Chapter 2 – Global Marketplaces and Business Centers

INTRODUCTION

1. Geography does not play a crucial role in international business.

2. Countries with similar income levels tend to trade more with each other.

3. The Triad includes Japan, the United States and Canada, and the European Union.

THE MARKETPLACES OF NORTH AMERICA

4. According to the text, the U.S. dollar serves as the invoicing currency.

5. The United States attracts flight capital because of its political stability and military strength.

6. Express capital is money sent out of a politically or economically unstable country to one perceived as a safe haven.

7. General Motors is currently the world’s largest company, with 1999 sales of $177 billion.

8. Two-way trade between Mexico and the United States forms the single largest bilateral trading relationship in the world.

9. Now the world’s largest Spanish-speaking nation, Brazil declared its independence from its Spanish conquerors in 1810.

10. The United States attracts flight capital because of its political and economic stability.

11. International trade has become increasingly more important, and it is a relatively big part of the U.S. economy.

12. The single largest bilateral trading relationship in the world is between United States and Japan.

THE MARKETPLACES OF WESTERN EUROPE

13. With a GDP of $8.3 trillion and a population of 377 million, one of the world's richest markets is China.

14. In 1999, eleven EU members created a new common currency known as the lira.

15. From an economic perspective, Germany is the most important member of the European Union.

16. With a 1999 GDP of $2.1 trillion, Japan possesses the world’s third-largest economy.

17. Countries of Central Europe that were carved out of the former Yugoslavia include Croatia, Macedonia, Slovenia.

18. As an independent state, Russia is the world’s largest country in land mass and the sixth-largest in population.

19. On a per capita basis, Hungary has received more FDI than any other country in the Central European region.

20. Government intervention and ownership play a less important role in the economies of EU countries than in that of the United
States.
21. The policies of the United Kingdom towards the EU have changed since the change from conservatives to the liberal party.

THE MARKETPLACES OF ASIA

22. The Japanese industrial structure controlled by large families of interrelated companies is referred to as chaebol.

23. The NAFTA countries are the only countries once categorized as less developed by the World Bank that have subsequently
achieved high-income status.

THE MARKETPLACES OF AFRICA AND THE MIDDLE EAST

24. In 1999, Israel with a GDP of $129 billion, had the largest economy in the Middle East.
THE MARKETPLACES OF SOUTH AMERICA

25. The high level of inflation that is characteristic of many South American countries can be attributed to import substitution
policies.

Multiple Choice

INTRODUCTION

26. All of the following countries are included in the Triad EXCEPT:
a. Japan.
b. China
c. the European Union
d. the United States

27. Which of the following countries is not included in the Quad?

a. Japan
b. the European Union
c. China
d. the United States
e. Canada

28. Together the 807 million residents of the Quad countries produce __________ of the world’s GDP.
a. 33%
b. 43%
c. 53%
d. 63%
e. 73%

THE MARKETPLACES OF NORTH AMERICA

29. Home to 473 million people, the North American countries produce approximately _________ of the world’s output.
a. 13%
b. 23%
c. 33%
d. 43%
e. 53%

30. Which of the following countries has the world’s third-largest population?
a. Japan
b. the United Kingdom
c. the United States
d. Canada
e. France
31. Which of the following countries has the largest economy in the world?
a. Japan
b. the United Kingdom
c. the United States
d. Canada
e. France

32. Which of the following countries' GDP accounts for the largest portion of the world's GDP?
a. Germany
b. United States
c. United Kingdom
d. Japan
e. China

33. With 1999 gross domestic product (GDP) of $8.7 trillion, _____________ accounts for more than one quarter of the world’s GDP.
a. the United States
b. Canada
c. the United Kingdom
d. Japan
e. Mexico

34. Which of the following countries enjoys the highest per capital income of the North American countries?
a. the United States
b. Canada
c. Mexico
d. New Zealand
e. Greenland

35. According to the text, the _____________ serves as the invoicing currency.
a. the German mark
b. the Japanese yen
c. the U.S. dollar
d. the euro
e. the British pound sterling

36. The currency in which the sale of goods and services is denominated, for about half of all international transactions and is an
important component of foreign-currency reserves worldwide is ______________.
a. the German mark
b. the U.S. dollar
c. the Japanese yen
d. the euro
e. the British pound sterling
37. The _____________ attracts flight capital because of its political stability and military strength.
a. Japan
b. the United Kingdom
c. Canada
d. the United States
e. France

38. _____________ is money sent out of a politically or economically unstable country to one perceived as a safe haven.
a. Floating capital
b. Flight capital
c. Express capital
d. Protected capital
e. Bonded capital

39. Citizens unsure of the value of their home country’s currency often choose to keep their wealth in ______________.
a. euros
b. yens
c. liras
d. dollars
e. marks

40. According to the text, foreigners have invested nearly __________ in U.S. factories, equipment, and property.
a. $1 billion
b. $10 billion
 c. $100 billion
d. $1 trillion
e. $10 trillion

41. ____________ is currently the world’s largest company, with 1999 sales of $177 billion.
a. General Electric
b. General Motors
c. Ford Motor Company
d. Toyota Motor Company
e. Microsoft Corporation

42. Which of the following countries has the world’s second-largest land mass?
a. the United States
b. the United Kingdom
c. Canada
d. Australia
e. New Zealand
43. Exports are vital to the Canadian economy, accounting for __________ of its 1999 GDP of $612 billion.
a. 13%
b. 23%
c. 33%
d. 43%
e. 53%

44. Canada’s most important exports reflect its rich natural resources and include all of the following EXCEPT:
a. forest products.
b. petroleum.
c. coffee.
d. grain.

45. _____________ is the dominant market for Canadian goods, receiving over three-quarters of Canada’s exports in a typical year.
a. Mexico
b. Greenland
c. The United States
d. Japan
e. Australia

46. Two-way trade between ______________ and _____________ forms the single largest bilateral trading relationship in the world.
a. Mexico and the United States
b. Canada and Mexico
c. the United States and Canada
d. Japan and China
e. Mexico and Japan

47. International investors have long been attracted to _____________ because of its proximity to the huge U.S. market and the
stability of its political and legal systems.
a. Mexico
b. Canada
c. Greenland
d. New Zealand
e. Australia

48. Canada's attraction as a destination for foreign direct investment is being threatened by​ ___________.
a. conflict between French-speaking Canadians and English-speaking Canadians
b. the quality of its infrastructure
c. its close proximity to the U.S. market
d. the degree of stability of its economic system
e. the degree of stability of its legal and political system

49. Now the world’s largest Spanish-speaking nation, ____________ declared its independence from its Spanish conquerors in 1810.
a. Peru
b. Brazil
c. Puerto Rico
d. Mexico
e. Colombia
50. In 1994, all of the following countries initiated the North America Free Trade Agreement EXCEPT:
a. Canada.
b. the United States.
c. Mexico.
d. Chile.

51. Which of the following trade agreements is reducing barriers to trade among Canada, the United States, and Mexico over a
fifteen-year period?
a. the European Union
b. the North America Free Trade Agreement
c. Mercosur
d. the Andean Pact

52. To combat high inflation, deficit trade balance, and rising external debt in the 1980s, Mexico took which of the following actions?
a. Economic policies changed from import substitution approach to market-driven one.
b. Mexico became more protectionist.
c. Mexico increased the price of oil to generate more money.
d. Economic policies changed from market-driven policies to import substitution approach.
e. Increased government's role in the economy.

53. Problems of economic development in Central America and the Caribbean include the following EXCEPT:
a. U.S. military intervention.
b. inability to export some goods to developed countries.
c. weak middle class.
d. inferior educational systems.
e. political stability.

THE MARKETPLACES OF WESTERN EUROPE

54. With a GDP of $8.3 trillion and a population of 377 million, one of the world's richest markets is​ ______________.
a. Japan.
b. Canada
c. the European Union.
d. China
e. the United Kingdom
55. In 1999, eleven EU members created a new common currency known as _____________.
a. the lira
b. the peso
c. the mark
d. the euro
e. the yen

56. From an economic perspective, which of the following EU members is the most important?
a. United Kingdom
b. France
c. Italy
d. Belgium
e. Germany

57. With a 1999 GDP of $2.1 trillion, ______________ possesses the world’s third-largest economy.
a. the United States
b. the United Kingdom
c. Mexico
d. Japan
e. Germany

58. Which of the following EU countries has been a leading proponent of strengthening the powers of EU's government and
increased political and economic union within Europe?
a. Germany
b. Belgium
c. Italy
d. United Kingdom
e. France

59. Which of the following EU countries has been an advocate for less government intervention, and a supporter of free trade?
a. Belgium
 b. United Kingdom
c. Italy
d. Germany
e. France

60. Western European countries that are not EU members include all of the following EXCEPT:
a. Iceland.
b. Malta.
c. Germany.
d. Norway.
e. Switzerland.

61. Which of the following countries is NOT labeled a “postage stamp” country?
a. Andorra
b. Monaco
c. Spain
d. Liechtenstein
THE MARKETPLACES OF EASTERN AND CENTRAL EUROPE

62. Central Europe is composed of all of the following countries EXCEPT:

a. Albania.
b. Austria.
c. Bulgaria.
d. Hungary.
e. Germany.

63. Countries of Central Europe that were carved out of the former Yugoslavia include:
a. Croatia, Macedonia, Slovenia.
b. Bosnia-Herzegovina, Estonia, Albania.
c. Czech Republic, Estonia, Latvia.
d. Lithuania, Latvia, Croatia.
e. Serbia, Slovakia, Estonia.

64. The economic and political reforms of ______________ led to the Soviet Union’s collapse in 1991 and subsequent declarations of
independence by the fifteen Soviet republics.
a. Yelstin
b. Putin
c. Klaus
d. Gorbachev

65. The fifteen Soviet republics that declared independence following the Soviet Union’s collapse in 1991 are now often referred to as
the ______________.
a. Newly Divided States
b. Newly Independent States
c. Recently Changed States
d. Newly Democratic States

66. All of the following are countries that decided not to form the Commonwealth of Independent States EXCEPT:
a. Estonia.
b. Latvia.
c. Albania.
d. Lithuania.

67. In 1992, twelve of the Newly Independent States formed ______________ as a forum to discuss issues of mutual concern.
a. the European Union
b. the World Trade Organization
c. the United Nations
d. Commonwealth of Independent States

68. As an independent state, ______________ is the world’s largest country in land mass and the sixth-largest in population.
a. China
b. the United States
c. Brazil
d. Korea
e. Russia
69. Who was Russia’s first democratically-elected President who tried to privatize many of Russia’s state-owned firms?
 a. Yelstin
b. Putin
c. Klaus
d. Gorbachev

70. Which of the following is NOT mentioned in the text as one of the Central European countries that is now classified as an upper
middle-income country by the World Bank and is further along the decentralized market systems process than other Central
European countries?
a. the Czech Republic
b. Hungary
c. Bulagaria
d. Poland

71. According to the text, ______________ was the last of the communist countries in Central Europe.
a. the Czech Republic
b. Hungary
c. Bulagaria
d. Poland

72. In 1968, Hungary instituted market-oriented reforms within the context of communism known as _____________.
a. planned socialism
b. market socialism
c. planned democracy
d. market democracy

73. On a per capita basis, ______________ has received more FDI than any other country in the Central European region.
a. the Czech Republic
b. Hungary
c. Bulagaria
d. Poland

THE MARKETPLACES OF ASIA

74. _______________ is home to over half of the world’s population, yet it produces only 25 percent of the world’s GDP.
a. Europe
b. North America
c. Asia
d. South America

75. All of the following demonstrate the importance of Asia to international business EXCEPT:
a. it is a major source of high quality product.
b. it is a major destination for FDI.
c. it has the world's largest communist economy.
d. it is a major supplier of capital to other countries.
e. it has aggressive and efficient entrepreneurs.

76. Which of the following countries has the world’s second largest economy?
a. the United Kingdom
b. the United States
c. Japan
d. Russia
e. China

77. The Japanese industrial structure controlled by large families of interrelated companies is referred to as​ ______________.
a. Keiretsu
b. Sogo sosha
c. chaebol
d. market socialism
e. MITI

78. Japanese keiretsus are typically centered around _______________.

a. a major Japanese automobile manufacturer
b. a major Japanese electronic manufacturer
c. a major Japanese bank
d. a major Japanese retailer
e. a major Japanese software company
79. According to the text, keiretsu members often rely on a _____________ to market their exports worldwide.
a. consortium
b. sogo sosha
c. chaebol
d. quad
e. triad

80. All of the following countries purchase approximately half of New Zealand’s export and imports EXCEPT:
a. China.
b. Japan.
c. the United States.
d. Australia.

81. The following countries are collectively known as the "Four Tigers:”
a. Singapore, South Korea, Taiwan, Japan.
b. Japan, Taiwan, Hong Kong, and Asia.
c. Taiwan, South Korea, Hong Kong, and Singapore.
d. Taiwan, Malaysia, Singapore, and South Korea.
e. Japan, Singapore, Malaysia, Indonesia.

82. All of the following are countries that are referred to as the newly industrialized countries EXCEPT:
a. Taiwan.
b. Singapore.
c. South Korea.
d. Japan.
e. Hong Kong.
83. ______________ are the only countries once categorized as less developed by the World Bank that have subsequently achieved
high-income status.
a. The European Union countries
b. The Four Tigers
c. The ASEAN nations
d. The Mercosur countries
e. The NAFTA countries

84. The privately owned large South Korean conglomerates that are in part responsible for the fast growth of the economy are
referred to as​ ______________.
a. chaebol
b. market socialism
c. Hyundai
d. Sogo sosha
e. keiretsu

85. According to the text, the most important of the chaebols in Korea include all of the following EXCEPT:
a. Samsung.
b. Toyota
c. Hyundai.
d. Daewoo Group.
e. LG.

86. Which of the following countries' economic development has been so fast-paced that it can no longer compete as a low-wage
manufacturing center?
a. China
b. Indonesia
c. Taiwan
d. Malaysia
e. Thailand

87. Taiwanese investments in factories and assembly plants in China can be explained by​ ____________.
a. the need for low-wage workers
b. the uncertain future of Hong Kong
c. the export oriented policies of Taiwan
d. the diplomatic relationship between the two countries
e. the focus on high-value-added industries such as electronics
88. The fact that exports from Singapore and from Hong Kong totaled more than 100% of each country's GDP is a reflection of
______________.
a. import substitution policies
b. cheap labor in both countries
c. the importance of the textile industry in both countries
d. both countries having a Chinese heritage
e. high level of re-exporting to other countries

89. The economic success of Singapore has turned the country into a major provider of​ ______________.
a. cheap labor in the region
b. communication and financial services in the region
c. textile products in the region
d. price sensitive products for the region
e. labor intensive products for the area

90. The following methods and programs used by the Chinese government increased the country's output from the private sector
EXCEPT:
a. freedom of firms to adjust production level.
b. introducing the "Great Leap Forward" program.
c. the establishment of enterprise zones.
d. ability of firms to go bankrupt without government permission.
e. granting independence from state planners.

91. Which of the following countries is the world’s second most populous country?
a. Russia
b. India
c. China
d. the United States
e. the United Kingdom

92. Recent expansion by foreign companies in India can be attributed to which of the following factors?
a. India's prosperous large domestic market
b. series of economic reforms by the government
c. government subsidies to some firms in India
d. colonial ties to the United Kingdom
e. population growth of about 2% a year, which will guarantee demand for companies' product

93. Which of the following countries have low labor costs and have been recipients of significant FDI in the 1980s and 1990s?
a. Thailand
b. Malaysia
c. China
d. Indonesia

THE MARKETPLACES OF AFRICA AND THE MIDDLE EAST

94. The origin of foreign manufacturers doing business in many African countries is greatly influenced by​ ______________.
a. shifting away from market-oriented policies by many African countries
b. political unrest in Africa
c. the availability of low cost labor in some African countries
d. the economic and cultural ties dating back to the colonial era
e. the abundance of natural resources in Africa
95. Which of the following countries in Africa enjoys the highest per capita income?
a. Libya
b. Gambia
c. Mozambique
d. Sierra Leone
e. Tansania

96. All of the following African countries are largely employed in subsistence farming EXCEPT:
a. Gambia
b. Mozambique
c. Sierra Leone
d. Libya
e. Tansania

97. In 1999, _____________, with a GDP of $129 billion, had the largest economy in the Middle East.
 a. Israel
b. Saudi Arabia
c. Kuwait
d. Iraq
e. Iran

98. Which of the following Middle Eastern countries enjoyed the highest per capita income in the region?
a. Saudi Arabia
b. Kuwait
c. Iraq
d. Israel
e. Iran

THE MARKETPLACES OF SOUTH AMERICA

99. The high level of inflation that is characteristic of many South American countries can be attributed to​ ______________.
a. political stability
b. import substitution policies
c. export promotion policies
d. lack of subsidy by government firms
e. large domestic market

100. Steps taken by major South American countries to reverse consequences of destructive import substitution policies include
______________.
a. increased non-tariff barriers
b. export promotion policies
c. privatization and free-trade agreements
d. increased per-capita income
e. use of mass production techniques