Which of the following is not a typical reason for neighboring nations to form regional trade groups?

Guaranteed higher wages for all member country workers.

Short travel distances for goods.

Common histories and interests.

A "Customs Union" is a form of economic integration that combines the features of a Free Trade Agreement with what additional element?

A shared central bank and common currency.

What is a key characteristic of a "Common Market" that distinguishes it from a "Customs Union"?

It allows for the free mobility of production factors like labor and capital.

It eliminates all internal tariffs.

It establishes common external tariffs.

It focuses solely on trade in services, not goods

Which of the following is a noted challenge for regional economic integration in Africa?

A large number of countries and various trade blocs.

The abundance of intrazonal trade agreements.

Reliance on trade with other African nations.

Consistent political identities across the continent.

The World Trade Organization (WTO) aims to reduce barriers to trade in goods, services, and investment. How does regional integration potentially support this objective?

By allowing for the liberalization of issues not covered by the WTO.

By creating new trade barriers that the WTO can then address.

By imposing stricter regulations on member countries.

By diverting trade away from non-member countries

What is a "dynamic effect" of regional economic integration?

Overall growth in the market and a company's ability to achieve greater economies of scale.

The immediate reduction of tariffs between member countries.

The imposition of new non-tariff barriers

The North American Free Trade Agreement (NAFTA) is identified as a good example of "trade diversion" because:

It led to companies shifting manufacturing facilities to Mexico from other low-cost labor regions outside the agreement.

It significantly increased trade with Asian countries for its members.

It eliminated all tariffs on bilateral trade between the US and Canada.

It focused on common external tariffs for all members

What was a primary motivation for the formation of various collaborative groups in Latin America after World War II, such as CARICOM and Mercosur?

To achieve economies of scale by enlarging potential market size.

To implement import substitution strategies to address balance-of-payments problems.

To reduce reliance on former colonial powers for trade.

To standardize legal systems across the region

The ASEAN Free Trade Area (AFTA) has been successful in its objectives, primarily due to:

Reducing tariffs and attracting foreign direct investment, turning the region into a production network.

Establishing a common currency for all member nations.

Focusing solely on trade in services, not goods.

Imposing strict non-tariff barriers on non-member countries

What is a key function of the United Nations Conference on Trade and Development (UNCTAD)?

To integrate developing countries into the global economy.

To promote military cooperation among developing nations.

To regulate international commodity prices.

To enforce human rights standards globally.

Commodity agreements, such as those for coffee or petroleum, primarily aim to:

Facilitate discussion, disseminate information, and improve product safety.

Dictate prices through market-interfering mechanisms.

Promote monopolistic practices among producers.

Encourage countries to switch from commodity production to manufacturing

A significant challenge for the European Union (EU), as highlighted by recent events like Brexit, is:

Managing the broad diversity of political, cultural, and language forces among its members.

The lack of common history and cultural similarities among members.

The inability to establish a common currency.

Despite various regional trade groups in Africa, why does significant intrazonal trade remain limited?

African nations primarily rely on exporting commodities to developed countries.

Most African countries produce a wide variety of goods for intra-regional trade.

The lack of political identity across the continent prevents trade.

Most trade agreements in Africa are customs unions, not free trade areas.

The 'rules of origin' in trade agreements like NAFTA are crucial for:

Ensuring that only goods with substantial economic activity within the free trade area are eligible for liberal tariff conditions.

Determining the exact tariffs to be applied to goods from non-member countries.

Preventing member countries from engaging in bilateral trade agreements with non-members.

Standardizing product safety regulations across the region

How does the concept of 'sovereignty' become potentially compromised as economic integration progresses from a Free Trade Agreement (FTA) to a Common Market and beyond, as seen in the EU?

Countries are willing to cede some national control over policies (like monetary or labor mobility) to a larger community for economic benefits.

Member countries gain more control over their domestic economies.

National governments are forced to implement uniform tax codes.

External tariffs become irrelevant, enhancing national control over trade

A key distinction between the European Union (EU) and other regional trade blocs like NAFTA, particularly from a trade perspective, is that the EU:

Has gone far beyond trade, establishing a common currency, central bank, and extensive bureaucracy, signifying deeper integration.

Only involves tariff reductions, similar to a basic Free Trade Agreement.

Limits the free movement of labor and capital among member countries.

Experiences lower intrazonal trade compared to other regional groups due to its size

While the WTO aims for global trade liberalization, regional economic integration can still be beneficial for developing countries by:

Providing flexibility and locking in liberalization among fewer countries with similar conditions, potentially accelerating development.

Directly challenging the WTO's authority.

Forcing them to adopt protectionist measures that limit competition.

Enabling them to completely forgo trade with high-income countries

The Unilever case study regarding its operations in Southeast Asia highlights challenges despite regional integration efforts. Which of the following is not explicitly mentioned as a significant hurdle for full economic integration in the region?

Political instability and ongoing military conflicts between member states.

High levels of protectionism and non-tariff barriers.

Complexity and costs of implementing regional trade agreements for Small and Medium Enterprises (SMEs).

Lack of adequate infrastructure and significant diversity in consumer purchasing power

The concept of 'trade creation' in regional integration implies that:

Production shifts to more efficient producers within the bloc, leading to lower prices and more goods for consumers.

Member countries will exclusively trade with each other.

New products are invented specifically for the integrated market.

Countries outside the bloc benefit directly from reduced trade barriers.

If a country is part of a Free Trade Agreement but not a Customs Union, why might a product entering that country from a non-member, and then shipped to another member, still be subject to duties?

Each member country in an FTA maintains its own external tariffs.

The FTA mandates higher duties on all external trade.

The rules of origin would not apply to internal bloc trade.

Only goods produced entirely within the FTA are exempt from duties

The initial establishment of the European Economic Community (EEC) and its subsequent evolution into the European Union (EU) was largely driven by a realization that:

Greater cooperation among European countries would accelerate economic recovery and stability.

Individual national recovery after World War II could only be achieved through isolationist policies.

A common currency was essential from the very beginning of the integration process.

Regional agreements should solely focus on political, not economic, integration

The 'elephant in the room' regarding regional economic integration in Asia, despite the efforts of ASEAN and AFTA, is:

The significant influence of China and Japan as major players outside the direct ASEAN/AFTA membership.

The dominance of Japanese trade and investment in the region.

The complete absence of any trade agreements with countries in the Americas.

The lack of a common language across the diverse Asian nations

What is the goal of the 'zero defects' concept in quality management?

To accept a certain level of defects that are managed later

How does supply chain management differ from operations management?

Supply chain management is external, while operations management is internal.

Supply chain management is internal, while operations management is external.

Supply chain management focuses on finance, while operations management focuses on marketing.

They are synonyms and refer to the same activities.

What is a primary reason for manufacturers like Apple to set up manufacturing facilities in countries like China?

To focus on firm-specific assets like innovation and marketing

To achieve vertical integration of all processes

To simplify the supply chain by using only local suppliers

To eliminate the need for operations management

Regional manufacturing configurations are often favored when:

Markets are segmented and require local responsiveness.

Manufacturing costs are uniform globally.

Transportation costs are low and markets are similar.

Vertical integration is the primary strategy.

What is a significant challenge when using suppliers located in different countries, even if they offer lower costs?

Potential for increased intellectual property transfer to competitors

Increased control over production processes

Simplified logistics and supply chain management

Guaranteed quality standards across all suppliers

How does the Just-in-Time (JIT) inventory management approach relate to a company's relationship with its suppliers?

It relies on suppliers to deliver materials just as they are needed in production.

It requires large stockpiles of inventory from many suppliers.

It eliminates the need for close relationships with suppliers.

It encourages sourcing only from domestic suppliers.

What is a primary purpose of global sourcing?

To acquire ingredients, parts, or services from various international suppliers

To centralize all production activities in the home country

To eliminate the need for quality management

To prevent suppliers from becoming competitors

What role does Enterprise Resource Planning (ERP) typically play in global supply chain management?

It is a computerized system for managing internal operations across different functions.

It is primarily used for marketing and sales forecasting.

It labels products with electronic tags for tracking.

It arranges transportation and logistics for shipments.

How might vertical integration impact a company's supply chain strategy?

It brings more parts of the value chain internal to the company.

It increases reliance on external suppliers.

It moves away from controlling more elements of the value chain.

It restricts operations to only domestic markets

The Dodd-Frank Act requires MNEs to disclose the use of 'conflict minerals' sourced from certain regions, primarily in Africa. What is a key challenge for MNEs in complying with this?

Verifying the country of origin through long supply lines is difficult.

The minerals are not used in modern electronics.

The act only applies to domestic companies.

Suppliers provide complete transparency automatically.

Why might a company choose a regional manufacturing configuration over a centralized one?

To minimize transportation costs to diverse markets.

To maximize scale economies in a single location.

To simplify supply chain management.

To reduce overall labor costs globally

Quality standards like ISO 9000 are important for global supply chain management because:

They provide a universal framework for quality assurance and consistency.

They are only required for domestic operations.

They guarantee zero defects in all products.

They eliminate the need for supplier evaluation

unit 7,12,18 ,cq

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The creation of new trade routes between member countries.

The removal of all trade barriers globally.

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