International marketing 4th edition Dana-Nicoleta Lascu Test Bank.

1. People in neighboring countries often share a language, as well as other cultural elements. ANS: T People in neighboring countries often share a language, as well as other cultural elements, such as traditions, norms, and religion. North Africa and the Middle East are examples of this phenomenon. This is found in the "A Common Culture" section (4-1a). PTS: 1 DIF: Easy 2. A common language between neighboring countries facilitates commerce and marketing. ANS: T The commonality of language and other elements of culture facilitate interaction between neighboring countries and promote cooperation: In an economic relationship in which culture does not constitute a barrier to communication, individuals are more likely to understand their counterparts and their position. In addition, a common language facilitates commerce and marketing in particular. This is found in the “A Common Culture” section (4-1a). PTS: 1 DIF: Easy 3. A history of dominance by one nation in a region often leads to shared cultural elements among the different peoples in that region. ANS: T A history of dominance by one nation in a region often leads to shared cultural elements, such as language and culture, among the different peoples in that region. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Easy 4. The countries of the former Soviet Union have experienced Russian economic, political, and cultural dominance. As a result, Russian is spoken in many countries in Europe and Asia that were formerly part of the Soviet Empire. ANS: T Russia’s economic, political, and cultural dominance in the former Soviet Union has resulted, for example, in the use of the Russian language from the Baltics (Estonia, Lithuania, and Latvia) and the Ukraine, to the Asian republics of the former federation, such as Turkmenistan and Azerbaijan. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Medium 5. Countries in East Africa formerly colonized by Belgium share a common second language (French), and have extensive economic and political ties with Belgium. ANS: T Countries in East Africa formerly colonized by Belgium share a common second language (French), as well as extensive economic and political ties with the former colonist. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Medium 6. Former colonies of the British Empire form the Commonwealth of Independent States, a body that meets periodically to address issues of common concern and that recognizes the British monarchy as its symbolic leader. ANS: F Former colonies of the British Empire form the Commonwealth of Nations, a body that meets periodically to address issues of common concern and that recognizes the British monarchy as its symbolic leader. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Easy 7. Regional proximity is not an important facilitator of economic cooperation. ANS: F Regional proximity is an important facilitator of economic cooperation. Communication and transportation are facilitated by regional proximity, and these help to facilitate economic cooperation. This is found in the “Regional Proximity” section (4-1c). PTS: 1 DIF: Medium 8. Countries with a different level of economic development are more likely to be successful in establishing and maintaining regional economic integration mechanisms than countries of similar levels of economic development because the more powerful country acts as a "benevolent dictator." ANS: F Countries with a similar level of economic development are more likely to be successful in establishing and maintaining regional economic integration mechanisms than countries of different levels of economic development. In an unbalanced relationship the more powerful country is likely to further its own interest at the expense of countries that lag behind it on economic development. This may be found in the "Regional Proximity" section (4-1c). PTS: 1 DIF: Medium 9. The European Union is characterized by a shared regional culture. ANS: F The European Union is not characterized by a shared regional culture. The Union is successful primarily due to economic commonalities, not cultural similarities. This is found in the "Economic Considerations" section (4-1d). PTS: 1 DIF: Medium 10. In the case of the Southern Cone Common Market (MERCOSUR), the member countries agree with the associate members on the common external tariffs they should impose on international business entering the region. ANS: F In the case of the Southern Cone Common Market (MERCOSUR), the member countries disagree with the associate members on the common external tariffs they should impose on international business entering the region. This is found in the "Economic Considerations" section (4-1d). PTS: 1 DIF: Medium 11. One of the more important obstacles to regional economic and political integration is the threat of losing national identity and sovereignty as part of the larger regional structure. ANS: T One of the more important obstacles to regional economic and political integration is the threat of losing national identity and sovereignty as part of the larger regional structure. Countries have many icons of national identity that generations have fought for centuries to maintain. This is found in the "Political Considerations" section (4-1e). PTS: 1 DIF: Easy 12. In regional economic integration, most countries begin with developing a common market. ANS: F In the beginning of economic integration, most countries start at the industry-specific bilateral or multilateral agreement level. A common market is a more complex regional agreement usually reserved for a more advanced stage. This is found in the "Levels of Regional Economic and/or Political Integration and Examples of Integration Successes" section (4-2). PTS: 1 DIF: Medium 13. The Asia-Pacific Economic Cooperation (APEC) is attempting to forge an institutional integration that will lead to a free trade association. ANS: F Although APEC does not attempt to forge such an integration, it has nevertheless been instrumental in fostering free trade. This is found in the "Bilateral Agreements and Multilateral Forums and Agreements" section (4-2a). PTS: 1 DIF: Hard 14. The Commonwealth of Independent States (CIS) has never had any noteworthy economic content. ANS: T The text uses the CIS as an example of a political agreement. The 12 non-Baltic successors to the Soviet Union formed the CIS, but as the text states, nothing important came out of the agreement. This is found in the "Bilateral Agreements and Multilateral Forums and Agreements" section (4-2a). PTS: 1 DIF: Medium 15. In a free trade agreement, countries are free to charge their own tariffs to all entities external to the free trade market. ANS: T A free trade agreement takes place between two or more countries and it involves a reduction in, or even elimination of, customs duties and other trade barriers on all goods and services traded between the member countries. Countries are free to charge their own tariffs to all entities external to the free trade market. This is found in the "Free Trade Agreements" section (4-2b). PTS: 1 DIF: Medium 16. Iceland, Liechtenstein, Norway, Switzerland, and Germany are the current members of the European Free Trade Association. ANS: F The current member countries of the EFTA are Iceland, Liechtenstein, Norway and Switzerland. Germany was never a member of the EFTA. This is found in the "Free Trade Agreements" section (4- 2b). PTS: 1 DIF: Hard 17. None of the European Free Trade Association (EFTA) members have joined the European Monetary Union. ANS: T Norway participated in the Schengen agreement on the elimination of border controls, but none of the EFTA countries have joined the European Monetary Union. This is found in the "Free Trade Agreements" section (4-2b). PTS: 1 DIF: Hard 18. In spite of the national vote against joining the European Union, Switzerland is engaging in bilateral negotiations, securing agreements that would help it to join. ANS: T In spite of the national vote against joining the European Union, Switzerland is engaging in bilateral negotiations, securing agreements that would help it join. It has negotiated issues in the area of the collection of statistics, on the environment, agricultural production and customs fraud, cross-border security, youth and education, among others. This is found in the "Free Trade Agreements" section (4- 2b). PTS: 1 DIF: Medium 19. The goal of ASEAN is to ultimately create a free trade area where tariff and non-tariff barriers are eliminated. ANS: T ASEAN is the main example of regional economic integration in Asia. Its goal is to create a free trade area where tariff and non-tariff barriers are eliminated. This will provide a substantial market of over 330 million consumers to companies in the region. This is found in the "Free Trade Agreements" section (4-2b). PTS: 1 DIF: Easy 20. Under the NAFTA agreement, in order to benefit from a duty-free status, goods must have a 51% North American content. ANS: F Under the NAFTA agreement, in order to benefit from a duty-free status, goods must have a 60% North American content. This is found in the "Free Trade Agreements" section (4-2b). PTS: 1 DIF: Hard 21. Because of the NAFTA agreement, the U.S. has removed all trade barriers for companies operating in Mexico and Canada. ANS: F In spite of its free-market rhetoric, the U.S. has engaged in protectionist activity that hampers free trade among member countries. The recent Mexican trucking controversy is an example of this. This is found in the "Free Trade Agreements" section (4-2b). PTS: 1 DIF: Medium 22. The North American Free Trade Agreement (NAFTA) is an ambitious plan to create a market of about 800 million people and an annual production worth $11 trillion in the Americas. ANS: F The Free Trade Area of the Americas (FTAA) is an ambitious plan to create a market of about 800 million people and an annual production worth $11 trillion in the Americas. This is found in the "Free Trade Agreements" section (4-2b). PTS: 1 DIF: Hard 23. The Southern African Development Community is a free trade organization that promotes economic cooperation among a coalition of 14 of Africa's more affluent and developed nations. ANS: T The Southern African Development Community is a free trade organization that promotes economic cooperation among a coalition of 14 of Africa's more affluent and developed nations. Member countries include Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mozambique, Namibia, the Seychelles, the Republic of South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. This is found in the "Free Trade Agreements" section (4-2b). PTS: 1 DIF: Medium 24. The Andean Common Market and the Southern Cone Common Market aspire to become a common market. ANS: T The Andean Common Market and the Southern Cone Common Market aspire to become a common market. However, they are currently only customs unions. They are in the process of agreeing upon common external tariffs, which is a step in the common market direction. This is found in the "Customs Unions" section (4-2). PTS: 1 DIF: Easy 25. Only the European Union has achieved the common market stage of economic integration for ALL member states. ANS: T While only the EU has achieved the common market stage for all member states, a number of other forms of economic integration are aiming to achieve this stage. This may be found in the "Common Markets" section (4-2d). PTS: 1 DIF: Medium 26. In Europe, member countries agreed at the Treaty of Rome to establish the European Economic Community, which eliminated all tariffs, established common external tariffs, and allowed for the free movement of capital and labor within its territory. ANS: T In Europe, member countries agreed at the Treaty of Rome to establish the European Economic Community, which eliminated all tariffs, established common external tariffs, and allowed for the free movement of capital and labor within its territory. Moreover, the member countries also set in place regulations and bodies that would ultimately form the basis for a monetary and political union. This may be found in the "Common Markets" section (4-2d). PTS: 1 DIF: Medium 27. According to the European Exchange Rate Mechanism (ERM), a currency could only fluctuate up to 2.5% of its value in either direction; when this value was consistently surpassed, the mechanism would adjust the currency upward or downward, respectively, creating a snake-like structure. ANS: T According to the European Exchange Rate Mechanism (ERM), a currency could only fluctuate up to 2.5% of its value in either direction; when this value was consistently surpassed, the mechanism would adjust the currency upward or downward, respectively, creating a snake-like structure. This is why the ERM is also known as the "snake." This is found in the "Common Markets" section (4-2d). PTS: 1 DIF: Medium 28. The Latin American Integration Association does not offer a differential treatment to countries of different levels of development in an attempt to standardize its polices. ANS: F The LAIA does offer differential treatment to countries of different levels of development to avoid preferential treatment of the larger countries (blamed for the failure of LAFTA). This may be found in the "Common Markets" section (4-2d). PTS: 1 DIF: Hard 29. The Andean Community (AnCom) has eliminated trade restrictions (tariff and non-tariff) within the Andean region, but it has not yet agreed on uniform external tariffs and rules for foreign investment. ANS: F The Andean Community (AnCom) has eliminated trade restrictions (tariff and non-tariff) within the Andean region. It has also agreed on uniform external tariffs and rules for foreign investment. However, the Community is not especially stable - for example, in 2007, Venezuela opted out. This may be found in the "Common Markets" section (4-2d). PTS: 1 DIF: Medium 30. The Andean Common Market (AnCom) was responsible for eliminating trade restrictions (tariff and nontariff) within the Andean region. ANS: T The Andean Common Market (AnCom), known previously as the Andean Pact, was established in the 1970s and renamed as the Andean Community in 1996. In addition to eliminating trade restrictions (tariff and nontariff) within the Andean region, AnCom also provides for uniform external tariffs and rules for foreign investment. This may be found in the "Common Markets" section (4-2d). PTS: 1 DIF: Medium 31. The Southern Cone Common Market (MERCOSUR) is looking North, at NAFTA, for trade and cooperation accords. ANS: F Initially, MERCOSUR was expected to look North, at NAFTA, for trade and cooperation accords; surprisingly, they have opted to first approach the European Union. This may be found in the "Common Markets" section (4-2d). PTS: 1 DIF: Medium 32. South Africa is a member of The Common Market for Eastern and Southern Africa (COMESA). ANS: F South Africa is not a member of The Common Market for Eastern and Southern Africa (COMESA). This may be found in the "Common Markets" section (4-2d). PTS: 1 DIF: Hard 33. Successful monetary unions also mean a successful economic integration and the elimination of trade restrictions for members of the union. ANS: F Successful monetary unions do not necessarily mean successful economic integration and the elimination of trade restrictions. For example ECOWAS has a successful monetary union, but it has not be able to complete a successful economic integration. This is found in the "Monetary Union" section (4-2e). PTS: 1 DIF: Medium 34. The 1992 Maastricht Treaty had as a purpose to provide for the European Monetary Union (EMU) and to create the European Central Bank, a single currency, and fixed exchange rates. ANS: T The 1992 Maastricht Treaty had as a purpose to provide for the European Monetary Union (EMU) and to create the European Central Bank, a single currency, and fixed exchange rates. This is found in the "Monetary Union" section (4-2e). PTS: 1 DIF: Medium 35. Countries that are full members of the European Monetary Union are often referred to as “Euroregion.” ANS: F Countries that are full members of the European Monetary Union are often referred to as Euroland. This is found in the "Monetary Union" section (4-2e). PTS: 1 DIF: Easy 36. The West African Economic and Monetary Union (WAEMU) is one of the first attempts at economic integration in Africa. ANS: T The West African Economic and Monetary Union (WAEMU) is one of the first attempts at economic integration in Africa. This is found in the "Monetary Union" section (4-2e). PTS: 1 DIF: Easy 37. One of the reasons that the Economic Community of West African States (ECOWAS) has not been able to achieve complete economic integration is because Nigeria has dominated the group. ANS: T Nigeria has dominated the group. Other reasons why ECOWAS has not been able to achieve complete economic integration include civil unrest, regional conflict, and a lag in economic development compared to other market groups in the world. This is found in the "Monetary Union" section (4-2e). PTS: 1 DIF: Medium 38. Political union represents the highest level of integration. ANS: T Political union represents the highest level of integration. It assumes a viable economic integration, and it involves the establishing of viable common governing bodies, legislative bodies, and enforcement powers. This may be found in the "Political Union" section (4-2f). PTS: 1 DIF: Easy 39. A monetary union represents the highest level of integration between countries. ANS: F A political union represents the highest level of integration between countries. This is found in the “Political Unions” section (4-2f). PTS: 1 DIF: Easy 40. The European Court of Justice is the European Union's equivalent of the U.S. Supreme Court. However, unlike the U.S. Supreme Court, the European Court of Justice's decisions are not final. ANS: T The European Court of Justice's decisions are final. The Court's judgments are binding to member countries and cannot be appealed in national courts. This is found in the "Monetary Union" section (4- 2e). PTS: 1 DIF: Medium MULTIPLE CHOICE 1. Which of the following is a factor that prompts countries to favor trade with other countries? a. Sharing a culture c. Sharing a common border b. Sharing a common language d. All of the above. ANS: D Sharing a culture, a common language, a common history, or even common borders may lead countries to join forces in an effort to eliminate barriers to trade. This may be found in the "A Common Culture" section (4-1a). PTS: 1 DIF: Easy 2. A history of dominance by one nation in a region often leads to shared a. cultural elements c. natural resources b. currencies d. None of the above is true. ANS: A A history of dominance by one nation in a region often leads to shared cultural elements among the different peoples in that region, as well as to similar economic and political structures. However, countries are likely to adopt their own currency and to protect their own natural resources. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Easy 3. Russian dominance in the former Soviet Union led to the use of the Russian language in many countries in Europe and Asia. In which of the following countries has Russian never been used? a. Estonia b. Lithuania c. Turkmenistan d. Russian has been used in all the above countries ANS: D Russia’s economic, political, and cultural dominance in the former Soviet Union has resulted in the use of the Russian language from the Baltics (Estonia, Lithuania, and Latvia) and the Ukraine, to the Asian republics of the former federation, such as Turkmenistan and Azerbaijan. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Medium 4. The countries of the former Soviet Union shared a history of ____. a. Russian cultural dominance c. state-owned enterprises b. Russian political dominance d. All of the above ANS: D The countries of the former Soviet Union shared a history of Russian economic, political, and cultural dominance. The countries also shared economic and marketing structures, many of which continue to survive—for example, state-owned enterprises and large, nationwide distributors. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Medium 5. Countries in East Africa were formerly colonized by ____ and share a common second language, as well as ties with the former colonist. a. Belgium c. Turkey b. Canada d. Spain ANS: A Countries in East Africa were formerly colonized by Belgium and share a common second language (French), as well as extensive economic and political ties with the former colonist. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Medium 6. Countries in East Africa ____. a. were colonized by Belgium. b. use French as their second language. c. maintain strong ties with their former colonist. d. all of the above are true. ANS: D Countries in East Africa were formerly colonized by Belgium and share a common second language (French), as well as extensive economic and political ties with the former colonist. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Easy 7. Former colonies of the British Empire ____. a. recognizes the British monarchy as its symbolic leader b. are part of the Commonwealth of Independent States c. were dominated by the Russian Empire d. are now all members of the European Union ANS: A Former colonies of the British Empire form the Commonwealth of Nations, a body that meets periodically to address issues of common concern and that recognizes the British monarchy as its symbolic leader. This may be found in the "A History of Common Economic and Political Dominance" section (4-1b). PTS: 1 DIF: Easy 8. Which of the following is not true regarding the members of the European Union? a. Members of the EU are regionally proximal. b. Members of the EU are culturally similar. c. Members of the EU are adopting a common currency. d. Members of the EU have a highly developed transportation infrastructure. ANS: B In the case of the European Union, the member countries are quite dissimilar culturally; however, their regional proximity and the highly developed transportation infrastructure within the region, as well as economic similarity between the different countries, have all greatly contributed to the success of the regional economic and political integration. Members of the EU are adopting the Euro as their common currency. This may be found in the "Regional Proximity" section (4-1c). PTS: 1 DIF: Medium 9. Which of the following is not a commonality shared by member countries of the European Union? a. A highly developed industrial base. b. High GDP per capita. c. Extensive transportation infrastructure. d. All of the above are shared by members of the EU. ANS: D The EU is successful because of the economic commonalities shared by member countries. In addition to the items listed above, EU members also share high productivity and telecommunications infrastructure. This may be found in the "Economic Considerations" section (4-1d). PTS: 1 DIF: Medium