kotler_chapter19
Chapter 19 The Global Marketplace
1) ________ industries are safe from foreign competition.
A) Most
B) Major
C) Few
D) NAFTA
E) European Union
Answer: C
Diff: 2 Page Ref: 555
Skill: Concept
Objective: 19-1
2) As global trade is growing, global competition is ________.
A) leveling off
B) declining
C) erratic
D) intensifying
E) threatening
Answer: D
Diff: 1 Page Ref: 555
Skill: Concept
Objective: 19-1
3) Firms that play it safe and do not enter the global market are likely to lose their chances to enter other markets ________.
A) but achieve more stability at home
B) but gain a competitive edge in their home markets
C) but successfully shield themselves from foreign competition
D) and risk losing their home markets
E) A and B
Answer: D
Diff: 2 Page Ref: 555
Skill: Concept
Objective: 19-1
4) A ________ is one that, by operating in more than one country, contains marketing, production, research and development, and financial advantages that are not available to purely domestic competitors.
A) global firm
B) global industry
C) whole-channel view
D) direct investment
E) free trade zone
Answer: A
Diff: 1 Page Ref: 555
Skill: Concept
Objective: 19-1
5) All of the following are major decisions a company faces in international marketing EXCEPT?
A) deciding which markets to enter
B) deciding how to enter the market
C) deciding how to set standardized prices
D) deciding on the global marketing program
E) looking at the global marketing environment
Answer: C
Diff: 2 Page Ref: 556
AACSB: Analytic Skills
Skill: Concept
Objective: 19-1
6) A(n) ________ is a tax levied by a foreign government against certain imported products.
A) embargo
B) tariff
C) export
D) exchange control
E) quota
Answer: B
Diff: 1 Page Ref: 556
Skill: Concept
Objective: 19-1
7) A(n) ________ is a limit on the amount of goods that an importing country will accept in certain product categories.
A) embargo
B) tariff
C) benchmark
D) quota
E) exchange control
Answer: D
Diff: 1 Page Ref: 556
Skill: Concept
Objective: 19-1
8) A(n) ________ serves to limit the amount of foreign exchange and the exchange rate against other currencies.
A) trade system
B) tariff
C) quota
D) exchange control
E) nontariff trade barrier
Answer: D
Diff: 2 Page Ref: 556
Skill: Concept
Objective: 19-1
9) Bias against bids made by American companies is an example of a(n) ________.
A) quota
B) tariff
C) boycott
D) nontariff trade barrier
E) exchange control
Answer: D
Diff: 3 Page Ref: 556
AACSB: Reflective Thinking
Skill: Concept
Objective: 19-1
10) U.S. foreign policy makers have criticized China for protectionist regulations and other actions that restrict access to several Chinese markets, including banking services. This is an example of a(an) ________.
A) nontariff trade barrier
B) tariff
C) boycott
D) exchange control
E) quota
Answer: A
Diff: 3 Page Ref: 556
AACSB: Analytic Skills
Skill: Application
Objective: 19-1
11) Which of the following is designed to help foster trade between nations?
A) tariffs
B) GATT
C) exchange controls
D) quotas
E) nontariff trade barriers
Answer: B
Diff: 1 Page Ref: 556
Skill: Concept
Objective: 19-1
12) The ________ is a 60-year-old treaty designed to promote world trade by reducing tariffs and other international trade barriers.
A) WTO
B) GATT
C) EU
D) CAN
E) NAFTA
Answer: B
Diff: 2 Page Ref: 557
Skill: Concept
Objective: 19-1
13) Concluding in 1994, the Uruguay Round reduced trade barriers, set international standards for trade, and established the ________ to enforce GATT rules.
A) WTO
B) EU
C) NAFTA
D) CAFTA
E) CAN
Answer: B
Diff: 2 Page Ref: 557
Skill: Concept
Objective: 19-1
14) Which of the following reduced the world's merchandise tariffs by 30 percent, toughened international protection of copyrights and trademarks, and has been extended to cover trade in agriculture and a wide range of services?
A) GATT
B) EU
C) NAFTA
D) CAFTA
E) FTAA
Answer: A
Diff: 2 Page Ref: 557
AACSB: Ethical Reasoning
Skill: Concept
Objective: 19-1
15) Economic communities are also known as ________.
A) global firms
B) free trade zones
C) management communities
D) production communities
E) open channels
Answer: B
Diff: 1 Page Ref: 557
Skill: Concept
Objective: 19-1
16) ________ is a group of nations organized to work toward common goals in the regulation of international trade.
A) A joint venture
B) A standardized marketing mix
C) An economic community
D) A global firm
E) A multinational enterprise
Answer: C
Diff: 1 Page Ref: 557
Skill: Concept
Objective: 19-1
17) Formed in 1957, the ________ set out to create a single European market by reducing barriers to the free flow of products, services, finances, and labor among member countries and developing policies on trade with nonmember nations.
A) Uruguay Round
B) European Union
C) European Organization
D) NAFTA
E) CAFTA
Answer: B
Diff: 1 Page Ref: 557
Skill: Concept
Objective: 19-1
18) The European Union and NAFTA (North American Free Trade Agreement) are examples of ________.
A) non-barrier zones
B) open economic areas
C) economic communities
D) barter organizations
E) world trade organizations
Answer: C
Diff: 1 Page Ref: 557-558
AACSB: Reflective Thinking
Skill: Concept
Objective: 19-1
19) Which of the following is true regarding economic communities?
A) Trade barriers have increased between the United States and Mexico since NAFTA was created.
B) Tariffs are typically lower or nonexistent between countries in the community.
C) NAFTA represents the world's single largest market.
D) Converting numerous currencies into the euro has been a failure.
E) CAFTA has been less successful than CAN.
Answer: B
Diff: 3 Page Ref: 558
AACSB: Analytic Skills
Skill: Concept
Objective: 19-1
20) There is concern that through the ________ lower barriers inside Europe will create only thicker outside walls.
A) European Union
B) Euro-Scandinavian Pact
C) Euro-American Union
D) Atlantic Free-Trade Area
E) General Agreement on Tariffs and Trade
Answer: A
Diff: 2 Page Ref: 557
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
21) Which of the following economic communities is responsible for the adoption of the euro?
A) NAFTA
B) European Union
C) Euro-American Union
D) CAFTA
E) WTO
Answer: B
Diff: 1 Page Ref: 557
Skill: Concept
Objective: 19-1
22) In January 1994, ________ established a free trade zone among the United States, Canada, and Mexico.
A) GATT
B) WTO
C) NAFTA
D) EU
E) CAFTA
Answer: C
Diff: 2 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
23) Trusted Wholesalers is a company that purchases products produced in Mexico and sells them to companies based in the United States and Canada. Management at Trusted Wholesalers would most likely be interested in becoming experts in the agreements made by ________.
A) EU
B) NAFTA
C) CAFTA
D) FTAA
E) Mercusor
Answer: B
Diff: 3 Page Ref: 558
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
24) In 2005, the ________ established a free trade zone between the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
A) CAFTA
B) FTAA
C) CAN
D) NAFTA
E) EU
Answer: A
Diff: 2 Page Ref: 558
Skill: Concept
Objective: 19-1
25) What is the name of the single agreement that created a market of 443 million people and will eliminate all trade barriers and investment restrictions among the United States, Mexico, and Canada?
A) GATT
B) WTO
C) NAFTA
D) CAN
E) EU
Answer: C
Diff: 2 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
26) Given the apparent success of NAFTA, talks have been underway since 1994 to establish a free trade zone called ________. This zone would include 34 countries stretching from the Bering Strait to Cape Horn.
A) CAFTA
B) WTO
C) FTAA
D) CAN
E) AATF
Answer: C
Diff: 3 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
27) Mercusor and CAN have agreed to unite, creating ________, which will make up the largest trading block after NAFTA and the European Union.
A) CAFTA
B) FTAA
C) Unasur
D) MCAN
E) GATT
Answer: C
Diff: 2 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
28) Trusted Wholesalers is a company that currently purchases products produced in Mexico and sells them to companies based in the United States and Canada. Trusted Wholesalers is considering whether to also purchase products produced in Costa Rica and the Dominican Republic. To make their decision, members of management at Trusted Wholesalers will most likely closely evaluate the agreements made by ________.
A) the EU
B) NAFTA
C) CAFTA
D) Mercosur
E) Unasur
Answer: C
Diff: 3 Page Ref: 558
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
29) All of the following are types of industrial structures EXCEPT?
A) subsistence economies
B) raw material exporting economies
C) developing economies
D) industrializing economies
E) industrial economies
Answer: C
Diff: 2 Page Ref: 558-559
Skill: Concept
Objective: 19-1
30) Much of Chile's revenues come from its tin and copper exports. Chile has a ________ economy.
A) subsistence
B) emerging
C) merchandise exporting
D) raw material exporting
E) industrializing
Answer: D
Diff: 1 Page Ref: 558
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
31) The two key economic factors reflecting a country's attractiveness as a market are its industrial structure and its ________.
A) communication adaptation
B) nontariff trade barriers
C) exchange controls
D) income distribution
E) transportation systems
Answer: D
Diff: 1 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
32) In a(n) ________, the vast majority of people engage in simple agriculture and consume most of their output.
A) raw material economy
B) subsistence economy
C) industrializing economy
D) emerging economy
E) industrial economy
Answer: B
Diff: 2 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
33) Very few market opportunities are available in a(n) ________ economy.
A) subsistence
B) raw material exporting
C) industrializing
D) emerging
E) industrial
Answer: A
Diff: 2 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
34) A(n) ________ economy is poor in some ways but rich in one or more natural resources responsible for creating most of its exporting revenue.
A) industrial
B) industrializing
C) raw-material exporting
D) subsistence
E) agrarian
Answer: C
Diff: 1 Page Ref: 558
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
35) ________ are major exporters of manufactured goods, services, and investment funds. They trade goods among themselves and export them to other types of economies for raw materials and semifinished goods.
A) Material economies
B) Subsistent economies
C) Industrializing economies
D) Industrial economies
E) Developing economy
Answer: D
Diff: 2 Page Ref: 559
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
36) In a(n) ________ economy, manufacturing accounts for 10 to 20 percent of the country's economy. This type of economy typically has a new rich class and a small but growing middle class, both demanding new types of imported goods.
A) industrial
B) industrializing
C) materials exporting
D) subsistence
E) agrarian
Answer: B
Diff: 2 Page Ref: 559
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
37) Industrializing economies do NOT include ________.
A) Egypt
B) India
C) Brazil
D) Sweden
E) any of the above
Answer: D
Diff: 3 Page Ref: 559
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
38) All of the following are political-legal factors that should be considered when deciding whether to do business in a given country EXCEPT?
A) attitudes toward international buying
B) government bureaucracy
C) if a state religion is enforced
D) monetary regulations
E) political stability
Answer: C
Diff: 2 Page Ref: 559
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
39) Countries with ________ economies may consist mostly of households with very low family incomes.
A) industrial
B) industrializing
C) service
D) technological
E) subsistence
Answer: E
Diff: 2 Page Ref: 559
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
40) India needs more imports of raw materials such as textiles, steel, and heavy machinery, and fewer imports of finished textiles, paper products, and automobiles. India is most likely a
________ economy.
A) subsistence
B) emerging
C) raw material exporting
D) agrarian
E) industrializing
Answer: E
Diff: 3 Page Ref: 559
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
41) In international trade, it is ideal if the buyer can pay in ________.
A) countertrade
B) the seller's currency
C) barter
D) buyback
E) counterpurchases
Answer: B
Diff: 2 Page Ref: 560
Skill: Concept
Objective: 19-1
42) Sellers might accept a ________, one whose removal from the country is restricted by the buyer's government, if they can buy other goods in that country that they need themselves or can sell elsewhere for a need currency.
A) blocked currency
B) counterpurchase
C) barter
D) buyback
E) tariff
Answer: A
Diff: 3 Page Ref: 560
Skill: Concept
Objective: 19-1
43) All of the following are methods of countertrade EXCEPT?
A) paying in the seller's currency without further obligation
B) bartering goods or services
C) counterpurchasing
D) compensation
E) buyback
Answer: A
Diff: 2 Page Ref: 560
Skill: Concept
Objective: 19-1
44) What type of countertrade occurs when a seller sells a plant, equipment, or technology to another country and agrees to take payment in the resulting products?
A) barter
B) counterpurchase
C) rebuy
D) buyback
E) trade
Answer: D
Diff: 2 Page Ref: 560
Skill: Concept
Objective: 19-1
45) Japan's Fukusuke Corporation sold knitting machines and raw textile materials to Shanghai clothing manufacturer Chinatex in exchange for finished textiles produced on the machines. This is an example of which form of countertrade?
A) barter
B) compensation
C) rebuy
D) counterpurchase
E) blocked
Answer: B
Diff: 3 Page Ref: 560
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
46) Azerbaijan imported wheat from Romania in exchange for crude oil and Vietnam exchanged rice for Philippine fertilizer and coconuts. Both scenarios are examples of which form of countertrade?
A) counterpurchase
B) compensation
C) buyback
D) blocked currency
E) barter
Answer: E
Diff: 3 Page Ref: 560
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
47) Daimler Chrysler agreed to sell 30 trucks to Romania in exchange for 150 Romanian jeeps, which it then sold to Ecuador for bananas, which were in turn sold to a German supermarket chain for German currency. What is this an example of?
A) joint venturing
B) product transportation
C) countertrading
D) adapted pay
E) global strategy
Answer: C
Diff: 2 Page Ref: 560
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
48) Which of the following is the most common form of countertrade?
A) barter
B) compensation
C) buyback
D) counterpurchase
E) blocked currency
Answer: D
Diff: 3 Page Ref: 560
Skill: Concept
Objective: 19-1
49) The form of countertrade in which the seller receives full payment in cash but agrees to spend some of the money in the other country is known as ________.
A) counterpurchasing
B) bartering
C) compensation
D) buyback
E) blocked currency
Answer: A
Diff: 1 Page Ref: 560
Skill: Concept
Objective: 19-1
50) When Boeing sells aircraft to India and agrees to buy Indian coffee, rice, and castor oil and to sell these products elsewhere, Boeing is engaging in ________.
A) joint venturing
B) barter
C) buyback
D) compensation
E) counterpurchasing
Answer: E
Diff: 2 Page Ref: 560
AACSB: Reflective Thinking
Skill: Application
Objective: 19-1
51) It is important to understand how business norms vary from county to country. For example, ________ like to sit or stand very close to each other when they talk business in fact, almost nose-to-nose.
A) Americans
B) Japanese
C) South Americans
D) Africans
E) Europeans
Answer: C
Diff: 2 Page Ref: 561
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
52) Some social critics say that globalization really means ________ the world's cultures.
A) Americanizing
B) modernizing
C) stabilizing
D) respecting
E) ignoring
Answer: A
Diff: 2 Page Ref: 562
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
53) Which type of business is LEAST likely to find it necessary to enter international markets in order to survive?
A) clothing manufacturers
B) food distributors
C) chain retailers
D) small, local businesses
E) automobile producers
Answer: D
Diff: 1 Page Ref: 563
AACSB: Analytic Skills
Skill: Concept
Objective: 19-1
54) Which of the following is a factor that is likely to push a company to decide NOT to enter international markets?
A) The company's home market is stagnant.
B) The company would have to redesign its products.
C) The company needs to counterattack international competitors in their home markets.
D) Foreign markets present higher profit opportunities.
E) Global competitors have offered similar products at lower prices.
Answer: B
Diff: 2 Page Ref: 564
AACSB: Analytic Skills
Skill: Concept
Objective: 19-1
55) Several of the following factors might draw a company into the international arena EXCEPT?
A) Global competitors might offer better products at lower prices domestically.
B) Domestic markets might be stagnant or shrinking.
C) Managers are unsure of the effect of regulations and the political environments of other countries.
D) The company's customers may be expanding abroad.
E) Foreign markets present higher profit opportunities.
Answer: C
Diff: 2 Page Ref: 564
AACSB: Analytic Skills
Skill: Concept
Objective: 19-1
56) Of the following, which is the LEAST critical decision a company should make before going abroad?
A) what its international marketing objectives and policies are
B) what volume of foreign sales it wants
C) how many countries it wants to market in
D) how many people it wants to employ
E) what types of countries it wants to market in
Answer: D
Diff: 2 Page Ref: 564
Skill: Concept
Objective: 19-1
57) Demographic characteristics, geographic characteristics, economic factors, sociocultural factors, and political and legal factors all help a company ________.
A) determine a market's potential
B) determine a country's degree of globalization
C) evaluate its marketing objectives
D) evaluate its value delivery network
E) identify potential joint ventures
Answer: A
Diff: 2 Page Ref: 565
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
58) Which of the following is a sociocultural factor that a company should consider before deciding to enter an international market?
A) political stability
B) population density
C) education
D) income distribution
E) consumer lifestyles, beliefs, and values
Answer: E
Diff: 3 Page Ref: 565
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
59) Which of the following is a political and legal factor that a company should consider before deciding to enter an international market?
A) monetary and trade regulations
B) transportation structure
C) population size and growth
D) industrial infrastructure
E) business norms and approaches
Answer: A
Diff: 3 Page Ref: 565
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1
60) Which of the following is an economic factor that a company should consider before deciding to enter and international market?
A) population size and growth
B) natural resources
C) cultural and social norms
D) political stability
E) climate
Answer: B
Diff: 3 Page Ref: 565
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 19-1