67 test bank for global marketing management 5th edition kotabe

67 Test Bank for Global Marketing Management 5th
Edition Kotabe
Multiple Choice Questions - Page1
The Maastricht Treaty succeeded the:
1.

a. Treaty of Brussels.

2.

b. Treaty of Rome.

3.

c. Treaty of Geneva.

4.

d. Treaty of Paris.

5.

e. Treaty of Vienna.

A monetary union represents the ____________ level of integration
with a single common currency among politically independent
countries.
1.

a. first

2.

b. second

3.

c. third

4.

d. fourth

5.

e. fifth

The Maastricht Treaty is a(n):
1.

a. economic union.

2.

b. development union.

3.

c. transnational union.

4.

d. political union.

5.

e. national union.


Researchers have reported that multinationals have not been as
great a threat to countries’ national sovereignty because
multinationals have yet to solve the problem of:
1.

a. demand.

2.

b. size.

3.

c. war.

4.

d. religious conflict.

5.

e. language differences.

The primary difference between a common market and a customs
union is that the common market:
1.

a. adopts a common set of external tariffs on nonmembers.

2.

b. eliminates all tariffs.

3.

c. eliminates all trade barriers.

4.

5.

d. removes all restrictions on the flow of capital and labor among member
nations.
e. the number of countries involved.

The World Trade Organization (WTO) was created in the
_____________ of GATT talks---called the Uruguay Round.
1.

a. fifth round

2.

b. sixth round

3.

c. seventh round

4.

d. eighth round

5.

e. ninth round

The WTO Work Program on _____________________ is in the
process of defining the trade-related aspects of
___________________ that would fall under the parameters of
WTO mandates.


1.

a. business commerce

2.

b. electronic commerce

3.

c. equity commerce

4.

d. network commerce

5.

e. network commerce

When members of a free trade area add common external tariffs to
the provisions of the free trade agreement, the free trade area
becomes a:
1.

a. cartel.

2.

b. common market.

3.

c. monetary union.

4.

d. political union.

5.

e. customs union.

With respect to intellectual property rights, an example of an
information-related product is:
1.

a. computer hardware.

2.

b. an automobile.

3.

c. computer software.

4.

d. jewelry.

5.

e. a new drilling bit.

The last step of the possible integration forms is the:
1.

a. cartel.

2.

b. common market.

3.

c. monetary union.

4.

d. political union.


5.

e. customs union.

In December 1999, WTO launched what would have become the
beginning of a ___________ round of negotiations inaugurated in
Seattle, Washington.
1.

a. fifth

2.

b. sixth

3.

c. seventh

4.

d. eighth

5.

e. ninth

The World Trade Organization’s (WTO) ninth round of trade talks
which were launched in November 2001 is called:
1.

a. the Doha Round.

2.

b. the Seattle Round.

3.

c. the Geneva Round

4.

d. the New York Round.

5.

e. the London Round.

The new European currency, the euro, began its circulation in
January ________.
1.

a. 1998.

2.

b. 1999.

3.

c. 2000.

4.

d. 2001

5.

e. 2002.

One of the differences between WTO and GATT is that WTO’s
dispute settlement mechanism is:


1.

a. inferior.

2.

b. faster and more automatic.

3.

c. very limited.

4.

d. controlled by the World Bank.

5.

e. controlled by the negotiation section of the United Nations.

MNCs that become global at their first inception are called:
1.

a. born last firms.

2.

b. born first firms.

3.

c. born again firms.

4.

d. born global firms.

5.

e. none of the above

____________________ are highly interested in putting strong
international intellectual property laws in place:
1.

a. Developing nations

2.

b. Developed nations

3.

c. Asian countries

4.

d. European countries

5.

e. African countries

The effect of a monetary union is that members:
1.

a. can buy goods from one another.

2.

b. refuse to buy goods from nonmembers.

3.

c. switch to a common currency and a central bank.

4.

d. give up all sovereignty.

5.

e. no longer recognize national boundaries.


One hurdle that used to protect information from being acquired
easily was that it was unfungible. Unfungible means:
1.

a. information contained viruses.

2.

b. information was expensive.

3.

c. information could only be processed with proper equipment.

4.

d. information was not for the uninformed.

5.

e. it was difficult to replace one item with another.

Which of the following is an example of an international trading
bloc?
1.

a. World Trade Organization.

2.

b. GATT.

3.

c. the World Court in the Hague.

4.

d. NAFTA.

5.

e. United Nations

The World Trade Organization (WTO) took effect on:
1.

a. January 1, 1994

2.

b. January 1, 1995

3.

c. January 1, 1996

4.

d. January 1, 1997

5.

e. January 1, 1998

The Free Trade Areas of the Americas (FTAA) was proposed in

__________________.
1.

a. December 1994.

2.

b. December 1995.

3.

c. December 1996.


4.

d. December 1997.

5.

e. December 1998.

UNCITRAL stands for:
1.

a. United Nations Commission on International Trade Law.

2.

b. United Nations Commission on International Trade Limits.

3.

c. United Nations Commission on International Technical Law.

4.

d. United Nations Commission on International Technical Trade.

5.

e. None of the above.

A ___________________ is a formal agreement among two or
more countries to reduce or eliminate customs duties and nontariff
trade barriers among partner countries.
1.

a. trade union

2.

b. regional cooperative

3.

c. customs union

4.

d. common market

5.

e. free trade area

A ________________ eliminates all tariffs and barriers to trade
among members, adopts a common set of external tariffs on
nonmembers, and removes all restrictions on the flow of capital and
labor among member nations.
1.

a. regional market

2.

b. common market

3.

c. monetary market

4.

d. political market

5.

e. customs market

An example of a free trade area would be:
1.

a. the European Union.

2.

b. the Soviet Union.

3.

c. the United Kingdom.

4.

d. NAFTA.

5.

e. the United Nations.

The sovereignty of _______________ will perhaps continue to
weaken due to multinationals and the increasing integration of
economies.
1.

a. cities

2.

b. nations

3.

c. regions

4.

d. trading blocs

5.

e. none of the above

An evolving trend in international economic activity is the formation
of:
1.

a. multinational advertising agencies.

2.

b. multinational insurance agencies.

3.

c. multinational trading blocs.

4.

d. multinational purchasing agencies.

5.

e. multinational courts.

The universal reason for forming trading blocs is to:
1.

a. bypass tariff restrictions.

2.

b. bypass legal restrictions.

3.

c. bypass government controls.


4.

d. ensure the economic growth and benefit of the participating countries.

5.

e. make competition suffer.

Doha’s Development Agenda (Doha Round) includes new trade

talks—an actions program to resolve developing countries’
complaints about the implementation of Uruguay Round
agreements, and an accord on ____________________________.
1.

a. Trade Related Aspects of Intellectual Property Rights

2.

b. Services Related Aspects of Intellectual Property Rights

3.

c. Regional Related Aspects of Intellectual Property Rights

4.

d. Local Related Aspects of Intellectual Property Rights

5.

e. National Related Aspects of Intellectual Property Rights

The U.S. government defines the multinational company for
statistical purposes as a company that owns or controls
______________ or more of the voting securities, or the equivalent,
of at least one foreign business enterprise.
1.

a. five percent

2.

b. ten percent

3.

c. fifteen percent

4.

d. twenty percent

5.

e. twenty-five percent

Perhaps the most important accomplishment of the latest GATT
round was the establishment of:
1.

a. the World Trade Organization (WTO).

2.

b. the Asian Development Bank.

3.

c. the World Bank.

4.

d. the International Monetary Fund (IMF).


5.

e. the International Finance Corp. (IFC).

As of February 28, 2009, the World Trade Organization (WTO) has
_________ member countries.
1.

a. 123

2.

b. 135

3.

c. 142

4.

d. 153

5.

e. 160

One difference between a customs union and a free trade area is
that the customs union:
1.

a. adds external tariffs to nonmember countries.

2.

b. adds higher taxes to its consumers.

3.

c. refuses to import from nonmember nations.

4.

d. demands that a common currency be used among members.

5.

e. requires that member countries align themselves politically.

One way around having your intellectual property copied (such as
software) because of easy access is to sell:
1.

a. demos.

2.

b. to new markets.

3.

c. to governments.

4.

d. upgrades or ancillary products.

5.

e. only to a chosen few.

NAFTA is the free trade area among the United States, Mexico, and
______________.
1.

a. Canada


2.

b. Argentina

3.

c. Panama

4.

d. Columbia

5.

e. Brazil

The principle goal of a political union is that it:
1.

a. can buy goods from one another.

2.

b. can refuse to buy goods from nonmembers.

3.

c. can switch to a common currency and a central bank.

4.

d. gives up all sovereignty among individual members.

5.

e. no longer recognizes national boundaries.

67 Free Test Bank for Global Marketing Management
5th Edition Kotabe Multiple Choice Questions - Page 2
The main operating principle of the General Agreements of Tariffs
and Trade (GATT) was the concept of normal trade relations (NTR)
status, formerly known as:
1.

a. Early Favored Nation status.

2.

b. Most Favored Nation status.

3.

c. Late Favored Nation status.

4.

d. the World Trade status.

5.

e. the Best Nation status.

Future trade flows are likely to move how?
1.

a. Among the Triad nations

2.

b. Between the Triad nations and the BEMs

3.

c. Among the BEMs

4.

d. Between the Triad nations and the developing world


5.

e. None of the above

Which country consistently achieves the highest growth rates in
GDP?
1.

a. United States

2.

b. Germany

3.

c. Japan

4.

d. Vietnam

5.

e. China

Which nation is the world’s largest exporter?
1.

a. United States

2.

b. China

3.

c. Netherlands

4.

d. Germany

5.

e. Japan

The ________________ volume of international trade in currencies
exceeds the annual value of the trade in goods and services.
1.

a. daily

2.

b. weekly

3.

c. monthly

4.

d. annual

5.

e. none of the above

The International Trade Organization (ITO) was formed after:
1.

a. World War I.

2.

b. World War II.

3.

c. the Korean war.

4.

d. the Vietnam war

5.

e. None of the above.

Which country has shown the most progress in competitiveness
since 2005?
1.

a. Hong Kong

2.

b. Belgium

3.

c. Germany

4.

d. Switzerland

5.

e. Japan

According to the textbook, Japan was expected to be ranked
number _______ on the 2005 Country Innovativeness Ranking.
1.

a. one

2.

b. two

3.

c. three

4.

d. four

5.

e. five

Which of the following countries is not considered to be a big
emerging market?

1.

a. Mexico

2.

b. Brazil

3.

c. Russia

4.

d. India

5.

e. China

Global economy is becoming more ____________________.


1.

a. regional.

2.

b. local.

3.

c. isolated.

4.

d. transnational.

5.

e. intertwined.

Why did Nokia lose market share in China?
1.

a. Products were outdated

2.

b. Products were too technical

3.

c. Local producers appeared with a cheaper, adequate phone

4.

d. Japan took away their market share

5.

e. None of the above

Country competitiveness is not a _____________ thing.
1.

a. fixed

2.

b. moving

3.

c. temporary

4.

d. dynamic

5.

e. none of the above

Trading in foreign currencies has an effect on world trade. For
example, a rise in the value of the local currency due to daily flows
vis-à-vis other currencies makes exports:
1.

a. less expensive.

2.

b. more expensive.

3.

c. come under government control.

4.

d. parallel with imports.


5.

e. be banned.

__________________ refers to investment in foreign countries that
are withdrawable at short notice (such as investment in foreign
stocks and bonds).
1.

a. Direct investment

2.

b. Economic investment

3.

c. International investment

4.

d. Demand investment

5.

e. Portfolio investment

An example of portfolio investment (or indirect investment) in
foreign markets is:
1.

a. production facilities.

2.

b. computers.

3.

c. stocks and bonds.

4.

d. buildings.

5.

e. manufacturing facilities.

In 2004, the global annual trade in goods and services amounted to
$____________.
1.

a. $500 billion.

2.

b. $800 billion.

3.

c. $1 trillion.

4.

d. $8 trillion.

5.

e. $11 trillion.

With which country does the U.S. have the largest trade deficit?
1.

a. Germany

2.

b. Japan

3.

c. Canada

4.

d. India

5.

e. China

When GATT was successful in lowering tariff barriers to world
trade, many nations created:
1.

a. cartels.

2.

b. keiretsus.

3.

c. joint ventures.

4.

d. nontariff barriers.

5.

e. boycotts.

The World Economic Forum’s Global Competitiveness Report
placed two Asian Tigers (Taiwan and Singapore) among the world’s
top ______ economies (along with the Finland, United States,
Sweden, Denmark, Iceland, witzerland, Norway, and Australia).
1.

a. five

2.

b. ten

3.

c. twenty

4.

d. twenty-five

5.

e. thirty

Which of the following countries is NOT on the list of top 10
exporters?
1.

a. Korea

2.

b. Mexico

3.

c. China

4.

d. United States


5.

e. Both a and b

Triad regions of the world include:
1.

a. North America, Western Europe and Africa

2.

b. North America, Western Europe and Japan

3.

c. North America, Western Europe and Asia

4.

d. North America, Western Europe and South America

5.

e. North America, Western Europe and China

China’s average growth rate in GDP has been over:
1.

a. 2 percent

2.

b. 4 percent

3.

c. 6 percent

4.

d. 8 percent

5.

e. 9 percent

The United States was ranked number _______ on the 2005
Country Innovativeness Ranking.
1.

a. one

2.

b. two

3.

c. four

4.

d. five

5.

e. six

When firms invest in manufacturing and distribution facilities outside
their home countries, they add the stock of
_________________________________.
1.

a. global direct investment.

2.

b. regional direct investment.


3.

c. local direct investment.

4.

d. foreign direct investment (FDI).

5.

e. none of the above.

India’s average growth rate in GDP has been over:
1.

a. 3 percent

2.

b. 5 percent

3.

c. 7 percent

4.

d. 9 percent

5.

e. 10 percent

The World Trade Organization was created in the eighth round of
the GATT talks – called the ________________________ that
lasted from 1986 to 1994.
1.

a. Brussels Round

2.

b. Paris Round

3.

c. Morocco Round

4.

d. Paraguay Round

5.

e. none of the above

New centers of innovative activity include which countries?
1.

a. Ireland

2.

b. Israel

3.

c. Singapore

4.

d. Taiwan

5.

e. All of the above

In general, the larger the country’s domestic economy, the less
dependent it tends to be on exports and imports relative to its
________________.
1.

a. gross domestic product (GDP).

2.

b. gross domestic income.

3.

c. gross domestic spending.

4.

d. gross domestic capital.

5.

e. global domestic knowledge.

Which of the top 10 countries in competitiveness does NOT suffer
from a lack of natural resources?
1.

a. Japan

2.

b. Netherlands

3.

c. Switzerland

4.

d. Denmark

5.

e. Canada

BEMs stand for:
1.

a. Big Electronic Markets

2.

b. Big Efficient Market

3.

c. Big Effective Markets

4.

d. Big Emerging Markets

5.

e. None of the above

In the country competitiveness report in 2008/09, three of the top
ten countries are from _________________ countries.
1.

a. South American

2.

b. African


3.

c. Asian

4.

d. Nordic

5.

e. None of the