has subsistence society with rural populations, and has extremely low per capita income levels falls under the category of _____.

A) first world countries
B) least-developed countries
C) less-developed countries
D) newly industrialized countries
E) frontier markets

Question 47

Which of the following is true about the present state of foreign businesses in most developing countries?

A) Foreign investors are seen as vital partners in economic development.
B) Today, most developing countries have more conservative attitudes toward foreign investments than before.
C) Foreign firms are expropriated and charged with excessively high tariffs and quotas by all developing countries.
D) Foreign businesses are not allowed to raise money by means of shares in developing countries.
E) Foreign investment is banned in most developing countries.

Question 48

Which of the following countries was involved in the formation of the free trade group Mercosur?

A) Australia
B) China
C) Argentina
D) Russia
E) Thailand

Question 49

Which of the following is a characteristic feature of privatization of state-owned enterprises?

A) It normally has a negative effect on economic growth.
B) It blocks investment of capital in strategic areas.
C) It often leads to modernization.
D) It results in a draining of the future national resources.
E) It brings about a political shift in the country.

Question 50

Chile, Brazil, Mexico, South Korea, Singapore, and Taiwan are examples of _____ countries.

A) least-developed
B) Third World
C) underdeveloped
D) newly industrialized
E) closed economy

Question 51

During the early market growth of many countries, the first large open market was _____.

A) Russia
B) the United States
C) Australia
D) Germany
E) the United Kingdom

Question 52

Which of the following is an indicator of economic development?

A) Population expansion
B) Expanding state ownership
C) Extent of social overhead capital
D) Social reformation
E) Cultural diversity

Question 53

Which of the following is NOT a factor that has contributed to the rapid economic growth of NICs (newly industrialized countries)?

A) Political stability
B) Well-established economic and legal reforms
C) Decrease in labor population
D) Outward orientation
E) Entrepreneurship

Question 54

Newly industrialized countries (NICs) differ from less-developed countries in that NICs:

A) include Canada, the United States, and Germany.
B) attract insignificant or no foreign investment.
C) have per capita incomes that are lower than other developing countries.
D) have moved away from restrictive trade practices and instituted significant free market reforms.
E) have shown slow industrialization and expansion of targeted industries.

Question 55

Economic planners are often more _____ oriented than marketing oriented.

A) production
B) advertising
C) logistics
D) theory
E) distribution

Question 56

Most newly industrialized countries (NICs) have moved away from restrictive trade practices and instituted significant free market reforms. As a result, these countries have:

A) attracted both trade and foreign direct investment.
B) become poor importers as well as exporters.
C) experienced low gross national income.
D) stepped up their protectionist policies.
E) majorly given up on their domestic markets.

Question 57

Which of the following countries has 100 percent literacy rate?

A) Mexico
B) Canada
C) Colombia
D) Argentina
E) Peru

Question 58

Which of the following statements is true about the Internet?

A) The Internet further increases the advantage of rich economies over the poor ones.
B) The Internet increases market transaction costs.
C) The Internet allows for innovative services but at a relatively higher cost.
D) The Internet enables smaller firms in emerging economies to sell into a global market.
E) The Internet decreases the economies of scale from vertical integration.

Question 59

The United Nations' classification of stages of economic development has been mainly criticized because:

A) it no longer seems relevant in the rapidly industrializing world.
B) countries classified as LLDCs are growing at a very rapid rate.
C) It no longer takes into account social overhead capital as an indicator of economic development.
D) it only focuses on the literacy level in a country.
E) countries that are classified as LDCs are industrializing at a slow rate.

Question 60

Economic planners are most likely to be least concerned with the problems related to _____.

A) production
B) finance
C) expenditure
D) distribution
E) investment

Question 61

Alexia is geographically large and represents a sizable market for a wide range of products. It has a strong growth rate and is considered as the regional economic driver. Based on this information, Alexia can be classified as a _____.

A) grey market
B) big emerging market
C) two-sided market
D) frontier market
E) niche market

Question 62

In the context of the evolution of the marketing process, which of the following would be considered to be the most fundamental substage (first substage)?

A) Surplus commodity product
B) Commercial-transition
C) Mass production
D) Mass distribution
E) Self-sufficient

Question 63

What is happening in BEMs today is analogous to what happened in:

A) Saudi Arabia in the 1800s.
B) India during the rule of the British Empire.
C) Russia after the fall of the Czar.
D) Europe after World War II.
E) Iraq between 1890 and 1990.

Question 64

The marketing process in the U.S between 1885 and 1914 mainly focused on _____.

A) mass distribution
B) self-sufficiency
C) mass production
D) surplus commodity product
E) commercial-transition

Question 65

Estimating market potential in less-developed countries involves additional challenges, but most of the difficulty arises from the _____.

A) coexistence of three distinct kinds of markets in each country
B) dependence of the markets on the industrialized sectors
C) lower wage rates of the workforce
D) high fluctuation in the currency rate
E) higher concentration of population residing in the urban areas

Question 66

Markets that are geographically large, have strong growth rates, are regional economic drivers, and represent sizable markets for a wide range of products are known as _____.

A) frontier markets
B) big emerging markets
C) two-sided markets
D) niche markets
E) grey markets

Question 67

All of the following are traits of big emerging markets (BEMs) EXCEPT:

A) they import less than smaller markets.
B) they are all physically large.
C) they have significant populations.
D) they are regional economic drivers.
E) they are of major political importance within their regions.

Question 68

Which of the following is true of the CFTA?

A) It was designed to establish similar literacy levels in North American states.
B) It created several independent commercial markets for goods and services.
C) It was a customs union like the European Community.
D) It involved both economic and political unions.
E) It provided only for the elimination of tariffs and other trade barriers between the United States and Canada.

Question 69

A market in which the only marketing function performed is exchange is most likely to be classified under the _____ stage.

A) surplus commodity product
B) commercial-transition
C) mass production
D) mass distribution
E) self-sufficient

Question 70

Which of the following countries has been identified by the Department of Commerce as a BEM (big emerging market)?

A) Philippines
B) Egypt
C) Venezuela
D) Mexico
E) Nicaragua

Question 71

When the marketing process is characterized by mass distribution, all of the following marketing functions are performed EXCEPT _____.

A) demand creation
B) market information analysis
C) physical distribution
D) exchange
E) market and product planning, development

Question 72

Which country announced that it would seek free trade with the United States immediately after the ratification of the United States-Canada Free Trade Area (CFTA)?

A) Germany
B) Australia
C) Mexico
D) The United Kingdom
E) China

Question 73

Identify the substage in the evolution of the marketing process when the only marketing functions performed are demand creation and physical distribution.

A) Mass production
B) Global distribution
C) Self-sufficient
D) Surplus commodity product
E) Small scale

Question 74

The level of market development roughly parallels the stages of _____.

A) economic stagnation
B) economic duress
C) economic repression
D) economic equilibrium
E) economic development

Question 75

Which of the following substages best characterizes the United States today with respect to the evolution of the marketing process?

A) Mass production
B) Commercial-transition
C) Self-sufficiency
D) Surplus commodity product
E) Mass distribution

Question 76

The three members of the North American Free Trade Agreement (NAFTA) are:

A) the United States, the United Kingdom, and France.
B) the United States, Cuba, and Uruguay.
C) Canada, China, and Japan.
D) the United States, France, and Germany.
E) Canada, Mexico, and the United States.

Question 77

Which of the following kinds of market sectors is also known as the "new middle class"?

A) The traditional sector
B) The modern sector
C) The rural services sector
D) The transitional sector
E) The agricultural sector

Question 78

The transitional sector differs from the modern urban sector in that the transitional sector:

A) is an exclusively agriculture-oriented sector.
B) consists of population that works in the country side.
C) consists of an expanding Westernized middle class.
D) represents the high-income urban slums.
E) consists of population that moves from the country to the large cities.

Question 79

According to the evolution of the marketing process, when the only marketing functions performed are demand creation, physical distribution, and market information analysis, the marketing process is in the _____ substage.

A) mass production
B) commercial-transition
C) self-sufficient
D) surplus commodity product
E) small scale

Question 80

Which of the following countries is a part of the free trade area known as CFTA?

A) France
B) Uruguay
C) The United States
D) Argentina
E) Brazil