Deck 2: The economic environment

Question 1

It is estimated that the total world population exceeded 15 billion people in 2012.

Answer 1

False

Question 2

There is a close relationship between economic and social development and therefore many economic figures can be used as social indicators.

Answer 2

True

Question 3

The GDP per capita of the USA is higher than the GDP per capita of Australia.

Answer 3

False

Question 4

The countries that are part of the Group of Eight are Canada, France, Germany, Italy, Japan, Russia, UK and the USA.

Question 5

One factor behind the overall growth in households, and the subsequent decline in their average size, has been the increase in the numbers of divorced and sole survivor households.

Question 6

The Physical Quality of Life Index (PQLI)is a composite measure of the level of welfare in a country.It has two major components only: life expectancy and infant mortality.

Question 7

United Nations projections point to a population explosion, mainly in the developing nations.

Question 8

The world's developing countries have the most to gain from economic alliances like AFTA and ANCOM.

Question 9

Only 1 per cent of the world's private investment goes to sub-Saharan Africa.

Question 10

The more developed the economy, the more income distribution tends to converge towards the middle class.

Question 11

Since the recent GFC (global financial crisis), the World Trade Organization (WTO)is no longer the major, and most comprehensive, trade facilitation entity.

Question 12

In markets where urbanisation is recent and taking place rapidly, the marketer faces additional responsibility as a change agent, especially when incomes may be low and the conditions for the proper use of products may not be adequate.

Question 13

Despite an image of hopeless poverty, India has more middle-class consumers than Germany.

Question 14

NIEs, or newly industrialising economies, cover places like Hong Kong and Taiwan.

Question 15

OPEC is made up of 11 petroleum-exporting countries including Russia.

Question 16

Engel's laws state that as a family's income increases, the percentage spent on food will decrease but the percentage spent on housing and household operations will remain roughly constant.

Question 17

Japan has the third-largest GDP in the world, only behind the USA and China.

Question 18

Europe will show negative population growth for the next decades.

Question 19

Age distribution and life expectancy correlate heavily with the level of development of the market.

Question 20

China is economically developed in the east, north and west.

Question 21

The main dimensions of a market can be captured by considering variables such as:

A)those relating to the population and its various characteristics, education, infrastructure, geographical features and foreign involvement.
B)those relating to the population and its various characteristics, infrastructure, geographical features of the environment, and foreign involvement in the country.
C)those relating to the population, race, religion, education, infrastructure, geographical features and foreign involvement.
D)those relating to the population, race, religion, gender, education, infrastructure, geographical features, foreign involvement and environmental concerns.

Question 22

Infrastructure that is critically important to evaluating marketing operations abroad includes:

A)transportation, communications and energy.
B)marketing communications, financing, distributing and information.
C)land, road, air and water transportation networks.
D)All of these choices

Question 23

Which of the following statements is false?

A)The World Trade Organization (WTO)is the major, and most comprehensive, trade facilitation entity, and with the accession of Russia on 22 August 2012 it now encompasses all of the world's significant economies.
B)Blocs are joining bigger blocs as in the case of the Asia Pacific Economic Cooperation (APEC), which brings partners together from multiple continents (including NAFTA, ASEAN Free Trade Area and individual countries such as Australia, China, Japan and Russia).
C)The World Trade Organization (WTO)is the major, and most comprehensive, trade facilitation entity, and with the accession of China on 22 August 2012 it now encompasses all of the world's significant economies.
D)Economic integration has been one of the main economic developments affecting world markets since the Second World War.

Question 24

The free trade area is:

A)the least restrictive form of economic integration among nations.
B)not actually possible in Asia.
C)where all barriers to trade among member countries are removed.
D)the least restrictive form of economic integration among nations and where all barriers to trade among member countries are removed.

Question 25

All of the alternatives below are correct, except:

A)Differences in the degree of urbanisation of target markets in less-developed countries influence international marketers' product strategies.
B)If products are targeted only to urban areas, products need minimal adjustments, mainly to qualify them for market entry.
C)When targeting national markets, firms may need to make extensive adaptations to match more closely the expectations and the more narrow consumption experiences of the rural population.
D)All of these choices

Question 26

Which of the following nations had the highest debt in 2010?

A)Bulgaria
B)Brazil
C)China
D)Russian Federation

Question 27

What is the free trade referred to as AFTA:

A)ASEAN Free Trade Area.
B)the American Free Trade Area.
C)the Agreement on Freight, Tariffs, and Access.
D)the Australian Free Trade Agreement.

Question 28

Which of the following statements is correct?

A)The increased urbanisation of many markets has not distinctly changed consumption patterns.
B)Urban areas provide larger groups of consumers who may be less receptive to marketing efforts.
C)The concept of urbanisation has different meanings depending on where one operates.
D)None of the above

Question 29

The international marketer can use which of the following classification as a planning guide?

A)Very low family incomes: subsistence economies tend to be characterised by rural populations in which consumption relies on personal output or barter.Some urban centres may provide markets.
B)Very low, very high family incomes: some countries exhibit strongly bimodal income distributions.The majority of the population may live barely above the subsistence level, but there is a strong market in urban centres and a growing middle class.The affluent are truly affluent and will consume accordingly.
C)Low, medium and high family incomes: industrialisation produces an emerging middle class with increasing disposable income.
D)All of these choices

Question 30

In 2012 _________, _________ and ________ had the three highest GDP per capita in the world.

A)Luxembourg; Australia; Norway
B)Norway; Switzerland; Sweden
C)Norway, Qatar; United Arab Emirates
D)Luxembourg; Qatar; Norway

Question 31

What is the Physical Quality of Life Index (PQLI)?

A)A composite measure of the level of welfare in a country
B)A composite measure of the GDP per capita of a country times the 'world happiness index score
C)A composite measure of the level of life satisfaction of the population of a country
D)None of the above

Question 32

According to the textbook, how many people in the world live on less than US$1500 a year?

A)4 billion
B)4 million
C)75 million
D)1 billion

Question 33

A true economic union:

A)integrates economic policies between members.
B)allows the free movement of goods, services, but not the movement of the factors of production across borders.
C)prevents fixed exchange rates in the common currency.
D)is like the Southern African Customs Union.

Question 34

When assessing a market's potential an international marketer should consider:

A)income, infrastructure, information and internationalisation.
B)population, income, consumption patterns and geography.
C)income, infrastructure and information.
D)consumption patterns, infrastructure and topology.

Question 35

An international marketer should consider which of the following general country variables?

A)Population, infrastructure, geography and foreign involvement in the economy
B)Population, GDP, geography, manufacturing as a percentage of national product, infrastructure and per capita income
C)Population, GNP, geography, production as a percentage of national product, infrastructure and per capita income.
D)Population, GDP, geography, production as a percentage of national product, infrastructure and per capita income.

Question 36

According to the textbook, the newly industrialised countries (NICs)are:

A)Singapore, Malaysia, Thailand, Myanmar, Cambodia and the Philippines.
B)Singapore, Taiwan, Thailand, Korea, Chile and Mexico.
C)Singapore, Taiwan, Korea, Hong Kong, Bengali and Malacca.
D)Singapore, Taiwan, Korea, Hong Kong, Brazil and Mexico.

Question 37

In 2011 all of the following countries were among the top 10 economies in the world, except:

A)Canada
B)Brazil
C)Italy
D)France

Question 38

Debt crises:

A)reduce a nation's buying power.
B)force imports down.
C)force exports up.
D)reduce a nation's buying power, force exports up and force imports down.

Question 39

Inflation is a problem that may cause:

A)a government to invoke price controls.
B)higher profit situation for international marketers due to maximum prices being set.
C)increased investment activity in the region.
D)increases in production as wages are now comparatively cheaper.

Question 40

BRIC is an acronym for:

A)Brazil, Russia, India and China.
B)Burma, Russia, India and China.
C)Britain, Russia, India and China.
D)Brazil, Russia, India and Czech Republic.

Question 41

Purchasing power is a function of:

A)prices, income, fixed commitments and government credit policy.
B)prices, debt levels, income and fixed commitments.
C)income, credit availability, prices and debt levels.
D)income, prices, savings and credit availability.

Question 42

How have Australia and New Zealand benefited from the rapid rise of China and India as economic and market powerhouses over the past 20 years?

Question 43

Which of the following indicators relates to the overall industrialisation of the market and can be used effectively by suppliers of industrial products and services?

A)Steel consumption, cement production and electricity production
B)Steel production, cement consumption and electricity consumption
C)Steel consumption, gold production and electricity production
D)Steel production, gold consumption and electricity consumption

Question 44

Low rates of diffusion should be approached cautiously because they can signal a market opportunity or lack thereof resulting from:

A)low income levels, use of a substitute product or lack of acceptance.
B)high income levels, use of a substitute product or lack of acceptance.
C)low income levels, lack of substitute product or lack of acceptance.
D)high income levels, lack of substitute product or lack of acceptance.

Question 45

A ____________ the highest level of economic integration.

A)common market
B)economic union
C)Free Trade Area
D)customs union

Question 46

As regional economic integration occurs, the international marketer must make integration assessments and decisions from four points of view:

A)Export quotas and tariffs, laws and regulations, size of the market and attractiveness of the market
B)Product differentiation, price advantage, distinctive competency and market compatibility
C)External analysis, internal analysis, strategy, and control and monitoring
D)Outcome of the change, change readiness, strategic response and company reorganisation

Question 47

A country's debt must be considered in terms of:

A)its size.
B)the ability of the country to service the debt, measured by export revenue earnings.
C)GNI of the country.
D)All of these choices

Question 48

What affects the ability of both industrial customers and consumers to buy and also introduces uncertainty into both the marketer's planning process and consumers' buying habits?

A)Higher purchasing power parities
B)Stagnation
C)Deflation
D)Inflation

Question 49

A household:

A)describes all the persons who occupy a housing unit.
B)describes all the related persons who occupy a housing unit.
C)is a variable important to marketers in the European Union because it is increasing in size.
D)describes all the persons who occupy a housing unit and is a variable important to marketers in the European Union because it is increasing in size.

Question 50

Give some examples of how regional differences in China can have an impact on the consumption patterns of the population.

Question 51

Discuss the movement towards regional trading agreements and the advantages and disadvantages of it to international marketers.

Question 52

Forms of economic integration in regional markets include:

A)economic unions and regional trade areas.
B)trading blocs and common markets.
C)economic unions and customs unions.
D)common external trade policies, harmonisation of economic policies and free trade areas.

Question 53

International marketers can respond to a recession in the target market by:

A)temporarily abandoning the target market.
B)increasing marketing efforts.
C)decreasing the capitalisation rate.
D)temporarily abandoning the target market and increasing marketing efforts.

Question 54

Product saturation:

A)means the same as product diffusion.
B)means the percentage of households that own a particular product.
C)means the same as product diffusion and the percentage of households that own a particular product.
D)is the percentage of product production that cannot be sold after all consumers have already bought the product.

Question 55

In which country is an urban area defined as a built-up area with at least 200 inhabitants with no more than 200 metres between houses?

A)Sweden
B)South Africa
C)Singapore
D)Sri Lanka

Question 56

Which is often used as a primary indicator for evaluation of purchasing power?

A)Purchasing power parities
B)Exchange rates
C)Per capita GNP
D)Per capita GDP