Pyq Ibm June2012 Apr2011
Content
April 2011 Question 2 Part B
a) Explain the following: (10 marks, chapter 9) *chapter 9=regional economic integration
i) The European Union (EU).
A group of European countries that participates in the world economy as one economic unit
and operates under one official currency, the euro. The EU's goal is to create a barrier-free
trade zone and to enhance economic wealth by creating more efficiency within their
marketplace.
The European Union is a group of countries whose governments work together. It's a bit like
a club. To join you have to agree to follow the rules and in return you get certain
benefits.Each country has to pay money to be a member. They mostly do this through
taxes.The EU uses the money to change the way people live and do business in
Europe.Countries join because they think that they will benefit from the changes the EU
makes.
The current formalized incarnation of the European Union was created in 1993 with 12 initial
members. Since then, many additional countries have since joined. The EU has become one
of the largest producers in the world, in terms of GDP, and the euro has maintained a
competitive value against the U.S. dollar. EU and non-EU members must agree to many
legal requirements in order to trade with the EU member states.
ii) The North America Free Trade Agreement (NAFTA).
In 1994, the North American Free Trade Agreement (NAFTA) came into effect, creating one
of the world’s largest free trade zones and laying the foundations for strong economic growth
and rising prosperity for Canada, the United States, and Mexico. Since then, NAFTA has
demonstrated how free trade increases wealth and competitiveness, delivering real benefits
to families, farmers, workers, manufacturers, and consumers.
Since NAFTA came into effect, trade and investment levels in North America have increased,
bringing strong economic growth, job creation, and better prices and selection in consumer
goods. North American businesses, consumers, families, workers, and farmers have all
benefited. NAFTA provides North American businesses with better access to materials,
technologies, investment capital, and talent available across North America
Each NAFTA country forgoes tariffs on imported goods “originating” in the other NAFTA
countries. Rules of origin enable customs officials to decide which goods qualify for this
preferential tariff treatment under NAFTA. The negotiators of the Agreement sought to make
the rules of origin very clear so as to provide certainty and predictability to producers,
exporters, and importers. They also sought to ensure that NAFTA’s benefits are not extended
to goods imported from non-NAFTA countries that have undergone only minimal processing
in North America.
b) Discuss two (2) advantages and two (2) disadvantages of regional trade agreement
(RTA). (10 marks, chapter 9)
Advantages
•
Market Access – members of REI gain access to markets of other members easily
•
Increased competition → firms become efficient to stay competitive & increased
competition induce firms outside REI to cut prices
•
Increased (Return On Investments) ROI – larger production base & wider consumer
base → firms to increase productivity → wider choice of goods and services to
consumers
•
Increased (Foreign Direct Investments) FDI – (Regional Economic Integration) REI
attracts FDI from member countries & non-member countries due to larger markets &
production Efficiency in production – increased specialization based on law of
comparative advantage.
•
Increase in market size – achieve high production levels - economies of scale.
•
Increase in bargaining power of member nations with non-participating nations – gain
better terms of trade, lower prices of imports from non-members & higher prices for
their exports.
•
Increased security – network of countries to build trust & reduce chances of war,
terrorism & conflict
Disadvantages
Lock of domestic reforms – REI allow government to implement welfare policies but
may be incompatible in the absence of REI e.g. remove trade barriers due to trade
shocks confiscation of foreign investment
Negotiation required high resources – REI agreements are retour intensive and
opportunity costs of devoting resource to regional as opposed to multilateral
agreements
Local firms face stiff competition especially import substitude due to removal of tariffs
June 2012 Question 5 Part B
a) Explain with an example, what is stereotype. (4 marks, chapter 2)
Stereotypes are characteristics ascribed to groups of people involving gender, race, national
origin and other factors. These characteristics tend to be oversimplifications of the groups
involved, however. For example, someone who meets a few individuals from a particular
country and finds them to be quiet and reserved may spread the word that all citizens from
the country in question are quiet and reserved.
A generalization such as this doesn’t allow for diversity within groups and may result in
stigmatization and discrimination of groups if the stereotypes linked to them are largely
negative. That said, even so-called positive stereotypes can be harmful due to their limiting
nature.
For example, a stereotype view from others races towards Malay is that, they said all Malays
are lazy, but the real reality is not all Malays are lazy, but actually the attitude of each others
are different from each other. There are some Chinese and Indians that are lazy too, even
more than Malay did.
b) Discuss four (4) reasons why cultural miscommunication happens.
(16 marks, chapter 2)
a) Different Values
Different cultures have different core beliefs and national traits. And this effects crosscultural communication and international business across the board through different:
Attitudes
Reactions
Expectations
b) Different Habits And Styles In Communication
Different styles in communication can be:
Direct and indirect communication – such as getting straight to business in your first
meeting or only after a shared meal.
Expected or conventional niceties – such as wishing happy new year to everyone you
meet for the first time between December 31st through January 31st
In speech – such as speaking loudly or not
Other actions while communicating – such as handshakes or kissing ladies on the
cheeks
c) Different Use Of Physical Space
Some cultures need to talk to each other at very different distances. People need more or
less physical space between themselves and anyone else.
When you first start meeting people from different cultures this can be comical to observe.
People take steps back and forth, naturally adjusting the space to what they are comfortable
with.
And if one of the two people is not at his usual distance from the other, this can effect the
whole conversation
d) Different Concepts Of Time
Cultural differences in conventions and how things should be done. There are differences of
what is usual, acceptable and polite… and what is not.
You need to adapt the length of your sales cycles to the local cultures.
In some cultures 7:00 am breakfast meetings and Friday meetings in late afternoon
are barbarian.
a) Explain the following: (10 marks, chapter 9) *chapter 9=regional economic integration
i) The European Union (EU).
A group of European countries that participates in the world economy as one economic unit
and operates under one official currency, the euro. The EU's goal is to create a barrier-free
trade zone and to enhance economic wealth by creating more efficiency within their
marketplace.
The European Union is a group of countries whose governments work together. It's a bit like
a club. To join you have to agree to follow the rules and in return you get certain
benefits.Each country has to pay money to be a member. They mostly do this through
taxes.The EU uses the money to change the way people live and do business in
Europe.Countries join because they think that they will benefit from the changes the EU
makes.
The current formalized incarnation of the European Union was created in 1993 with 12 initial
members. Since then, many additional countries have since joined. The EU has become one
of the largest producers in the world, in terms of GDP, and the euro has maintained a
competitive value against the U.S. dollar. EU and non-EU members must agree to many
legal requirements in order to trade with the EU member states.
ii) The North America Free Trade Agreement (NAFTA).
In 1994, the North American Free Trade Agreement (NAFTA) came into effect, creating one
of the world’s largest free trade zones and laying the foundations for strong economic growth
and rising prosperity for Canada, the United States, and Mexico. Since then, NAFTA has
demonstrated how free trade increases wealth and competitiveness, delivering real benefits
to families, farmers, workers, manufacturers, and consumers.
Since NAFTA came into effect, trade and investment levels in North America have increased,
bringing strong economic growth, job creation, and better prices and selection in consumer
goods. North American businesses, consumers, families, workers, and farmers have all
benefited. NAFTA provides North American businesses with better access to materials,
technologies, investment capital, and talent available across North America
Each NAFTA country forgoes tariffs on imported goods “originating” in the other NAFTA
countries. Rules of origin enable customs officials to decide which goods qualify for this
preferential tariff treatment under NAFTA. The negotiators of the Agreement sought to make
the rules of origin very clear so as to provide certainty and predictability to producers,
exporters, and importers. They also sought to ensure that NAFTA’s benefits are not extended
to goods imported from non-NAFTA countries that have undergone only minimal processing
in North America.
b) Discuss two (2) advantages and two (2) disadvantages of regional trade agreement
(RTA). (10 marks, chapter 9)
Advantages
•
Market Access – members of REI gain access to markets of other members easily
•
Increased competition → firms become efficient to stay competitive & increased
competition induce firms outside REI to cut prices
•
Increased (Return On Investments) ROI – larger production base & wider consumer
base → firms to increase productivity → wider choice of goods and services to
consumers
•
Increased (Foreign Direct Investments) FDI – (Regional Economic Integration) REI
attracts FDI from member countries & non-member countries due to larger markets &
production Efficiency in production – increased specialization based on law of
comparative advantage.
•
Increase in market size – achieve high production levels - economies of scale.
•
Increase in bargaining power of member nations with non-participating nations – gain
better terms of trade, lower prices of imports from non-members & higher prices for
their exports.
•
Increased security – network of countries to build trust & reduce chances of war,
terrorism & conflict
Disadvantages
Lock of domestic reforms – REI allow government to implement welfare policies but
may be incompatible in the absence of REI e.g. remove trade barriers due to trade
shocks confiscation of foreign investment
Negotiation required high resources – REI agreements are retour intensive and
opportunity costs of devoting resource to regional as opposed to multilateral
agreements
Local firms face stiff competition especially import substitude due to removal of tariffs
June 2012 Question 5 Part B
a) Explain with an example, what is stereotype. (4 marks, chapter 2)
Stereotypes are characteristics ascribed to groups of people involving gender, race, national
origin and other factors. These characteristics tend to be oversimplifications of the groups
involved, however. For example, someone who meets a few individuals from a particular
country and finds them to be quiet and reserved may spread the word that all citizens from
the country in question are quiet and reserved.
A generalization such as this doesn’t allow for diversity within groups and may result in
stigmatization and discrimination of groups if the stereotypes linked to them are largely
negative. That said, even so-called positive stereotypes can be harmful due to their limiting
nature.
For example, a stereotype view from others races towards Malay is that, they said all Malays
are lazy, but the real reality is not all Malays are lazy, but actually the attitude of each others
are different from each other. There are some Chinese and Indians that are lazy too, even
more than Malay did.
b) Discuss four (4) reasons why cultural miscommunication happens.
(16 marks, chapter 2)
a) Different Values
Different cultures have different core beliefs and national traits. And this effects crosscultural communication and international business across the board through different:
Attitudes
Reactions
Expectations
b) Different Habits And Styles In Communication
Different styles in communication can be:
Direct and indirect communication – such as getting straight to business in your first
meeting or only after a shared meal.
Expected or conventional niceties – such as wishing happy new year to everyone you
meet for the first time between December 31st through January 31st
In speech – such as speaking loudly or not
Other actions while communicating – such as handshakes or kissing ladies on the
cheeks
c) Different Use Of Physical Space
Some cultures need to talk to each other at very different distances. People need more or
less physical space between themselves and anyone else.
When you first start meeting people from different cultures this can be comical to observe.
People take steps back and forth, naturally adjusting the space to what they are comfortable
with.
And if one of the two people is not at his usual distance from the other, this can effect the
whole conversation
d) Different Concepts Of Time
Cultural differences in conventions and how things should be done. There are differences of
what is usual, acceptable and polite… and what is not.
You need to adapt the length of your sales cycles to the local cultures.
In some cultures 7:00 am breakfast meetings and Friday meetings in late afternoon
are barbarian.
