1. The following represents main benefits which could motivate countries to economically integrate

regionally:

a. regional economic integration links countries together

b. regional economic integration reduces the likelihood of political conflicts between

countries

c. regional economic integration is an attempt to exploit the gains from free trade and

investment

d. all of the above

2. Trade intensity rate refers to:

a. The percentage of total trade to total debt of a country.

b. The percentage of total exports to total output of a country.

c. The percentage of total trade in goods to total trade in services.

d. None of the above.

3. A customs union is characterized by the following between its members:

a. Free flow of products and factors of production, a common external trade policy, a

common currency, a harmonized tax rate, and a common monetary and fiscal policy

b. No trade barriers in the face of free movements of goods and services only.

c. Free flow of products and factors of production and common monetary and fiscal policy.

d. None of the above.

4. Mercantilists supported trade to achieve:

a. Comparative advantages

b. Global coordination

c. Balance-of-trade surplus

d. Win-win situation.

5. Greenfield investment could be a preferred mode than acquisitions in host markets especially

when:

a. There exist well-established incumbent players.

b. There is a potential for strategic alliance.

c. The demand is stable.

d. There is a need to control technology management.

6. The following represent benefits of centralization in global business management except:

a. a. More coordination

b. b. Decisions are consistent with firm's objectives.

c. c. Avoiding duplication of some activities that could happen when similar activities are

carried by various subunits within the organization

d. d. Staff acting independently

7. Pioneering costs include:

a. Capital costs.

b. Marketing costs

c. Educating Customers' costs.

d. All the above

8. All of the following s

hape/affect the foreign exchange rate of a country:

a. Inflation.

b. Market psychology.

c. Interest rates.

d. All of the above.

9. In recent years, glbalization has been witnessing forces which shape its transitional phase. These

forces include:

e. Trade in services outweigh trade in goods.

f. Over half of all trade in many of value chains are in finished goods rather than in

intermediate goods.

g. Almost all global value chains are becoming more knowledge-intensive.

h. All of the above

10. The globalization of markets refers to the merging of historically distinct and separate national

markets into one huge global marketplace, where:

a. Firms sell customized products worldwide

b. Consumers' tastes and preferences are diverging.

c. National differences predominately prevail.

d. Falling trade barriers make it easier to sell globally