Question 1

A(n)  _____ entails even closer economic integration and cooperation than a common market.

Accepted Answer

A)   customs union
B)   free trade area
C)   economic union
D)   full political unionE) A) and B)
F) A) and C)

Question 2

Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement.

Accepted Answer

A) True 
 B)False

Question 3

The bulk of intra-ASEAN trade consisted of goods whose tariffs had been reduced through an ASEAN preferential trade arrangement.

Accepted Answer

A) True 
 B)False

Question 4

Political turmoil in several African nations has persistently impeded any meaningful progress in economic integration.

Accepted Answer

A) True 
 B)False

Question 5

A political benefit of economic integration is that it:

Accepted Answer

A)   enables participants to achieve gains from the free flow of trade.
B)   enables participants to achieve gains from the free flow of investment.
C)   allow countries to specialize in the production of goods and services that they can produce most efficiently.
D)   reduces the potential for violent conflict.E) All of the above
F) B) and D)

Question 6

To ensure that a free trade agreement does not result in trade diversion, which of the following has to come within the scope of WTO?

Accepted Answer

A)   Nontariff barriers
B)   Services
C)   Energy markets
D)   Tax ratesE) A) and D)
F) A) and B)

Question 7

Once barriers to trade and investment are removed, companies:

Accepted Answer

A)   can realize cost economies by centralizing production in key locations regardless of culture differences.
B)   can treat a group of integrated countries like the EU as a single market and produce standardized products for it.
C)   no longer have to deal with competitive practices that formerly limited their ability to realize cost economies.
D)   may still find it difficult to produce a standardized product for a single multiple-country market.E) A) and C)
F) All of the above

Question 8

_____ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.

Accepted Answer

A)   Trade deficit
B)   Trade diversion
C)   Trade creation
D)   Trade distortionE) C) and D)
F) B) and C)

Question 9

Which treaty, signed in December 1991, committed EC members to adopting a common currency by January 1, 1999?

Accepted Answer

A)   The Maastricht Treaty
B)   The Treaty of Rome
C)   The Single European Act
D)   The Treaty of LisbonE) A) and B)
F) All of the above

Question 10

Because of the fact that everyone benefits from economic integration, it is easy to achieve and sustain.

Accepted Answer

A) True 
 B)False

Question 11

Which level of economic integration eliminates trade barriers between member countries and adopts a common external trade policy?

Accepted Answer

A)   Political union
B)   Customs union
C)   Common market
D)   Economic unionE) A) and B)
F) A) and C)

Question 12

The movement toward regional economic integration been most successful in _____.

Accepted Answer

A)   Europe
B)   Asia
C)   Africa
D)   Central AmericaE) None of the above
F) A) and B)

Question 13

The European Union is an example of a perfect economic union.

Accepted Answer

A) True 
 B)False

Question 14

The Single European Act committed EU countries to adopting a common currency by January 1, 1999.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following explains why economic integration has never been easy to achieve or sustain, despite the strong economic and political arguments in support?

Accepted Answer

A)   No country has shown significant improvement because of economic integration.
B)   Countries fear a reduction of their political weight in the world because of economic integration.
C)   Linking neighboring economies and making them increasingly dependent on each other creates little incentives for political cooperation.
D)   While a nation as a whole may benefit significantly, certain groups may lose.E) B) and D)
F) A) and C)

Question 16

Discuss the Free Trade Area of the Americas. What is hindering its progress? What is the position of the U.S. on the agreement? How does Brazil feel about the FTAA?

Accepted Answer

The Free Trade Area of the Americas (FTA...

Question 17

The most recent attempt to reenergize the free trade movement in Africa occurred in early 2001, when _____, Uganda, and Tanzania, member states of the East African Community (EAC) , committed themselves to relaunching their bloc, 24 years after it collapsed.

Accepted Answer

A)   Sudan
B)   Ethiopia
C)   Kenya
D)   SomaliaE) A) and D)
F) A) and C)

Question 18

Which of the following is a reason why Turkey is not yet a member of the EU?

Accepted Answer

A)   Only about 10 percent of Turkey's international trade is with the EU.
B)   There are concerns over human rights issues in the country.
C)   The country has yet to form a customs union with the EU.
D)   Turkey has a weak economy.E) None of the above
F) A) and B)

Question 19

The ultimate controlling unit within the EU is the _____.

Accepted Answer

A)   European Commission
B)   European Parliament
C)   Court of Justice
D)   Council of the European UnionE) A) and D)
F) B) and C)

Question 20

_____ occurs when higher-cost external producers are replaced by lower-cost external producers within the free trade area.

Accepted Answer

A)   Trade creation
B)   A customs union
C)   Trade diversion
D)   A common marketE) C) and D)
F) All of the above

Exam 9: Regional Trade Pacts Give the Mexican Auto Industry an Edge

Which of the following is a reason why Turkey is not yet a member of the EU?

Correct AnswerverifiedShow Answer

The bulk of intra-ASEAN trade consisted of goods whose tariffs had been reduced through an ASEAN preferential trade arrangement.

Correct AnswerverifiedShow Answer

Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement.

Correct AnswerverifiedShow Answer

The European Union is an example of a perfect economic union.

Correct AnswerverifiedShow Answer

The ultimate controlling unit within the EU is the _____.

Correct AnswerverifiedShow Answer

Which treaty, signed in December 1991, committed EC members to adopting a common currency by January 1, 1999?

Correct AnswerverifiedShow Answer

Once barriers to trade and investment are removed, companies:

Correct AnswerverifiedShow Answer

Because of the fact that everyone benefits from economic integration, it is easy to achieve and sustain.

Correct AnswerverifiedShow Answer

Which of the following explains why economic integration has never been easy to achieve or sustain, despite the strong economic and political arguments in support?

Correct AnswerverifiedShow Answer

Political turmoil in several African nations has persistently impeded any meaningful progress in economic integration.

Correct AnswerverifiedShow Answer

To ensure that a free trade agreement does not result in trade diversion, which of the following has to come within the scope of WTO?

Correct AnswerverifiedShow Answer

_____ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.

Correct AnswerverifiedShow Answer

A(n) _____ entails even closer economic integration and cooperation than a common market.

Correct AnswerverifiedShow Answer

_____ occurs when higher-cost external producers are replaced by lower-cost external producers within the free trade area.

Correct AnswerverifiedShow Answer

The most recent attempt to reenergize the free trade movement in Africa occurred in early 2001, when _____, Uganda, and Tanzania, member states of the East African Community (EAC) , committed themselves to relaunching their bloc, 24 years after it collapsed.

Correct AnswerverifiedShow Answer

The Single European Act committed EU countries to adopting a common currency by January 1, 1999.

Correct AnswerverifiedShow Answer

Discuss the Free Trade Area of the Americas. What is hindering its progress? What is the position of the U.S. on the agreement? How does Brazil feel about the FTAA?

Correct AnswerverifiedThe Free Trade Area of the Americas (FTA...View AnswerShow Answer

A political benefit of economic integration is that it:

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The movement toward regional economic integration been most successful in _____.

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Which level of economic integration eliminates trade barriers between member countries and adopts a common external trade policy?

Correct AnswerverifiedShow Answer

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The Free Trade Area of the Americas (FTA...
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