Deck 2: Economic Environment

Question 1

According to the textbook, Japan was expected to be ranked number _______ on the 2005 Country Innovativeness Ranking.

A) one
B) two
C) three
D) four
E) five

Answer 1

A

Question 2

Which country consistently achieves the highest growth rates in GDP?

A) United States
B) Germany
C) Japan
D) Vietnam
E) China

Answer 2

E

Question 3

Triad regions of the world include:

A) North America, Western Europe and Africa
B) North America, Western Europe and Japan
C) North America, Western Europe and Asia
D) North America, Western Europe and South America
E) North America, Western Europe and China

Answer 3

B

Question 4

In 2012, the GDP of the United States was ____________.

A) $500 billion.
B) $800 billion.
C) $1 trillion.
D) $8 trillion.
E) $16 trillion.

Question 5

Which of the following countries is NOT on the list of top 10 exporters?

A) Korea
B) Mexico
C) China
D) United States
E) Both a and b

Question 6

In the country competitiveness report in 2008/09, three of the top ten countries are from _________________ countries.

A) South American
B) African
C) Asian
D) Nordic
E) None of the

Question 7

BEMs stand for:

A) Big Electronic Markets
B) Big Efficient Market
C) Big Effective Markets
D) Big Emerging Markets
E) None of the above

Question 8

The ________________ volume of international trade in currencies exceeds the annual value of the trade in goods and services.

A) daily
B) weekly
C) monthly
D) annual
E) none of the above

Question 9

In general, the larger the country's domestic economy, the less dependent it tends to be on exports and imports relative to its ________________.

A) gross domestic product (GDP).
B) gross domestic income.
C) gross domestic spending.
D) gross domestic capital.
E) global domestic knowledge.

Question 10

When firms invest in manufacturing and distribution facilities outside their home countries, they add the stock of _________________________________.

A) global direct investment.
B) regional direct investment.
C) local direct investment.
D) foreign direct investment (FDI).
E) none of the above.

Question 11

China's average growth rate in GDP has been over:

A) 2 percent
B) 4 percent
C) 6 percent
D) 8 percent
E) 9 percent

Question 12

An example of portfolio investment (or indirect investment) in foreign markets is:

A) production facilities.
B) computers.
C) stocks and bonds.
D) buildings.
E) manufacturing facilities.

Question 13

Global economy is becoming more ____________________.

A) regional.
B) local.
C) isolated.
D) transnational.
E) intertwined.

Question 14

India's average growth rate in GDP has been over:

A) 3 percent
B) 5 percent
C) 7 percent
D) 9 percent
E) 10 percent

Question 15

The World Economic Forum's Global Competitiveness Report placed two Asian Tigers (Taiwan and Singapore) among the world's top ______
Economies (along with the Finland, United States, Sweden, Denmark, Iceland,
Switzerland, Norway, and Australia).

A) five
B) ten
C) twenty
D) twenty-five
E) thirty

Question 16

The United States was ranked number _______ on the 2005 Country Innovativeness Ranking.

A) one
B) two
C) four
D) five
E) six

Question 17

Country competitiveness is not a _____________ thing.

A) fixed
B) moving
C) temporary
D) dynamic
E) none of the above

Question 18

Which nation is the world's largest exporter?

A) United States
B) China
C) Netherlands
D) Germany
E) Japan

Question 19

Trading in foreign currencies has an effect on world trade. For example, a rise in the value of the local currency due to daily flows vis-à-vis other currencies makes
Exports:

A) less expensive.
B) more expensive.
C) come under government control.
D) parallel with imports.
E) be banned.

Question 20

__________________ refers to investment in foreign countries that are withdrawable at short notice (such as investment in foreign stocks and bonds).

A) Direct investment
B) Economic investment
C) International investment
D) Demand investment
E) Portfolio investment

Question 21

As of March 2, 2013, the World Trade Organization (WTO) has _________ member countries.

A) 123
B) 135
C) 142
D) 159
E) 180

Question 22

The World Trade Organization (WTO) was created in the _____________ of GATT talks---called the Uruguay Round.

A) fifth round
B) sixth round
C) seventh round
D) eighth round
E) ninth round

Question 23

Future trade flows are likely to move how?

A) Among the Triad nations
B) Between the Triad nations and the BEMs
C) Among the BEMs
D) Between the Triad nations and the developing world
E) None of the above

Question 24

New centers of innovative activity include which countries?

A) Ireland
B) Israel
C) Singapore
D) Taiwan
E) All of the above

Question 25

Which of the following countries is not considered to be a big emerging market?

A) Mexico
B) Brazil
C) Russia
D) India
E) China

Question 26

When GATT was successful in lowering tariff barriers to world trade, many nations created:

A) cartels.
B) keiretsus.
C) joint ventures.
D) nontariff barriers.
E) boycotts.

Question 27

One of the differences between WTO and GATT is that WTO's dispute settlement mechanism is:

A) inferior.
B) faster and more automatic.
C) very limited.
D) controlled by the World Bank.
E) controlled by the negotiation section of the United Nations.

Question 28

The World Trade Organization's (WTO) ninth round of trade talks which were launched in November 2001 is called:

A) the Doha Round.
B) the Seattle Round.
C) the Geneva Round
D) the New York Round.
E) the London Round.

Question 29

Which country has shown the most progress in competitiveness since 2005?

A) Hong Kong
B) Belgium
C) Germany
D) Switzerland
E) Japan

Question 30

The main operating principle of the General Agreements of Tariffs and Trade (GATT) was the concept of normal trade relations (NTR) status, formerly known as:

A) Early Favored Nation status.
B) Most Favored Nation status.
C) Late Favored Nation status.
D) the World Trade status.
E) the Best Nation status.

Question 31

Which of the top 10 countries in competitiveness does NOT suffer from a lack of natural resources?

A) Japan
B) Netherlands
C) Switzerland
D) Denmark
E) Canada

Question 32

The World Trade Organization was created in the eighth round of the GATT talks - called the ________________________ that lasted from 1986 to 1994.

A) Brussels Round
B) Paris Round
C) Morocco Round
D) Paraguay Round
E) none of the above

Question 33

Doha's Development Agenda (Doha Round) includes new trade talks-an actions program to resolve developing countries' complaints about the implementation of
Uruguay Round agreements, and an accord on ____________________________.

A) Trade Related Aspects of Intellectual Property Rights
B) Services Related Aspects of Intellectual Property Rights
C) Regional Related Aspects of Intellectual Property Rights
D) Local Related Aspects of Intellectual Property Rights
E) National Related Aspects of Intellectual Property Rights

Question 34

Why did Nokia lose market share in China?

A) Products were outdated
B) Products were too technical
C) Local producers appeared with a cheaper, adequate phone
D) Japan took away their market share
E) None of the above

Question 35

The World Trade Organization (WTO) took effect on:

A) January 1, 1994
B) January 1, 1995
C) January 1, 1996
D) January 1, 1997
E) January 1, 1998

Question 36

Perhaps the most important accomplishment of the latest GATT round was the establishment of:

A) the World Trade Organization (WTO).
B) the Asian Development Bank.
C) the World Bank.
D) the International Monetary Fund (IMF).
E) the International Finance Corp. (IFC).

Question 37

The International Trade Organization (ITO) was formed after:

A) World War I.
B) World War II.
C) the Korean war.
D) the Vietnam war
E) None of the above.

Question 38

With which country does the U.S. have the largest trade deficit?

A) Germany
B) Japan
C) Canada
D) India
E) China

Question 39

The WTO Work Program on _____________________ is in the process of defining the trade-related aspects of ___________________ that would fall under the
Parameters of WTO mandates.

A) business commerce
B) electronic commerce
C) equity commerce
D) network commerce
E) network commerce

Question 40

In December 1999, WTO launched what would have become the beginning of a ___________ round of negotiations inaugurated in Seattle, Washington.

A) fifth
B) sixth
C) seventh
D) eighth
E) ninth

Question 41

The effect of a monetary union is that members:

A) can buy goods from one another.
B) refuse to buy goods from nonmembers.
C) switch to a common currency and a central bank.
D) give up all sovereignty.
E) no longer recognize national boundaries.

Question 42

An example of a free trade area would be:

A) the European Union.
B) the Soviet Union.
C) the United Kingdom.
D) NAFTA.
E) the United Nations.

Question 43

When members of a free trade area add common external tariffs to the provisions of the free trade agreement, the free trade area becomes a:

A) cartel.
B) common market.
C) monetary union.
D) political union.
E) customs union.

Question 44

____________________ are highly interested in putting strong international intellectual property laws in place:

A) Developing nations
B) Developed nations
C) Asian countries
D) European countries
E) African countries

Question 45

The universal reason for forming trading blocs is to:

A) bypass tariff restrictions.
B) bypass legal restrictions.
C) bypass government controls.
D) ensure the economic growth and benefit of the participating countries.
E) make competition suffer.

Question 46

A ________________ eliminates all tariffs and barriers to trade among members, adopts a common set of external tariffs on nonmembers, and removes all restrictions
On the flow of capital and labor among member nations.

A) regional market
B) common market
C) monetary market
D) political market
E) customs market

Question 47

A monetary union represents the ____________ level of integration with a single common currency among politically independent countries.

A) first
B) second
C) third
D) fourth
E) fifth

Question 48

A ___________________ is a formal agreement among two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner
Countries.

A) trade union
B) regional cooperative
C) customs union
D) common market
E) free trade area

Question 49

Which of the following is an example of an international trading bloc?

A) World Trade Organization.
B) GATT.
C) the World Court in the Hague.
D) NAFTA.
E) United Nations

Question 50

An evolving trend in international economic activity is the formation of:

A) multinational advertising agencies.
B) multinational insurance agencies.
C) multinational trading blocs.
D) multinational purchasing agencies.
E) multinational courts.

Question 51

With respect to intellectual property rights, an example of an information-related product is:

A) computer hardware.
B) an automobile.
C) computer software.
D) jewelry.
E) a new drilling bit.

Question 52

One difference between a customs union and a free trade area is that the customs union:

A) adds external tariffs to nonmember countries.
B) adds higher taxes to its consumers.
C) refuses to import from nonmember nations.
D) demands that a common currency be used among members.
E) requires that member countries align themselves politically.

Question 53

NAFTA is the free trade area among the United States, Mexico, and ______________.

A) Canada
B) Argentina
C) Panama
D) Columbia
E) Brazil

Question 54

The Free Trade Areas of the Americas (FTAA) was proposed in __________________.

A) December 1994.
B) December 1995.
C) December 1996.
D) December 1997.
E) December 1998.

Question 55

UNCITRAL stands for:

A) United Nations Commission on International Trade Law.
B) United Nations Commission on International Trade Limits.
C) United Nations Commission on International Technical Law.
D) United Nations Commission on International Technical Trade.
E) None of the above.

Question 56

The new European currency, the euro, began its circulation in January ________.

A) 1998.
B) 1999.
C) 2000.
D) 2001
E) 2002.

Question 57

The primary difference between a common market and a customs union is that the common market:

A) adopts a common set of external tariffs on nonmembers.
B) eliminates all tariffs.
C) eliminates all trade barriers.
D) removes all restrictions on the flow of capital and labor among member nations.
E) the number of countries involved.

Question 58

One way around having your intellectual property copied (such as software) because of easy access is to sell:

A) demos.
B) to new markets.
C) to governments.
D) upgrades or ancillary products.
E) only to a chosen few.

Question 59

One hurdle that used to protect information from being acquired easily was that it was unfungible. Unfungible means:

A) information contained viruses.
B) information was expensive.
C) information could only be processed with proper equipment.
D) information was not for the uninformed.
E) it was difficult to replace one item with another.

Question 60

The Maastricht Treaty succeeded the:

A) Treaty of Brussels.
B) Treaty of Rome.
C) Treaty of Geneva.
D) Treaty of Paris.
E) Treaty of Vienna.

Question 61

The Maastricht Treaty is a(n):

A) economic union.
B) development union.
C) transnational union.
D) political union.
E) national union.

Question 62

The principle goal of a political union is that it:

A) can buy goods from one another.
B) can refuse to buy goods from nonmembers.
C) can switch to a common currency and a central bank.
D) gives up all sovereignty among individual members.
E) no longer recognizes national boundaries.

Question 63

Doha Round paved the way for China and Singapore to get full membership in the
WTO.

Question 64

In 2008/2009 Country Competitiveness Report, 5 of the top 10 countries are Asian countries.

Question 65

The world's largest exporting country is China.

Question 66

The U.S. government defines the multinational company for statistical purposes as a company that owns or controls ______________ or more of the voting securities, or
The equivalent, of at least one foreign business enterprise.

A) five percent
B) ten percent
C) fifteen percent
D) twenty percent
E) twenty-five percent

Question 67

FDI in services is controlled by U.S. firms.

Question 68

Researchers have reported that multinationals have not been as great a threat to countries' national sovereignty because multinationals have yet to solve the
Problem of:

A) demand.
B) size.
C) war.
D) religious conflict.
E) language differences.

Question 69

The sovereignty of _______________ will perhaps continue to weaken due to multinationals and the increasing integration of economies.

A) cities
B) nations
C) regions
D) trading blocs
E) none of the above

Question 70

GATT's successor is the World Trade Organization (WTO).

Question 71

The World Trade Organization (WTO) is a global institutional proponent of free trade.

Question 72

The last step of the possible integration forms is the:

A) cartel.
B) common market.
C) monetary union.
D) political union.
E) customs union.

Question 73

The world's largest importing country is the U.S.

Question 74

Over the Internet, any piece of electronically represented intellectual property can be
instantly copied anywhere in the world.

Question 75

MNCs that become global at their first inception are called:

A) born last firms.
B) born first firms.
C) born again firms.
D) born global firms.
E) none of the above

Question 76

Today, countries have become economically independent.

Question 77

As of March 2, 2013, the World Trade Organization (WTO) had 159 member
countries.

Question 78

The Triad Regions of the world (North America, Western Europe, and Japan) were the major economies in most of the 20^th century.

Question 79

The main operating principle of the General Agreements of Tariffs and Trade (GATT)
is the concept of the Highly Favored Nation status (HFN).

Question 80

The Uruguay Round set up an international body called the World Trade Organization
(WTO).