Question 1

In periods of inflation, the purchasing power of money increases.

Accepted Answer

During inflation, the general level of prices for goods and services rises, which means that each unit of currency buys fewer goods and services, thereby decreasing the purchasing power of money.

Question 2

The Federal Commerce Commission (FCC)serves as the consumer protection agency for the United States.

Accepted Answer

The Federal Trade Commission (FTC) serves as the consumer protection agency for the United States, not the Federal Communications Commission (FCC). The FCC regulates interstate and international communications by radio, television, wire, satellite, and cable.

Question 3

A country's income distribution provides the most reliable picture of its purchasing power.

Accepted Answer

A country's income distribution provides a good indication of the purchasing power of its citizens, as it shows how income is distributed among different income groups.

Question 4

A long-time leader in the beverage industry, Pepsi saw soft-drink sales decline when competitors began selling juices, teas, and energy drinks. This is an example of indirect competition.

Accepted Answer

Indirect competition occurs when businesses offer different products or services, but compete for the same market share or customer base. In this case, Pepsi faced indirect competition from companies selling juices, teas, and energy drinks, which are alternatives to soft drinks.

Question 5

A recession occurs when inflation rises for two or more consecutive quarters.

Accepted Answer

A recession is typically defined as a decline in gross domestic product (GDP) for two or more consecutive quarters, not a rise in inflation.

Question 6

Environmental scanning involves monitoring developments within a firm's control to evaluate the firm's strengths and weaknesses.

Accepted Answer

Environmental scanning involves monitoring the external environment to identify opportunities and threats, not evaluating a firm's internal strengths and weaknesses.

Question 7

One of the biggest sociocultural changes in the United States over the past half century has been the shift from a nation of primarily one-income families to one in which two-income families and single-parent households predominate.

Accepted Answer

This shift reflects changes in the labor market, gender roles, and family structures, with more women entering the workforce and an increase in single-parent households, altering the traditional one-income family model.

Question 8

A recession and contraction of the economy tends to reduce consumer confidence.

Accepted Answer

During a recession or economic contraction, uncertainty about the future, job security, and income prospects typically leads to a decrease in consumer confidence, as individuals are more likely to save rather than spend due to fears of economic hardship.

Question 9

Direct competition is also known as primary competition.

Accepted Answer

The answer of Direct competition is also known as primary...

Question 10

Created in 1945, the WTO is governed by and accountable to the 188 countries that make up its near-global membership.

Accepted Answer

The World Trade Organization (WTO) was actually established on January 1, 1995, not in 1945. The organization that preceded it was the General Agreement on Tariffs and Trade (GATT), created in 1947.

Question 11

In 2018, the United States, Canada, and Mexico reached a deal to replace its current trade agreement.

Accepted Answer

In 2018, the United States, Canada, and Mexico reached an agreement to replace the North American Free Trade Agreement (NAFTA) with the United States-Mexico-Canada Agreement (USMCA).

Question 12

Direct competition occurs when a product provides alternate solutions to the same market.

Accepted Answer

Direct competition occurs when products or services are similar and compete for the same customer base, not when they provide alternate solutions.

Question 13

Rapidly retiring Baby Boomers make up only a quarter of the U.S. population, but account for 50 percent of all domestic consumer spending.

Accepted Answer

Baby Boomers, despite being a smaller portion of the population, have significant purchasing power and account for a disproportionate amount of consumer spending in the U.S., largely due to their accumulated wealth and spending habits.

Question 14

The Democratic Republic of Congo in Africa joined CAFTA in 2004, renaming the trade agreement DR-CAFTA.

Accepted Answer

The Dominican Republic, not the Democratic Republic of Congo, joined CAFTA in 2004, leading to the renaming of the agreement as DR-CAFTA (Dominican Republic-Central America Free Trade Agreement).

Question 15

Compared with other generational groups, Baby Boomers have the greatest familiarity with and most use for digital communication, social media, and other forms of technology.

Accepted Answer

Baby Boomers, born between 1946 and 1964, generally have less familiarity with and use for digital communication, social media, and other forms of technology compared to younger generations like Millennials and Generation Z, who grew up during the digital age.

Question 16

Economic factors influence almost every marketing decision a firm makes.

Accepted Answer

Economic factors such as inflation, unemployment rates, and consumer spending power significantly impact market demand, pricing strategies, and overall marketing plans.

Question 17

The six major external factors that can influence the marketing environment of a firm are: economic factors, demographic factors, technological factors, political factors, legal factors, and sociocultural factors.

Accepted Answer

These six factors encompass the broad range of external influences that can impact a firm's marketing strategies and overall business environment, affecting consumer behavior, product demand, and operational efficiency.

Question 18

The World Trade Organization was officially formed in 1995 under the Marrakech Agreement.

Accepted Answer

The World Trade Organization (WTO) was officially established on January 1, 1995, as a result of the Marrakech Agreement, concluding the Uruguay Round of trade negotiations.

Question 19

Currency fluctuations can provide marketing opportunities whether a currency is appreciating or depreciating.

Accepted Answer

Currency fluctuations can affect the cost competitiveness of products in international markets. When a currency appreciates, products become more expensive abroad, potentially reducing exports but making imports cheaper and possibly improving the domestic market's product range. Conversely, when a currency depreciates, exports become cheaper and more competitive abroad, potentially increasing foreign sales, while imports become more expensive, which might encourage domestic consumption of local products. Both scenarios can offer strategic opportunities for marketers to adjust pricing, sourcing, and market focus.

Question 20

Projections indicate that by 2050 the Hispanic population in the United States will almost double to more than 127 million.

Accepted Answer

According to projections by the U.S. Census Bureau, the Hispanic population in the United States is expected to significantly increase, reaching numbers that could indeed approach or exceed 127 million by the year 2050, reflecting a substantial demographic shift.

Quiz 3: The Global Environment