Groups of countries that seek mutual economic benefit from reducing interregional trade and tariff

barriers are called: 

C.  multinational market regions.
Multinational market regions are those groups of countries that seek mutual economic benefit from
reducing interregional trade and tariff barriers.

  Multinational market groups form: 

B.  large markets that provide potentially significant opportunities for international business.
Multinational market groups form large markets that provide potentially significant opportunities for
international business.

  It was not until this single market was established that the United States, Japan, and other countries
gave serious thought to creating other alliances. Which of the following is being referred to here? 
B.  The European Economic Community
Following the success of the European Steel and Coal Community, a global economic revolution began
in 1958 when the European Economic Community was ratified and Europe took the step that would
ultimately lead to the present-day European Union (EU). It was not until this single market was
established that the United States, Japan, and other countries gave serious thought to creating other
alliances.

  The World Trade Organization is wholly dedicated to _____. 

E.  making trade among nations more efficient
The World Trade Organization, with its 160 members and 24 observers, is wholly dedicated to making
trade among nations more efficient.

  Every type of economic union shares the development and enlargement of market opportunities as a
basic orientation. Which of the following best describes the primary way market opportunities are
enlarged by economic unions? 
A.  Preferential tariff treatment for participating members
Usually, markets are enlarged through preferential tariff treatment for participating members,
common tariff barriers against outsiders, or both.

  Nations with complementary economic bases are least likely to: 

E.  encounter frictions in the development and operation of a common market unit.
Nations with complementary economic bases are least likely to encounter frictions in the development
and operation of a common market unit.

  Which of the following is a requisite for the survival of any economic union? 
B.  Having agreements and mechanisms in place in order to settle economic disputes
For an economic union to survive, it must have agreements and mechanisms in place to settle economic
disputes.

 Which of the following is the basic requisite for the development of a supranational market
arrangement? 
A.  Political amenability among countries
Political amenability among countries is another basic requisite for the development of a supranational
market arrangement.
 

With respect to the political factors that affect supranational markets, which of the following is one of
the most cherished possessions of any nation? 
D.  State sovereignty
Before entering into an economic union, a country should be clear about the advantages of the
economic union. Moreover, the benefits must greatly outweigh the disadvantages before nations forgo
any part of their sovereignty. It is therefore implied that state sovereignty is a cherished possession of
any nation.

 
Which of the following is one of the multilateral free trade agreements signed by the United States? 
B.  NAFTA
The United States has bilateral free trade agreements in progress and approved with several nations in
addition to multilateral agreements such as NAFTA and DR-CAFTA (Dominican Republic, Central
American Countries, and the U.S.).

As George Platt examines markets that might match his company's investment requirements, he is
particularly interested in the fact that the European Community has an extensive transportation
network. This network seems to draw all the member nations closer together. Which of the following
critical factors for ensuring an effective economic union is Mr. Platt most likely examining when
reviewing transportation networks? 
D.  Geographic proximity
Geographical closeness does facilitate the functioning of a common market. It is seen that
transportation networks are likely to be interrelated and well developed when countries are close
together. Therefore, Mr. Platt is judging the effectiveness of the economic union by assessing the
geographic proximity of the members of the union.

 
Similarity of cultures can make or break an economic union. Although there is great cultural diversity in
the European Union, key members share _____ and are commonly aware of being European. 
B.  a long-established Christian heritage
Cultural similarity eases the shock of economic cooperation with other countries. The more similar the
culture, the more likely an agreement is to succeed, because members understand the outlook and
viewpoints of their colleagues. Although there is great cultural diversity in the European Union, key
members share a long-established Christian heritage and are commonly aware of being European.

 
One of the first factors that gave the European Union an edge over others in the process of becoming a
common market was: 
D.  a well-developed transportation
network.
One of the first major strengths of the European Union was its transportation network; the opening of
the tunnel between England and France further bound this common market.

 
 At the most general level, the _____ represents the most important and comprehensive trade
agreement in history. 
D.  WTO
The World Trade Organization represents the most important and comprehensive trade agreement in
history.

The most basic economic integration and cooperation is the: 

C.  regional cooperation for development (RCD).
The most basic economic integration and cooperation is the regional cooperation for development
(RCD). In the RCD arrangement, governments agree to participate jointly to develop basic
industries beneficial to each economy.

  A _____ is an agreement between two or more countries to reduce or eliminate customs duties
and nontariff trade barriers among partner countries while members maintain individual tariff
schedules for external countries. 
E.  free trade
area
A free trade area is an agreement between two or more countries to reduce or eliminate customs
duties and nontariff trade barriers among partner countries while members maintain individual
tariff schedules for external countries.

Essentially, a free trade area (FTA) provides its members with: 

B. a mass market without trade barriers among partner countries.
A free trade area provides its members with a mass market without barriers to impede the flow of goods
and services among partner countries.

  A _____ has reduced or eliminated internal tariffs and adds a common external tariff on products
imported from countries outside the group. 
D.  customs union
A customs union enjoys the free trade area's reduced or eliminated internal tariffs and adds a
common external tariff on products imported from countries outside the union

Which of the following was a customs union before becoming a common market? 
D.  The European Union
A common market is a unified economy and lacks only political unity to become a political union.
The European Union was a customs union before becoming a common market.

A _____ agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of
common external tariffs, and removes all restrictions on the free flow of capital and labor among
member nations. 
B.  common market
A common market agreement eliminates all tariffs and other restrictions on internal trade, adopts a
set of common external tariffs, and removes all restrictions on the free flow of capital and labor
among member nations.
 
 
 
Which of the following is one of the reasons that have hampered the conferences held by the
United Nations Economic Commission for Africa to bring about holistic integration? 
A.  Governmental inexperience

The United Nations Economic Commission for Africa (ECA) has held numerous conferences but
has been hampered by governmental inexperience, undeveloped resources, labor problems, and
chronic product shortages.
 
95. Which of the following makes the South African market an important base for serving nearby African
markets that are too small to be considered individually? 

B.  The South African market's developed infrastructure

The South African market has a developed infrastructure—airports, railways, highways,
telecommunications—that makes it important as a base for serving nearby African markets too small to be
considered individually but viable when coupled with South Africa.
 
96. South Africa is most likely to experience rapid economic growth in as few as 10 years owing to: 
 
C.  its industrial base.
South Africa has an industrial base that will help propel it into rapid economic growth, with the possibility
of doubling its GNP in as few as 10 years. The South African market also has a developed infrastructure—
airports, railways, highways, telecommunications—that makes it important as a base for serving nearby
African markets too small to be considered individually but viable when coupled with South Africa.
 
97. Which of these is the most advanced and viable of Africa's regional organizations? 
 

A.  Economic Community of West African States

B.  African Development Bank
C.  Southern African Development Community
D.  Organization of African Unity
E.  Economic Community of Central African States
The Southern African Development Community is the most advanced and viable of Africa's regional
organizations.
 
98. Which of the following is a reason for East Asia's economic success? 
 

A.  The availability of an extraordinarily rich land

B.  The existence of a common currency
C.  The implementation of Marxist-socialist policies
D.  The rise of autocracy
E.  The emphasis placed on education and healthcare
The formula for success in East Asia was an outward-oriented, market-based economic policy coupled with
an emphasis on education and healthcare.

 
99. _____ has the potential to become the newest big emerging market (BEM), but its development will depend
on government action and external investment by other governments and multinational firms. 
 

A.  South Africa

B.  Canada
C.  Japan
D.  Singapore
E.  Britain
South Africa has the potential to become the newest big emerging market (BEM), but its development will
depend on government action and external investment by other governments and multinational firms. In
varying degrees, foreign investors are leading the way by making sizable investments.

 
 
101. Which of the following is true of large multinational markets? 
 
E.  They employ coordinated programs to foster economic growth.
Most multinational groups have coordinated programs to foster economic growth as part of their cooperative
efforts.

 
102. The adoption of the euro has facilitated which of the following? 
 

A.  Increased complexity of online marketing

B.  Elimination of parallel imports
C.  Increase in European import tariffs by 60 percent
D.  Easily recognizable price differentials
E.  Decrease in the toughness of market competition in Europe
Price standardization among country markets will be one of the necessary changes to avoid the problem of
parallel imports. With the adoption of the euro, price differentials are much easier to spot, and the consumer
can search for the best bargains in brand-name products more easily. Furthermore, the euro is making
marketing on the Internet a much simpler task for European firms.