Exam (elaborations) TEST BANK International Marketing 16th Edition by Cateora, Philip, Graham, John, Gilly, Mary

1. After World War II, the U.S. provided assistance to other countries to develop their markets and improve global trade though it gained no returns on these initiatives. True False 2. The GATT became part of the World Trade Organization in 1995, with the ratification of the Uruguay Round agreements. True False 3. As part of the worldwide economic growth and rebuilding after World War II, countries once classified as less developed were reclassified as underdeveloped countries. True False 4. By the year 1971, the United States was selling more to other countries than it bought from them; that is, the United States had a favorable balance of trade. True False Full file at https://TestBanksC 2-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5. The Organization for Economic Cooperation and Development (OECD) has estimated that the economies of the developed world will expand at much faster rates when compared to the developing economies. True False 6. A nation’s balance-of-payments statement records all financial transactions between its residents and those of the rest of the world during a given period of time. True False 7. In a balance-of-payments record, if the credit and debit offset each other, it means that a nation is in particularly good financial condition. True False 8. The reserves account is a record of direct investment, portfolio investment, and short-term capital movements to and from countries. True False 9. As the U.S. trade deficit has grown, pressures have begun to push the value of the dollar to higher levels. True False 10. Protection of an infant industry is recognized by economists as a valid argument in favor of protectionism. True False Full file at https://TestBanksC 2-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 11. A case might be made for temporary protection of markets with excess productive capacity or excess labor when such protection could facilitate an orderly transition. True False 12. To encourage development of domestic industries, governments work on reducing trade barriers. True False 13. In general, tariffs decrease inflationary pressures. True False 14. Tariffs are often used as reprisals against protectionist moves of trading partners. True False 15. Quotas strictly permit importing on a case-by-case basis. True False 16. Quotas are more flexible than import licenses. True False 17. A VER is generally imposed under the threat of stiffer quotas and tariffs being set by the importing country if a VER is not established. True False Full file at https://TestBanksC 2-4 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 18. A government boycott is a partial restriction against the purchase and importation of certain goods and/or services from other countries. True False 19. In the context of blocked currency, blockage is accomplished by refusing to allow an importer to exchange its national currency for the currency of the seller. True False 20. It is mandatory for importers who want to buy a foreign good to apply for a business permit in that country. True False 21. The exchange permit can stipulate an unfavorable rate of exchange depending on the desires of the government. True False 22. The United States and other countries require some products to contain a percentage of “local content” to gain admission to their markets. True False 23. Antidumping laws were specifically designed to prevent foreign producers from investing in the U.S. local markets. True False Full file at https://TestBanksC 2-5 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 24. The Omnibus Trade and Competitiveness Act of 1988 focuses on assisting businesses to be more competitive in world markets as well as on correcting perceived injustice in trade practices. True False 25. The Omnibus Trade and Competitiveness act gives the U.S. president authority to restrict sales of a country’s products in the U.S. market if that country imposes unfair restrictions on U.S. products. True False 26. Obtaining export licenses for products on the export control list is more arduous than for those items that are exempted from the list. True False 27. The GATT panels were formed to resolve bilateral trade disputes and thus have both advisory and enforcement powers. True False 28. The decisions taken by the World Trade Organization in solving trade disputes among members are binding ones. True False 29. The World Bank was formed with the primary objective of overcoming inadequate monetary reserves and dealing with unstable currencies which were particularly vexing problems in global trade. True False Full file at https://TestBanksC 2-6 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 30. Since both SDRs and the U.S. dollar have lost their utility as the basic medium of financial exchange, most monetary statistics relate to gold rather than dollars. True False Multiple Choice Questions 31. After World War II, the United States led efforts like the Marshall Plan to assist in rebuilding Europe, financial and industrial development assistance to rebuild Japan, and funds channeled to foster economic growth in the underdeveloped world. These efforts were primarily aimed at: A. halting the growth of Nazi Germany. B. dampening the spread of communism. C. dissolving the colonial powers. D. building a stronger defense force. E. creating a worldwide trade bloc to counter the OPEC countries’ clout. 32. After World War II, the United States set out to infuse the ideal of capitalism throughout as much of the world as possible. The _____, aimed at assisting in rebuilding Europe, is the plan most closely associated with this endeavor. A. Eisenhower Plan B. Marshall Plan C. Bradley Plan D. Roosevelt Plan E. Truman Plan Full file at https://TestBanksC 2-7 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 33. What was the most apparent reciprocal impact of the foreign economic assistance given by the United States? A. European countries formed an alliance to counter the OPEC countries’ clout. B. European countries formed an alliance to counter the OPEC countries’ clout. C. All recipient countries appointed Americans to manage their central banks. D. Purchases of U.S. agricultural products, manufactured goods, and services by the recipient countries increased. E. Distribution of economic power and potential became more uneven. 34. Which of the following factors was primarily responsible for the excess production capacity in the U.S. in the first half of the twentieth century? A. Technological innovation revolutionized production during this time. B. Many firms from other nations shifted their production facilities to the U.S. C. Domestic demand was at a historic low and resulted in excess capacity. D. Swelling labor supply of returning military after World War II. E. Influx of migrant laborers from Europe and Japan. 35. Which of the following was the most significant move of the 1980s that contributed toward international cooperation among trading nations? A. Formation of the United Nations Development Programme. B. Creation of the United Nations. C. Establishment of the World Trade Organization. D. Signing of the Montreal Protocol. E. Negotiation of the General Agreement on Tariffs and Trade. Full file at https://TestBanksC 2-8 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 36. Which of the following acronyms refers to the international forum that was created for member countries to engage in the negotiation