Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
d. monarchy
e. dictatorship
41. Which occurs when there is an absence of any ruling governmental form?
a. communism
b. socialism
c. anarchism
d. monarchy
e. dictatorship
42. ______ 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
43. 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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
44. 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 non-members, the result would
be a(n) ______.
a. political union
b. economic union
c. common market
d. free trade area
e. free trade zone
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 non-member countries, the result would be
a(n) ______.
a. custom union
b. political union
c. economic union
d. common market
e. none of the above
46. 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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
e. free trade union
47. 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
48. 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
49. 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
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
50. 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
51. Free trade occurs when goods travel across boundaries with little governmental interference.
a. True
b. False
52. Absolute advantage theory draws attention to the advantages countries hold in terms of
certain activities.
a. True
b. False
53. A key component of the theory of comparative advantage is opportunity costs.
a. True
b. False
54. Comparative advantage theory argues against country specialization.
a. True
b. False
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
55. Monarchies are common in the modern world.
a. True
b. False
56. A monarchy form of government means a dictator leads all national activities.
a. True
b. False
57. Governmental forms influence choices made with regard to the allocation of resources.
a. True
b. False
58. Free trade increases the power of the state and lessens employee empowerment.
a. True
b. False
59. Free trade zones are specially designated areas within a country that have separate laws
designed to encourage trade.
a. True
b. False
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
60. Organizations such as the Export-Import Bank discourage free trade.
a. True
b. False
61. A common market represents a type of trade integration.
a. True
b. False
62. NAFTA is a custom union.
a. True
b. False
63. The European Union is a type of political union.
a. True
b. False
64. The origins of the European Union revolved around automobile and aircraft trade.
a. True
b. False
65. Offshoring refers to the movement of business activity to another country.
a. True
b. False
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
66. Outsourcing refers to the relinquishing of organizational control of a business process to a
third-party external entity.
a. True
b. False
67. The World Trade Organization replaced the GATT treaty.
a. True
b. False
68. The World Trade Organization calls for equal treatment of local and foreign goods among
countries with most-favored-nation status.
a. True
b. False
69. The Treaty of Rome led to the establishment of the European Economic Community.
a. True
b. False
70. The Treaty of Asuncion led to the development of the Southern Cone Common Market.
a. True
b. False
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
71. Saudi Arabia is a member of the Greater Arab Free Trade Area (GFTA).
a. True
b. False
72. Due to its political instability, there are very few regional unions in Africa.
a. True
b. False
73. Protectionism refers to the desire to protect domestic businesses from the exports of foreign
firms through governmental policy.
a. True
b. False
74. Some governments offer subsidies as an effort to assist domestic businesses from the threat
of imports from foreign countries.
a. True
b. False
75. Government leaders can limit imports by requiring potential importers to purchase an import
license.
a. True
b. False
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
76. Limitations on currency convertibility can be instituted as an attempt to limit imports from
foreign countries.
a. True
b. False
77. Trade barriers are rarely influenced by local politics because most pressure for protectionism
originates at the national level.
a. True
b. False
78. Sustainability is a major concern relating to international trade due to the differences in
environmental regulations that exist throughout the world.
a. True
b. False
79. The U.S. government has no formal anti-boycott law because boycott regulations are
instituted at the local level.
a. True
b. False
80. The application of laws outside of country borders is known as extraterritoriality.
a. True
b. False
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
81. Economic espionage is a growing concern in international trade.
a. True
b. False
82. Compare and contrast the theories of Absolute Advantage and Comparative Advantage.
What are the differences? What are the similarities?
83. Discuss the various types of governmental forms that pertain to international trade. What are
the main characteristics of each form?
84. Discuss the many benefits of free trade that have been discussed in the textbook. Do you
agree with the list of benefits? Why or why not? Which of the benefits do you feel is most
important? Why?
85. Describe the various levels of integration that apply to international trade. What are the
characteristics of each level?
86. Discuss the function of the World Trade Organization and how it supports international trade.
87. Detail the history of the development of the European Union as discussed in the textbook.
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
88. Describe NAFTA and its role in promoting trade throughout North America.
89. Discuss the various Asian trade-related agreements that have been described in the textbook.
90. Describe the various governmental policies that can be used to limit free trade between
countries.
91. Discuss the arguments for protectionism. Do you agree with each of them? Why or why not?
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019