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- 1. Multiple Choice
Regional economic integration involves agreements among countries in a
geographic region to reduce, and ultimately remove, tariff and nontariff barriers to
the free flow of goods, services, and factors of production between each other.
True
False
- 2. Multiple Choice
In a customs union, trade barriers are eliminated among member countries, and
each country maintains its own external trade polices with nonmember countries
True
False
- 3. Multiple Choice
Trade diversion occurs when higher-cost external producers are replaced by lower-
cost external producers within the free trade area
True
False
- 4. Multiple Choice
Country X and Country Y reach an agreement to boost bilateral trade. They agree to remove all barriers to the trade of goods and services. They, however, are free to determine their own trade policies with regard to nonmembers. Which level of economic integration is this an example of?
Free Trade Area
Custom Union
Common Market
Common Union
- 5. Multiple Choice
A _____ has no barriers to trade between member countries, includes a common external trade policy, and allows factors of production to move freely between
members.
free trade area
common market
custom union
economic union
- 6. Multiple Choice
Which feature of an economic union differentiates it from a common market?
Free flow of products and factors of production among countries
A common monetary and fiscal policy
A common external policy towards nonmembers
Ability of factors of production to move among members
- 7. Multiple Choice
The move toward economic union raises the issue of how to make a coordinating bureaucracy accountable to the citizens of member nations. Which of the following
offers a solution to this problem?
A common market
A free trade area
An economic union
A political union
- 8. Multiple Choice
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?
Non tariff barriers
Energy market
Services
Tax rates
- 9. Multiple Choice
The European Community was established by:
the Single European Act of 1987
the Masstricht Treaty 1994
the Masstricht Treaty 1991.
the Treaty of Rome signed in
1957
- 10. Multiple Choice
The _____ is responsible for proposing EU legislation, implementing it, and
monitoring compliance with EU laws by member states.
European Commission
European Parliament
Court of Justice
Council of European Union
- 11. Multiple Choice
Which of the following is directly elected by the populations of the member states
and is primarily a consultative rather than legislative body?
European Commission
European Parliament
Council of European Union
Court of Justice
- 12. Multiple Choice
Which of the following is seen as a benefit of the euro?
Lowering foreign exchange and hedging costs
Zero interest expense for businesses
Reduced competition in most industries
Goverment gaining better control over their monetary policies
- 13. Multiple Choice
What was the main objection raised by those in the United States and Canada who
opposed the ratification of the NAFTA?
Balance of payment problems
Job losses
Threat of competition from Asian companies
Threat of a loss of national sovereignty
- 14. Multiple Choice
Which of the following is true of ASEAN?
China, India, South Korea are among its members
Collectively, member states account for 55% of world trade
It is slowly progressing toward a free trade area
It has been successful in filling basic objectives of fostering a freer trade among members
- 15. Multiple Choice
Bolivia, Peru, Ecuador, Columbia, and Venezuela are all members of:
Mercosur
EU
NAFTA
Andean Pact
- Answer choicesTagsAnswer choicesTags