Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
Test Bank
Chapter 3: Global Trade and Integration
1. 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
2. Which of the following occurs when goods enter into a country?
a. exporting
b. importing
c. absolute advantage
d. comparative advantage
e. market liberalization
3. The theory of absolute advantage was proposed by ______.
a. Adam Bracker
b. Adam Wesley
c. Adam Wiley
d. Adam Smith
e. Adam Riley
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
4. Trade leads to higher levels of innovation through ______.
a. reduced costs
b. increased efficiencies
c. market development
d. specialization
e. division of labor
5. 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
6. 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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
7. 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
8. Which form of government is led by a single ruler who inherits power?
a. democracy
b. adhocracy
c. monarchy
d. theocracy
e. representative government
9. Which form of government is guided by religious ideals?
a. democracy
b. communism
c. monarchy
d. theocracy
e. religiosity
10. 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.
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
c. Free trade makes everyone wealthier.
d. Free trade creates additional poverty.
e. Free trade encourages basic human rights.
11. 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
12. 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
13. Which remove barriers to the movement of goods and services and members consent to a
uniform tariff policy toward non-member countries?
a. free trade areas
b. custom union
c. common market
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
d. economic union
e. political union
14. 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
15. 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
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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
17. Which involves the use of a third party when entering a foreign country?
a. importing
b. downsizing
c. offshoring
d. dumping
e. market differentiation
18. 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
19. 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-favoured-nation status
d. full partnership status
e. most fully accepted status
20. The European Economic Community was renamed to which of the following in 1993?
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
a. European Council
b. European Collective
c. European Free Market
d. European Union
e. Council of European Economies
21. 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
22. The official currency of the European Union is the ______.
a. franc
b. pound
c. euro
d. dollar
e. gold standard
23. 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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
e. Alliance of North American Enterprise
24. 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
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
26. 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)
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
27. 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
28. 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
29. 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
30. Which would prevent Iran from importing of goods from the United States?
a. tariff
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
b. trade agreement
c. embargo
d. excise tax
e. countertrade
31. A tax on an import is a ______.
a. trade barrier
b. countertrade facilitator
c. tariff
d. excise tax
e. import control
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
33. 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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
e. trade restriction
34. Government policies limiting trade do not include ______.
a. tariffs
b. embargoes
c. quotas
d. subsidies
e. none of the above
35. Arguments for protectionism do not include ______.
a. protection local industry
b. response to local pressure
c. national security
d. revenue
e. creating economic well-being citizens of other countries
36. 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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
37. 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
38. 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
39. The application of laws outside of country borders is ______.
a. extraterritoriality
b. intraterritoriality
c. extradition
d. antitrust applications
e. exceptionalism of the legal system
40. Which system will be least inviting to exporters?
a. communism
b. socialism
c. anarchy