As the economic role of multinational, global corpora-
tions expands, the international economic environment will
be shaped increasingly not by governments or international
institutions, but by the interaction between governments
(5) and global corporations, especially in the United States,
Europe, and Japan. A significant factor in this shifting
world economy is the trend toward regional trading biocs
of nations, which has a potentially large effect on the
evolution of the world trading system. Two examples of
(10) this trend are the United States-Canada Free Trade
Agreement (FTA) and Europe 1992, the move by the
European Community (EC) to dismantle impediments to
the free flow of goods, services, capital, and labor among
member states by the end of 1992. However, although
(15) numerous political and economic factors were operative in
launching the move to integrate the EC’s markets, concern
about protectionism within the EC does not appear to have
been a major consideration. This is in sharp contrast to the
FTA, the overwhelming reason for that bilateral initiative
(20) was fear of increasing United States protectionism. None-
theless, although markedly different in origin and nature,
both regional developments are highly significant in that
they will foster integration in the two largest and richest
markets of the world, as well as provoke questions
(25) about the future direction of the world trading system.
1. The primary purpose of the passage as a whole is to
(A) describe an initiative and propose its continuance
(B) chronicle a development and illustrate its
inconsistencies
(C) identify a trend and suggest its importance
(D) summarize a process and question its significance
(E) report a phenomenon and outline its probable future
2. According to the passage, all of the following are
elements of the shifting world economy EXCEPT
(A) an alteration in the role played by governments
(B) an increase in interaction between national
governments and international regulatory institutions
(C) an increase in the formation of multinational trading
alliances
(D) an increase in integration in the two richest markets
of the world
(E) a fear of increasing United States protectionism
3. The passage suggests which of the following about
global corporations?
(A) Their continued growth depends on the existence of
a fully integrated international market.
(B) Their potential effect on the world market is a matter
of ongoing concern to international institutions.
(C) They will have to assume quasi-governmental
functions if current economic trends continue.
(D) They have provided a model of economic success
for regional trading blocs.
(E) Their influence on world economics will continue to
increase
4. According to the passage, one similarity between the
FTA and Europe 1992 is that they both
(A) overcame concerns about the role of politics in the
shifting world economy
(B) originated out of concern over unfair trade practices
by other nations
(C) exemplify a trend toward regionalization of
commercial markets.
(D) place the economic needs of the trading bloc ahead
of those of the member nations
(E) help to ensure the continued economic viability of
the world community
5. Which of the following can be inferred from the passage
about the European Community prior to the adoption of
the Europe 1992 program?
(A) There were restrictions on commerce between the
member nations.
(B) The economic policies of the member nations
focused on global trading issues.
(C) There were few impediments to trade between the
member nations and the United States.
(D) The flow of goods between the member nations and
Canada was insignificant.
(E) Relations between multinational corporations and
the governments of the member nations were
strained.
6. The author discusses the FTA and Europe 1992 most
likely in order to
(A) point out the similarities between two seemingly
disparate trading alliances
(B) illustrate how different economic motivations
produce different types of trading blocs
(C) provide contrasting examples of a trend that is
influencing the world economy
(D) identify the most important characteristics of
successful economic integration
(E) trace the history of regional trading blocs
7. Which of the following best describes the organization
of the passage?
(A) An argument is put forth and evidence for and
against it given.
(B) An assertion is made and opposing evidence
presented.
(C) Two hypotheses are described and shown to
inconsistent with one another.
(D) A phenomenon is identified and illustrations of this
phenomenon offered.
(E) A specific case of a phenomenon is discussed a
generalization drawn.