International Marketing, 18e (Cateora)
Chapter 9 Economic Development and the Americas
1) Of the three kinds of distances that international marketers must traverse, time zones have the
greatest influence on the success of their commercial efforts abroad.
2) The liberalization of trade and investment policies in developing countries have little impact
on the way countries will trade and prosper in the 21st century.
3) 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.
4) Consumption patterns change rapidly in static economies.
5) Economic development translates to rapid economic growth and increases in consumer
demand.
6) According to the UN classification, industrially developing countries just entering world trade
with relatively low per capita incomes are referred to as less-developed countries.
7) The UN classification of countries based on economic development has been criticized
because it no longer seems relevant in the rapidly industrializing world.
8) Chile is a newly industrialized country. As such, it has per capita incomes lower than LDCs.
9) Under 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).
10) Newly industrialized countries (NICs) are characterized by markets with fewer restrictive
trade practices and significant free market reforms.
11) Mercosur is a free trade group formed by the United States.
12) Privatization of state-owned industries released immediate capital to invest in strategic areas.
13) High transaction costs associated with the use of the Internet prevent smaller firms in
emerging countries from selling into a global market.
14) Economic growth is measured solely in economic goals.
15) The trend toward privatization is occurring in industrialized as well as in developing
countries.
16) The quality of an infrastructure directly affects a country’s economic growth potential.
17) A more developed economy tends to have fewer types of marketing functions that are
needed.
18) Marketing is an economy’s arbitrator between productive capacity and growth potential.
19) According to Jagdish Sheth, rather than diffusion of innovations, the focus of new product
development should be on affordability and accessibility.
20) For international marketing, the level of market development parallels the stages of
economic development.
21) In the United States, the vast majority of the population lives in urban areas and has higher
earnings than those who live in rural areas.
22) Big emerging markets are of major political importance within their regions.
23) Poland has been identified as a big emerging market by the Department of Commerce.
24) Canada is a member of NAFTA.
25) The United States–Canada Free Trade Area (CFTA) was a customs union like the European
Community.
26) The DR-CAFTA includes a wide array of tariff reductions aimed at increasing trade and
employment.
27) Mercosur is the largest common-market agreement in the Americas.
28) The Mercosur originally envisioned central institutions similar to those of the European
Union institutions.
29) One of the most important aspects of the Latin American Integration Association (LAIA)
that differs from LAFTA, its predecessor, is the differential treatment of member countries
according to their level of economic development.
30) As a country develops, market behavior changes and eventually it leads to market
segmentation.
31) Which country is an MDC (more-developed country)?
A) Brazil
B) Russia
C) Germany
D) Argentina
E) Vietnam
32) According to the U.S. Department of Commerce, Latin American and other emerging
markets will account for ________ of the world’s total growth in the next two decades and
beyond.
A) 20%
B) 30%
C) 50%
D) 75%
E) 90%
33) What is considered 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
34) 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.
35) Economic ________ refers to an increase in national production that is reflected by an
increase in the average per capita gross domestic product or gross national income.
A) repression
B) duress
C) equilibrium
D) development
E) sustainability
36) The ________ classifies a country’s stage of economic development on the basis of its level
of industrialization into three categories and the three categories are MDCs, LDCs, and LLDCs.
A) U.S. Department of Commerce
B) North Atlantic Treaty Organization
C) International Organization for Standardization
D) United Nations
E) International Development Association
37) According to the United Nations’ stages of economic development for classifying countries
based on levels of industrialization, in which category does an industrialized country with high
per capita income fall?
A) less-developed countries
B) least-developed countries
C) more-developed countries
D) frontier markets
E) pre-emerging markets
38) Which statement is true about MDCs (more-developed countries)?
A) These countries are just entering world trade.
B) The 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.
39) According to the United Nations’ stages of economic development for classifying countries
based on levels of industrialization, Canada falls under the category of ________ countries.
A) Third World
B) least-developed
C) more-developed
D) less-developed
E) pre-emerging
40) According to the United Nations’ stages of economic development for classifying countries
based on levels of industrialization, ________ countries consist of industrially developing
countries just entering world trade with relatively low per capita incomes.
A) first world
B) least-developed
C) less-developed
D) Third World
E) more-developed
41) A country that is industrially underdeveloped, agrarian, has a 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.
42) The United Nations’ classification of stages of economic development has been criticized
primarily because
A) many countries that are classified as LDCs are industrializing at a very rapid rate, while
others are advancing at more traditional rates of economic development.
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.
43) 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.
44) 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.
45) 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
46) Which country was involved in the formation of the free trade group Mercosur?
A) Australia
B) China
C) Argentina
D) Russia
E) Thailand
47) _________ is a free trade group that includes 200 million people, and was formed by
Argentina, Brazil, Paraguay, and Uruguay.
A) NAFTA
B) Caricom
C) Mercosur
D) SACU
E) DR-CAFTA
48) 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) increase in modernization by new investors.
D) instant change in political leadership.
E) continuing drain on future natural resources.
49) What 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 setback to the process of modernization.