49) The ________ is a preferential trade agreement that was organized in 1967 and comprises Brunei,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
A) APEC
B) OAU
C) ASEAN
D) CAFTA
50) Which of the following is the primary focus of the African Union (AU)?
A) FDI influx
B) democracy
C) economic integration
D) intrazonal trade relations
51) An NGO is ________.
A) an agency of the United Nations
B) a private institution independent of a government
C) any organization working on environmental issues
D) an organization that is concerned only with workers’ rights
52) Which of the following is most likely a true statement about the relationship between the United
Nations and NGOs?
A) The UN must license an NGO for it to be involved in any international relief efforts.
B) A UN committee discusses issues of importance to NGOs but does not regulate their activities.
C) The UN determines which NGOs can work on international humanitarian issues and relief efforts.
D) NGOs typically operate in only one country, whereas UN agencies can operate anywhere in the
world.
53) Many NGOs, including Africa Now, Quaker Peace and Social Witness, and Save the Children, are
members of the ________.
A) Ethical Trading Initiative
B) International Red Cross Council
C) United Nations Global Compact
D) United Nations Economic and Social Council
54) Commodity agreements ________.
A) were initially established to attempt to stabilize commodity prices
B) are effective in regulating the price of grains but not minerals
C) are effective in regulating the prices of both grains and minerals
D) were disbanded by the United Nations for being non-competitive
55) The role of most commodity agreements now is to ________.
A) discuss issues and disseminate information about commodities
B) keep consumer countries from controlling commodity prices
C) allow producer countries to control inflation by keeping commodity prices low
D) stabilize prices through regional alliances between producer and consumer countries
56) An example of an effective commodity agreement is ________.
A) the Organization of Petroleum Exporting Countries
B) the Organization of Petroleum Importing Countries
C) the International Tin Alliance
D) the International Cotton Alliance
57) The Organization of Petroleum Exporting Countries ________.
A) uses import tariffs to control oil prices
B) stabilizes prices based on demand
C) uses quotas to control oil prices
D) produces all of the world’s oil
58) Which of the following primarily triggered Toyota’s investment in the European Union?
A) Europeans demanded affordable, high quality cars from Japan.
B) A common currency gave Europeans more buying power.
C) The EU lowered trade barriers on foreign auto imports.
D) Japan and the EU formed a free trade agreement.
59) Which of the following is Walmart’s competitive advantage in Mexico?
A) Walmart purchased all Mexican retail chains and eliminated competitors.
B) Walmart is able to transfer its “everyday low prices” concept to Mexico.
C) Walmart offers affordable, unique products for niche markets in Mexico.
D) Customers prefer to buy from American companies instead of Mexican companies.
60) What was the primary purpose of the formation of Sinergia?
A) charge tariffs on Walmart imports
B) purchase Walmart’s major suppliers
C) better compete with Walmart on price
D) include Walmart in the regional supply chain
61) Regional integration is better known as global integration through the World Trade Organization.
62) The European Union is an example of regional integration.
63) As companies expand internationally, they must change their organizational structure and operating
strategies to take advantage of regional trading groups.
64) Most MNEs generate a majority of their revenues in their home regions.
65) GATT’s contribution to trade liberalization made possible the expansion of world trade in the second
half of the twentieth century.
66) The most-favored-nation policy is a WTO privilege that allows member nations to restrict tariff cuts
to members.
67) One of the reasons that neighboring countries tend to ally is similar consumer tastes.
68) Most trade groups contain countries in the same area of the world, even though neighboring
countries usually lack a common history and interests.
69) The goal of a free trade agreement is to abolish all tariffs among member countries.
70) When free mobility of factors of production is added to a common market, the result is a customs
union.
71) Static effects are the overall growth in the market and the impact on a company caused by expanding
production and by the company’s ability to achieve greater economies of scale.
72) The shifting of resources from inefficient to efficient companies as trade barriers fall produces static
effects.
73) Trade creation allows consumers access to more goods at a lower price than would have been
possible without integration.
74) The shifting of trade to countries in a regional group at the expense of trade with countries not in the
group is known as trade internalization.
75) The European Commission is the European Union’s ultimate decision-making body and is composed
of the different ministers of the member countries.
76) The three major responsibilities of the European Parliament are legislative power, control over the
budget, and supervision of executive decisions.
77) The introduction of the euro has eliminated currency as a barrier to trade in all European countries.
78) The Single European Act set steps to accomplish monetary union in the European Union, including
the creation of the euro.
79) Production location is not an important choice when doing business in the European Union.
80) Although the European Union is a common market, member countries have different economic
growth rates.
81) NAFTA is an example of a common market.
82) The most important rationales for NAFTA are geographic proximity and trading importance.
83) Each country in NAFTA sets its own tariffs to the rest of the world.
84) The major trade groups in South America are CAN and MERCOSUR.
85) The formation of CARICOM has primarily been triggered by the desire of Jamaica, Trinidad, and
Tobago to expand the region’s market size and attract more FDI.
86) An NGO is a private institution independent from the government.
87) NGOs must be recognized by the United Nations in order to do humanitarian work in developing
countries.
88) Very few commodity agreements are successful in bringing together supplier and consumer
countries to stabilize commodity prices.
89) OPEC is an example of a producer’s cartel that is successful because of its ability to institute tariffs
on oil exports.
90) Toyota has been successful in Europe by exporting cars to Europe as well as designing and
manufacturing cars in Europe for the European market.
91) Describe the different types of regional economic integration and give an example of each type.
92) Explain the static effects and dynamic effects of economic integration. What is the difference
between trade creation and trade diversion resulting from economic integration?
93) What are the functions of the European Commission, the European Parliament, the Council, and the
European Court of Justice?
94) What are the rules of origin and regional content provisions of NAFTA?
95) What has been the impact of NAFTA on trade and employment in NAFTA nations?
96) Identify and briefly compare the major regional trading groups in Latin America, Asia, and Africa.
97) Are commodity agreements effective? Why or why not?
98) Why is geography important to most regional trade agreements? Provide examples of RTAs to
illustrate your answer.
99) In a brief essay, explain the roles of the World Trade Organization and the United Nations in
international trade.
100) What is the difference between a free trade agreement and a customs union? Provide examples of
each in your answer.