Deck 3: Global Trade and Integration

Question 1

Which identifies the complete integration of political and economic policy,and represents the final step before the creation of a new country?

A) Free trade areas
B) Custom union
C) Common market
D) Economic union
E) Political union

Answer 1

E

Question 2

The process of using agreements between countries to lower limits on the movements of products,capital,and/or labor is:

A) Evaluation
B) Capitalization
C) Market implementation
D) Integration
E) Mobilization

Answer 2

D

Question 3

Which involves the use of a third party when entering a foreign country?

A) Importing
B) Downsizing
C) Offshoring
D) Dumping
E) Market differentiation

Answer 3

C

Question 4

In which system will economic policies be harmonized among members and countries seek to follow the same economic policy?

A) Free trade areas
B) Custom union
C) Common market
D) Economic union
E) Political union

Question 5

Which form of government is led by a single ruler who inherits power?

A) Democracy
B) Adhocracy
C) Monarchy
D) Theocracy
E) Representative government

Question 6

Trade leads to higher levels of innovation through:

A) Reduced costs
B) Increased efficiencies
C) Market development
D) Specialization
E) Division of labor

Question 7

The concept that all members of the World Trade Organization must be treated equally is:

A) Statement of rights
B) Statement of regulations
C) Most-favored-nation status
D) Full partnership status
E) Most fully accepted status

Question 8

Specially designated areas within a country that have separate laws designed to encourage trade are:

A) Zones of indifference
B) Zones of marketability
C) Free trade areas
D) Restricted trade zones
E) Open trade zones

Question 9

The theory of absolute advantage was proposed by:

A) Adam Bracker
B) Adam Wesley
C) Adam Wiley
D) Adam Smith
E) Adam Riley

Question 10

Which preceded the World Trade Organization?

A) General Agreement on Tariffs and Trade
B) North American Free Trade Association
C) The Vietnam War
D) The Association of Free Market Countries
E) The Alliance for Open Markets

Question 11

Which of the following occurs when goods enter into a country?

A) Exporting
B) Importing
C) Absolute advantage
D) Comparative advantage
E) Market liberalization

Question 12

Which vests political power in the citizens of a country,either directly or through elected representatives?

A) Democracy
B) Adhocracy
C) Monarchy
D) Dictatorship
E) Monopoly

Question 13

Which remove barriers to the movement of goods and services and members consent to a uniform tariff policy toward nonmember countries?

A) Free trade areas
B) Custom union
C) Common market
D) Economic union
E) Political union

Question 14

Which theory helps to explain why many nations trade with less-developed or least-developed countries that do not hold advantages in any type of production?

A) Absolute advantage
B) Comparative advantage
C) Opportunity cost
D) Human capital
E) Economic equilibrium

Question 15

Which of the following occurs when goods are transferred or shipped to a foreign country?

A) Exporting
B) Importing
C) Absolute advantage
D) Comparative advantage
E) Market liberalization

Question 16

WTO stands for:

A) World Trade Optimization
B) World Traffic Center
C) Women's Treaty Organization
D) World Trade Organization
E) Worker Trade Optimization

Question 17

All of the following are presented in the textbook as benefits of free trade except:

A) Free trade restrains the power of the state and empowers individuals
B) Free trade brings people together across distance and cultures leading to peace
C) Free trade makes everyone wealthier
D) Free trade creates additional poverty
E) Free trade encourages basic human rights

Question 18

Which form of government is guided by religious ideals?

A) Democracy
B) Communism
C) Monarchy
D) Theocracy
E) Religiosity

Question 19

Which of the following is a key component of the theory of comparative advantage?

A) Market equilibrium
B) Human capital
C) Ancillary costs
D) Opportunity costs
E) Market price

Question 20

The European Economic Community was renamed to which of the following in 1993?

A) European Council
B) European Collective
C) European Free Market
D) European Union
E) Council of European Economies

Question 21

The official currency of the European Union is the:

A) franc
B) pound
C) euro
D) dollar
E) gold standard

Question 22

Which trade agreement includes the United States,Mexico,and Canada?

A) North and South America Trade Alliance
B) American Union
C) CANMEXUS
D) North American Free Trade Agreement
E) Alliance of North American Enterprise

Question 23

A tax on an import is a:

A) Trade barrier
B) Countertrade facilitator
C) Tariff
D) Excise tax
E) Import control

Question 24

Which trade agreement currently encompasses all seventeen members of the Arab League?

A) Greater Arab Free Trade Area (GFTA)
B) Great Arab Trade Association (GATA)
C) Arab Economic Cooperative (AEC)
D) Arab Free Trade Zone (AFTZ)
E) Arab Trade Cooperative Association (ATCA)

Question 25

The Andean Community and Andean Pact apply to:

A) Southern regions of North America
B) South America
C) Southeast Asia and the Pacific Rim
D) Southern Europe
E) Africa

Question 26

The Foreign Corrupt Practices Act outlaws:

A) Investments of more than 50% in any country
B) Giving symbolic gifts to trading partners
C) Attempts to increase trade
D) Attempts to increase protectionism
E) Bribery

Question 27

An effort aimed at preventing goods from being imported into a country or being exported to a country is known as:

A) Tariff
B) Export-Import tax
C) Embargo
D) Collusion
E) Trade restriction

Question 28

The desire to protect domestic businesses from the exports of foreign firms through governmental policy is:

A) Protectionism
B) Dumping
C) Market stabilization
D) Market liberalization
E) Border fixing

Question 29

The application of laws outside of country borders is:

A) Extraterritoriality
B) Intraterritoriality
C) Extradition
D) Antitrust applications
E) Exceptionalism of the legal system

Question 30

Which of the following pairs of countries were founding members of CARIFTA?

A) England and the United States
B) Japan and China
C) Panama and Mexico
D) Argentina and Chile
E) Antigua and Barbados

Question 31

The Sherman Act and the Clayton Act are:

A) Protectionist laws
B) Free trade laws
C) Laws that outlaw bribery
D) Laws that limit foreign investments in U.S. companies
E) Antitrust laws

Question 32

A payment designed to support a domestic business is a(n):

A) Tariff
B) Tax break
C) Subsidy
D) Export tax
E) Import tax

Question 33

When protectionism keeps military weapons from being exported,the primary objective is:

A) Fair trade
B) National independence
C) Patriotism
D) National security
E) Maintain the balance of power

Question 34

Government policies limiting trade do not include:

A) Tariffs
B) Embargoes
C) Quotas
D) Subsidies
E) None of the above

Question 35

Protectionism is:

A) A form of free trade in which a country maintains it sovereignty
B) A method of developing advantageous trade relationships with other countries
C) The use of currency exchange to maintain trading advantages
D) Protecting domestic businesses from exports by foreign firms through governmental policy
E) Protecting free trade by creating treaties

Question 36

Arguments for protectionism do not include:

A) Protect local industry
B) Respond to local pressure
C) National security
D) Revenue
E) Creating economic well-being citizens of other countries

Question 37

The Southern Cone Common Market,or MERCOSUR,consists of countries in:

A) Southern regions of North America
B) South America
C) Southeast Asia and the Pacific Rim
D) Southern Europe
E) Africa

Question 38

Which would prevent Iran from importing of goods from the United States?

A) Tariff
B) Trade agreement
C) Embargo
D) Excise tax
E) Countertrade

Question 39

Which system will be least inviting to exporters?

A) Communism
B) Socialism
C) Anarchy
D) Monarchy
E) Dictatorship

Question 40

The Trans-Pacific Strategic Economic Partnership Agreement applies to countries in Asia and:

A) Europe
B) Africa
C) Canada
D) South America
E) The United States

Question 41

If the United States and Canada were able to completely integrate political and economic policies between the two countries,the result would be a(n):

A) Political union
B) Economic union
C) Common market
D) Trade zone
E) Custom union

Question 42

If Angola,Namibia,and South Africa formed a union in which economic policy is harmonized,the result would be a(n):

A) Political union
B) Economic union
C) Custom union
D) Common market
E) Free trade union

Question 43

A key component of the theory of comparative advantage is opportunity costs.

Question 44

Comparative advantage theory argues against country specialization.

Question 45

If Libya,Egypt,Algeria,and Sudan agreed to remove barriers to the movement of goods and services and consent to a uniform tariff policy toward nonmember countries,the result would be a(n):

A) Custom union
B) Political union
C) Economic union
D) Common market
E) None of the above

Question 46

Which occurs when there is an absence of any ruling governmental form?

A) Communism
B) Socialism
C) Anarchism
D) Monarchy
E) Dictatorship

Question 47

GATT stands for:

A) General Agreement on Tariffs and Trade
B) General Agreement on Tariffs and Taxes
C) Governmental Agreement on Tariffs and Trade
D) Governmental Agreement on Tariffs and Taxes
E) Governmental Allocation of Tariffs and Trade

Question 48

Governmental forms influence choices made with regard to the allocation of resources.

Question 49

If Laos,Cambodia,Vietnam,and Thailand harmonized economic policies with one another,the result would be a(n):

A) Political union
B) Economic union
C) Custom union
D) Common market
E) Free trade union

Question 50

Which three countries make up NAFTA?

A) United States, Canada, and Brazil
B) United States, Canada, and Mexico
C) United States, Mexico, and Brazil
D) United States, Mexico, and Panama
E) United States, Mexico, and Cuba

Question 51

Free trade zones are specially designated areas within a country that have separate laws designed to encourage trade.

Question 52

Monarchies are common in the modern world.

Question 53

Free trade occurs when goods travel across boundaries with little governmental interference.

Question 54

Organizations such as the Export-Import Bank discourage free trade.

Question 55

Absolute advantage theory draws attention to the advantages countries hold in terms of certain activities.

Question 56

________ are made up of a group of countries that have entered into an agreement to reduce tariffs,quotas,and other barriers to the movement of goods and services:

A) Free trade areas
B) Economic cooperative zones
C) Free cooperative zones
D) Trade free agreements
E) Trade free zones

Question 57

A monarchy form of government means a dictator leads all national activities.

Question 58

Free trade increases the power of the state and lessens employee empowerment.

Question 59

If Afghanistan,Pakistan,and India moved beyond a custom union by removing barriers to trade within the market and by maintaining a common tariff for nonmembers,the result would be a(n):

A) Political union
B) Economic union
C) Common market
D) Free trade area
E) Free trade zone

Question 60

What is the name of the administrative function that oversees NAFTA trade disputes and grievances?

A) NAFTA Deputy
B) NAFTA Office
C) NAFTA Secretariat
D) NAFTA Oversight Board
E) NAFTA Dispute Attorney

Question 61

Due to its political instability,there are very few regional unions in Africa.

Question 62

The World Trade Organization replaced the GATT treaty.

Question 63

Limitations on currency convertibility can be instituted as an attempt to limit imports from foreign countries.

Question 64

Government leaders can limit imports by requiring potential importers to purchase an import license.

Question 65

The application of laws outside of country borders is known as extraterritoriality.

Question 66

Sustainability is a major concern relating to international trade due to the differences in environmental regulations that exist throughout the world.

Question 67

The Treaty of Rome led to the establishment of the European Economic Community.

Question 68

NAFTA is a custom union.

Question 69

Outsourcing refers to the relinquishing of organizational control of a business process to a third-party external entity.

Question 70

The U.S.government has no formal anti-boycott law because boycott regulations are instituted at the local level.

Question 71

Offshoring refers to the movement of business activity to another country.

Question 72

Protectionism refers to the desire to protect domestic businesses from the exports of foreign firms through governmental policy.

Question 73

The origins of the European Union revolved around automobile and aircraft trade.

Question 74

The Treaty of Asuncion led to the development of the Southern Cone Common Market.

Question 75

Trade barriers are rarely influenced by local politics because most pressure for protectionism originates at the national level.

Question 76

Saudi Arabia is a member of the Greater Arab Free Trade Area (GFTA).

Question 77

The European Union is a type of political union.

Question 78

A common market represents a type of trade integration.

Question 79

Some governments offer subsidies as an effort to assist domestic businesses from the threat of imports from foreign countries.

Question 80

The World Trade Organization calls for equal treatment of local and foreign goods among countries with most-favored-nation status.