50) What is a characteristic impact of privatization of state-owned enterprises?
A) It normally has a negative effect on economic growth.
B) It blocks investment of capital in strategic areas.
C) It often leads to new economic growth.
D) It results in a draining of the future national resources.
E) It brings about a political shift in the country.
51) During the early market growth of many countries, the first large open market was
A) Russia.
B) the United States.
C) Australia.
D) Germany.
E) the United Kingdom.
52) A country’s investment in information technology is a key to economic growth. Specifically,
the Internet
A) further increases the advantage of rich economies over the poor ones.
B) increases market transaction costs.
C) allows for innovative services but at a relatively higher cost.
D) enables smaller firms in emerging economies to sell into a global market.
E) decreases the economies of scale from vertical integration.
53) What is true about the activities of foreign investors in developing countries?
A) Foreign investors are seen as vital partners in economic development.
B) Today, most developing countries have more conservative attitudes toward foreign
investments than before.
C) Foreign firms are expropriated and charged with excessively high tariffs and quotas by all
developing countries.
D) Foreign businesses are generally not allowed to raise money by means of shares in
developing countries.
E) Foreign investment is banned in most developing countries.
54) What is an indicator of a country’s economic development?
A) population expansion
B) expanding state ownership
C) the country’s infrastructure
D) social reformation
E) cultural diversity
55) Paved roads, railroads, seaports, communication networks, and financial networks are
examples of
A) environmental resources.
B) inventory.
C) infrastructure.
D) factors of production.
E) freight claims.
56) Economic planners are often more ________ oriented than marketing oriented.
A) production
B) advertising
C) logistics
D) theory
E) distribution
57) Economic planners are least likely to be concerned with the problems related to
A) production.
B) finance.
C) capacity.
D) distribution.
E) investment.
58) ________ is an economy’s arbitrator between productive capacity and consumer demand.
A) Warehousing
B) Marketing
C) Convergence
D) Procurement
E) Outsourcing
59) The level of market development roughly parallels the stages of economic
A) stagnation.
B) duress.
C) repression.
D) equilibrium.
E) development.
60) Estimating market potential in less-developed countries involves additional challenges, but
most of the difficulty arises from the
A) coexistence of three distinct kinds of markets in each country.
B) dependence of the markets on the industrialized sectors.
C) lower wage rates of the workforce.
D) high fluctuation in the currency rate.
E) higher concentration of population residing in the urban areas.
61) The transitional sector differs from the modern urban sector in that the transitional sector
A) is an exclusively agriculture-oriented sector.
B) consists of population that works in the countryside.
C) consists of an expanding Westernized middle class.
D) represents the high-income urban slums.
E) consists of population that moves from the country to the large cities.
62) Which market sector has an expanding Westernized middle class?
A) the traditional sector
B) the modern sector
C) the rural services sector
D) the transitional sector
E) the agricultural sector
63) Developing countries with markets that are geographically large, have strong growth rates,
are regional economic drivers, and represent sizable markets for a wide range of products have
been identified by the U.S. Department of Commerce as ________ markets.
A) frontier
B) big emerging
C) two-sided
D) niche
E) grey
64) Country A is a developing country that has a significant population and represents a sizable
market for a wide range of products. It has a strong growth rate and is considered a regional
economic driver. Based on this information, Country A can be classified as a ________ market.
A) grey
B) big emerging
C) two-sided
D) frontier
E) niche
65) Which country has been identified by the Department of Commerce as a BEM (big emerging
market)?
A) Philippines
B) Egypt
C) Venezuela
D) Mexico
E) Nicaragua
66) The type of growth that is happening in BEMs today is analogous to what happened in
A) Saudi Arabia in the 1800s.
B) India during the rule of the British Empire.
C) Russia after the fall of the Czar.
D) Europe after World War II.
E) Iraq between 1890 and 1990.
67) Which country is a part of the free trade area known as CFTA?
A) France
B) Uruguay
C) the United States
D) Argentina
E) Brazil
68) The three members of the North American Free Trade Agreement (NAFTA) are
A) the United States, the United Kingdom, and France.
B) the United States, Cuba, and Uruguay.
C) Canada, China, and Japan.
D) the United States, France, and Germany.
E) Canada, Mexico, and the United States.
69) The CFTA was designed to
A) establish tariffs between the U.S. and Europe.
B) create several independent commercial markets for goods and services.
C) become a customs union like the European Community.
D) involve both economic and political unions.
E) eliminate tariffs and other trade barriers between the United States and Canada.
70) Which country announced that it would seek free trade with the United States shortly after
the ratification of the United States–Canada Free Trade Area (CFTA)?
A) Germany
B) Australia
C) Mexico
D) The United Kingdom
E) China
71) ________ required the United States, Canada, and Mexico to remove all tariffs and trade
barriers over 15 years, and beginning in 2008, all tariff barriers were officially dropped.
A) Mercosur
B) LAIA
C) CARICOM
D) NAFTA
E) DR-CFTA
72) What key provision of NAFTA restricts Japan from assembling autos in Mexico and
avoiding U.S. or Canadian tariffs and quotas, unless the auto had a specific percentage of
Mexican (i.e., North American) content?
A) services
B) standards
C) rules of origin
D) uniform customs procedures
E) government procurement
73) What is true about NAFTA?
A) It allows the use of standards and technical regulations as obstacles to trade.
B) It was ratified and became effective in the year 2000.
C) It prohibits U.S. and Canadian financial institutions to open wholly owned subsidiaries in
Mexico.
D) Its provisions require goods to contain minimum of 10% North American content to be traded
duty free.
E) Its provisions require Canada, Mexico, and the United States to implement uniform customs
procedures and regulations.
74) NAFTA differs from Mercosur in that NAFTA
A) was provided legal basis by the Treaty of Asunción.
B) is the second-largest common-market agreement in the Americas after Mercosur.
C) includes Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay.
D) aims to address and improve all aspects of doing business within North America.
E) aims to establish a common currency for its Latin American members.
75) Given the fact that NAFTA is now effective in the U.S., Mexico, and Canada, an American
company that has its production plant in Sri Lanka will be willing to relocate its production plant
to Mexico mostly because
A) it will improve the image of its goods.
B) Mexico has lower wages than Sri Lanka.
C) it will enable the company to get an entirely western consumer base for its products.
D) moving finished goods from Mexico to the United States is cheaper and faster than moving
them from Sri Lanka.
E) workers in Mexico are more skilled than those in Sri Lanka.