Regional Economic Grouping MCQs

Question. _______________ is an important reason for economic integration.
(a) Geographic proximity
(b) Democracy
(c) Totalitarianism
(d) Common law practice

Answer: A

Question. SAPTA is a trade agreement by _________________
(a) ASEAN Nations
(b) APEC Nations
(c) SAARC Nations
(d) EU Nations

Answer: C

Question. IPR stands for
(a) Intellectual property rights
(b) International property rights
(c) Internal promotion rights
(d) Interior promotional rights

Answer: A

Question. Neighboring countries tend to collaborate for all of the following reasons EXCEPT:
(a) the distance that goods need to travel between such countries is short
(b) neighboring countries tend to be in similar economic situations and therefore are able to better control currency exchange rates
(c) consumers’ tastes are likely to be similar, and distribution channels can be easily established in adjacent countries
(d) neighboring countries may have a common history and interests, and may be more willing to coordinate their policies

Answer: B

Question. Which of the following types of regional economic integration focuses only on eliminating internal tariffs?
(a) customs union
(b) common market
(c) complete economic integration
(d) free trade area

Answer: D

Question. In _______________, countries focus on eliminating internal tariffs among member countries, have a common external trading policy among non-members, allow free mobility of productions factors within member countries, and adopt common economic policies.
(a) free trade area
(b) customs union
(c) complete economic integration
(d) common market

Answer: C

Question. _______________ occurs when trade shifts to countries in the group at the expense of trade with countries not in the group, even though the nonmember country might be more efficient in the absence of trade barriers.
(a) Trade creation
(b) Divestment
(c) Retrenchment
(d) Trade diversion

Answer: D

Question. Multi-domestic firms extensive customize both their product offering and marketing strategy to suit domestic home market only.
(a) True
(b) False

Answer: B

Question. Which of the following is not the main purpose for formation of SAARC
(a) To Combat Terrorism
(b) To Promote the Welfare of the people of South Asia
(c) To form mutual defense against foreign aggression
(d) None of the options

Answer: C

Question. The main promoter of trade liberalization was
(a) GATT
(b) NAFTA
(c) CEPTA
(d) CISA

Answer: A

Question. What is the full form of ASEAN?
(a) Association of South East Asian Nations
(b) Administration of South East Asian Nations
(c) Administration of Southern Eastern Asian Nations
(d) Organisation of South East Asian Nations

Answer: A

Question. When one company acquires another, the one acquired becomes a subsidiary of the acquiring company.
(a) True
(b) False

Answer: A

Question. Firm that operates internationally is able to
(a) earn a greater return from their skills and core competencies
(b) realize location economies where they can be performed most efficiently
(c) realize greater experience curve economies, which reduces the cost of production
(d) All of the options

Answer: D

Question. Geographic proximity is an important reason for economic integration because consumer tastes are likely to be:
(a) different
(b) opposite
(c) similar
(d) strange

Answer: C

Question. The basic objective of export Promotion Council is to promote and develop the Exports of the
(a) Particular products of country
(b) Only attractive projects of the country
(c) Only services industry products of the country.
(d) Overall exports of the country.

Answer: D

Question. Which of the following was developed with the rationale that the U.S.-Canadian trade was the largest bilateral trade in the world and that the United States is Mexico’s and Canada’s largest trading partner?
(a) CEFTA (the Central European Free Trade Agreement)
(b) NAFTA (the North American Free Trade Agreement)
(c) ASEAN (Association of South East Asian Nations)
(d) EU (the European Union)

Answer: B

Question. Which of the following is an advantage of turnkey projects?
(a) Can earn a return on knowledge asset
(b) Will not create a competitor
(c) Tight control of operations
(d) All of the options

Answer: A

Question. Where is the headquarters of the EU?
(a) Belgium
(b) Netherlands
(c) Luxembourg
(d) Greece

Answer: A

Question. The European Union is a free trade association that is based on a(n)
(a) economic and monetary union.
(b) economic union.
(c) monetary union.
(d) a commonly agreed upon list of lowered tariffs.

Answer: A

Question. Where is the headquarters of the SAARC?
(a) Manila
(b) Kathmandu
(c) New Delhi
(d) Jakarta

Answer: B

Question. The term economies of scale refer to the reductions in cost achieved by producing a large volume of the product.
(a) True
(b) False

Answer: A

Question. Apart from India, Pakistan and Bangladesh who are the other member countries of SAARC?
(a) Nepal, Bhutan, Thailand and Singapore
(b) Nepal, Bhutan, Malaysia and Maldives
(c) Nepal, Bhutan, Maldives, Sri Lanka and Afghanistan
(d) None of the options

Answer: C

Question. Which one of the following has a single currency managed by a common central bank?
(a) ASEAN
(b) European Union
(c) World Trade Organization
(d) The Organization for Economic Cooperation and Development

Answer: B

Question. Which one of the following is renowned for its high-quality databases on economic and social data?
(a) WTO
(b) EU
(c) OECD
(d) World Bank

Answer: C

Question. A _______________ focuses on eliminating internal tariffs with member countries levying a common external tariff on goods being imported from nonmembers. Additionally, this type of regional economic integration allows free mobility of production factors such as labor and capital.
(a) free trade area
(b) common market
(c) customs union
(d) complete economic integration

Answer: B

Question. NAFTA is a good example of:
(a) trade erosion.
(b) divestment.
(c) retrenchment.
(d) trade diversion.

Answer: D

Question. _______________ occurs when production shifts to more efficient producers for reasons of comparative advantage, allowing consumers access to more goods at a lower price than would have been possible without integration.
(a) Trade diversion
(b) Divestment
(c) Trade creation
(d) Retrenchment

Answer: C

Question. NAFTA stands for
(a) North African trade association
(b) North American free trade agreement
(c) Northern Atlantic trade agreement
(d) Northern association for trade

Answer: B

Question. The country that attracts the largest FDI inflow is
(a) India
(b) China
(c) USA
(d) Brazil

Answer: B

Question. The _______________ is a political organization comprised of 185 countries, and it is headquartered in New York City. This organization deals with a variety of political issues, such as security and world peace, but it also deals in humanitarian and economic issues.
(a) World Trade Organization
(b) World Bank
(c) European Union
(d) United Nations

Answer: D

Question. NAFTA calls for all of the following EXCEPT:
(a) the harmonization of trade rules
(b) the liberalization of restrictions on services
(c) the implementation of a common currency
(d) the liberalization of restrictions on foreign investment

Answer: C

Question. In which of the following types of regional economic integration are internal tariffs eliminated with member countries levying a common external tariff on goods being imported from nonmembers.
(a) customs union
(b) free trade area
(c) common market
(d) complete economic integration

Answer: A