Deck 8: Regional Economic Integration

Question 1

The process whereby countries in a geographic area cooperate with one another to reduce or eliminate barriers to the international flow of products,people,or capital is called ________.

A)regional economic integration
B)protectionism
C)mercantilism
D)economic nationalism

Answer 1

A

Question 2

Higher levels of trade between nations result in ________.

A)higher product prices
B)lesser specialization
C)greater purchasing power
D)trade diversion

Answer 2

C

Question 3

The least amount of sovereignty that must be surrendered to a trading bloc occurs in a ________.

A)economic union
B)common market
C)free trade area
D)political union

Answer 3

C

Question 4

Which of the following is the greatest extent of regional economic integration?

A)free trade area
B)political union
C)common market
D)customs union

Question 5

Economic integration whereby countries remove barriers to trade and the movement of labor and capital among members,set a common trade policy against nonmembers,and coordinate their economic policies is called a(n)________.

A)customs union
B)common market
C)economic union
D)free trade area

Question 6

A group of nations in a geographic area undergoing economic integration is called a ________.

A)born global firm
B)maquiladora
C)regional trading bloc
D)Eurocurrency market

Question 7

Which of the following is the lowest extent of regional economic integration?

A)free trade area
B)political union
C)common market
D)customs union

Question 8

A(n)________ requires member nations to harmonize their tax,monetary,and fiscal policies and create a common currency.

A)customs union
B)economic union
C)free trade area
D)common market

Question 9

An increase in the level of trade among nations that results from regional economic integration is called ________.

A)trade diversion
B)mercantilism
C)trade creation
D)economic nationalism

Question 10

The main difference between a free trade area and a customs union is that the members of a customs union ________.

A)agree to the free movement of all factors of production
B)harmonize their tax,monetary,and fiscal policies and create a common currency
C)agree to treat trade with all nonmember nations in a similar manner
D)accept a common stance on economic and political policies regarding nonmember nations

Question 11

Regional economic integration is also referred to as ________.

A)mercantilism
B)nationalism
C)protectionism
D)regionalism

Question 12

Which of the following is true of trade diversion?

A)It increases the purchasing power of consumers.
B)It increases the level of trade between nonmember nations.
C)It generally increases the prices of products in a nation.
D)It guarantees consumers a wider selection of goods.

Question 13

Which of the following is an important goal of regional economic integration?

A)to increase the selling prices of products
B)to raise the living standards of people
C)to limit the choice of products available to customers
D)to establish a socialist government

Question 14

Countries belonging to a ________ maintain whatever policies they see fit against nonmember countries.

A)economic union
B)customs union
C)common market
D)free trade area

Question 15

Economic integration whereby countries remove all barriers to trade and the movement of labor and capital between themselves and set a common trade policy against nonmembers is called a ________.

A)free trade area
B)customs union
C)common market
D)preferential trade area

Question 16

________ require that member countries concede a certain amount of their national autonomy to the supranational union of which they are a part.

A)Free trade areas
B)Customs unions
C)Economic unions
D)Preferential trade areas

Question 17

Which of the following is a result of trade creation?

A)The demand for goods tends to increase.
B)Purchasing power of consumers decreases.
C)Consumers have a limited choice for selection of goods.
D)Imported goods are seldom available at lower prices.

Question 18

Economic integration whereby countries remove all barriers to trade among themselves,but each country determines its own barriers against nonmembers,is called a(n)________.

A)economic union
B)customs union
C)common market
D)free trade area

Question 19

Economic integration whereby countries remove all barriers to trade among themselves,but set a common trade policy against nonmembers is called a(n)________.

A)preferential trade area
B)customs union
C)economic nationalism
D)free trade area

Question 20

Which of the following is a potential drawback of regional economic integration?

A)ethnocentricity
B)trade diversion
C)economic nationalism
D)protectionism

Question 21

Scenario: Moonland Union
Twenty-six nations of Moonland region,have decided to cooperate with one another to eliminate trade barriers among them and create the Moonland Union.They are not sure,however,to what extent they want to cooperate.
Some countries in Moonland Union are interested not just in free trade among themselves and a common trade policy against nonmembers,but also in removing all barriers to the movement of labor and capital among themselves.This type of integration is best described as a ________.

A)free trade area
B)preferential trading area
C)customs union
D)common market

Question 22

Trade agreements allow competitors from other nations to enter the domestic market.

Question 23

A result of trade creation is that buyers pay higher prices for imported goods and services after trade barriers are removed.

Question 24

A common market area is the greatest extent of national integration.

Question 25

A political union makes it mandatory for nations to accept a common stance on all economic and political policies within their territories.

Question 26

In a free trade area,each country can maintain whatever policy it sees fit against nonmember countries.

Question 27

The increase in the level of trade between nations that results from regional economic integration is called trade creation.

Question 28

A common market requires that member nations create a common currency.

Question 29

Scenario: Moonland Union
Twenty-six nations of Moonland region,have decided to cooperate with one another to eliminate trade barriers among them and create the Moonland Union.They are not sure,however,to what extent they want to cooperate.
Country X advocates the greatest level of integration possible for the member nations of the Moonland Union.Which of the following is Country X most likely to support?

A)political union
B)free trade area
C)customs union
D)economic union

Question 30

Which of the following would the government of Zucoland most likely experience as a benefit of joining the trading bloc?

A)trade diversion
B)increased national sovereignty
C)greater consensus
D)production shifts to low-wage nations

Question 31

Scenario: Moonland Union
Twenty-six nations of Moonland region,have decided to cooperate with one another to eliminate trade barriers among them and create the Moonland Union.They are not sure,however,to what extent they want to cooperate.
Country M wants member nations to harmonize their tax,monetary,and fiscal policies and wants to create a common currency.Country M is requesting for the creation of a(n)________ in the Moonland nations.

A)free trade area
B)economic union
C)customs union
D)common market

Question 32

Scenario: Moonland Union
Twenty-six nations of Moonland region,have decided to cooperate with one another to eliminate trade barriers among them and create the Moonland Union.They are not sure,however,to what extent they want to cooperate.
If these twenty-six nations continue to eliminate all barriers to trade among themselves and set a common trade policy against nonmembers,they would create a ________.

A)free trade area
B)preferential trading area
C)customs union
D)political union

Question 33

The regional trading bloc that Zucoland will be joining is most likely a(n)________.

A)economic union
B)free trade area
C)customs union
D)political union

Question 34

If all countries in the bloc are asked to give up the greatest amount of sovereignty,they would most likely be joining a(n)________.

A)economic union
B)free trade area
C)customs union
D)political union

Question 35

Scenario: Moonland Union
Twenty-six nations of Moonland region,have decided to cooperate with one another to eliminate trade barriers among them and create the Moonland Union.They are not sure,however,to what extent they want to cooperate.
As a first stage of cooperation,the countries agree to remove all barriers to trade among themselves.Each country also maintains policies it sees fit against nonmembers.At this stage,Moonland Union can be described as a ________.

A)free trade area
B)political union
C)common market
D)customs union

Question 36

Which of the following would the government of Zucoland most likely experience as a benefit of joining the trading bloc?

A)increased national sovereignty
B)increased military security
C)trade diversion
D)higher-wage employment

Question 37

The greatest benefit of regional integration is trade diversion.

Question 38

Economic integration can unintentionally reward a less efficient producer within a trading bloc.

Question 39

Countries belonging to a free trade area must concede a certain amount of their national autonomy to the supranational union of which they are a part.

Question 40

A group of nations in a geographic region undergoing economic integration is called a regional trading bloc.

Question 41

Currently the most sophisticated and advanced example of regional integration is occurring in ________.

A)Asia
B)Europe
C)North America
D)Africa

Question 42

Discuss free trade areas as a level of regional economic integration.How can regional integration enable employment opportunities?

Question 43

The ________ called for banking in a single common currency,setting up of monetary and fiscal targets,and political union of the European Union members.

A)Maastricht Treaty
B)European monetary union
C)Single European Act
D)Copenhagen Criteria

Question 44

Discuss "political union" as a level of economic integration and "political cooperation" as a benefit of economic integration.

Question 45

A benefit of regional economic integration is that it always expands employment opportunities in all nations.

Question 46

Differentiate among the five levels of economic and political integration.

Question 47

In 1951,Belgium,France,West Germany,Italy,Luxembourg,and the Netherlands signed the Treaty of Paris and created the ________.

A)European Union
B)European Economic Community
C)European Coal and Steel Community
D)European Community

Question 48

The primary purpose of the Gulf Cooperation Council (GCC)at its formation was to create a political union between Iraq and Iran.

Question 49

Which of the following treaties was signed by the members of the European Coal and Steel Community in 1957 for creating the European Economic Community?

A)the Treaty of Rome
B)the Maastricht Treaty
C)the Treaty of Paris
D)the Treaty of Versailles

Question 50

Discuss the benefits and drawbacks of regional integration.

Question 51

When trade diversion occurs,buyers will likely pay less for products.

Question 52

Which of the following is true of the euro?

A)It increases exchange-rate risk for business deals between member nations.
B)It increases transaction costs.
C)It makes prices between markets more transparent.
D)It is not accepted among merchants in France,Germany,and Italy.

Question 53

Which of the following materialized the EU's goals of removing trade barriers,increasing harmonization,and enhancing the competitiveness of European companies?

A)the Maastricht Treaty
B)the European monetary union
C)the Single European Act
D)the Copenhagen Criteria

Question 54

The Single European Act predominantly aimed at establishing common transportation policies among the European Union members.

Question 55

In regional economic integration,industries that require mostly unskilled labor tend to shift production to low-wage nations within a trading bloc.

Question 56

The least amount of sovereignty that must be surrendered to a trading block occurs in a political union.

Question 57

Which of the following countries has been facing difficulties in negotiations regarding its application for European Union membership?

A)Bulgaria
B)Czech Republic
C)Romania
D)Turkey

Question 58

The common currency of the European Union is known as the ________.

A)European currency unit
B)eurodollar
C)euro
D)European unit of account

Question 59

Explain the concepts of trade creation and trade diversion.Who are the winners and losers in each scenario?

Question 60

The European Union plan that established its own central bank and currency in January 1999 is known as the ________.

A)Single European Act
B)European monetary union
C)Copenhagen Criteria
D)Southern Common Market

Question 61

Ombudsman and Data Protection Supervisor are the EU institutions that fulfill secondary and support roles.

Question 62

The Council of the European Union is the executive body of the EU.

Question 63

No proposed legislation becomes EU law unless the ________ votes it into law.

A)Council of the European Union
B)European Parliament
C)Court of Auditors
D)European Commission

Question 64

Which of the following is currently a member of the European Free Trade Association?

A)Slovakia
B)Ireland
C)Norway
D)Italy

Question 65

While ________ encourages free trade among Canada,Mexico and the United States,manufacturers and distributors must abide by local content requirements and rules of origin.

A)NAFTA
B)LAFTA
C)CAN
D)CAFTA-DR

Question 66

The European Free Trade Association was formed in 1960 to focus on trade in ________.

A)consumer goods
B)agricultural goods
C)industrial goods
D)services

Question 67

Which of the following countries is a member of the North American Free Trade Agreement (NAFTA)?

A)Costa Rica
B)Honduras
C)Venezuela
D)Canada

Question 68

The European Union (EU)and European Free Trade Association (EFTA)created the European Economic Area (EEA).

Question 69

The Court of Justice is the ________ of the European Union.

A)court of honor
B)court of appeals
C)small-claims court
D)arbitral tribunal

Question 70

For countries to become members of the European Union,they have to meet certain demands laid down by the EU referred to as the ________.

A)Copenhagen Criteria
B)Closer Economic Relations Agreement
C)Andean Community
D)Euro-Plus Pact

Question 71

Which of the following is best classified as an economic union?

A)Southern Common Market (MERCOSUR)
B)European Union (EU)
C)North American Free Trade Agreement (NAFTA)
D)Andean Community

Question 72

The Council of the European Union is the ________ body of the European Union.

A)legislative
B)executive
C)judicial
D)monitoring

Question 73

The European Free Trade Association focuses on trade in consumer goods.

Question 74

Describe the structure of the European Union.

Question 75

The European Commission is the ________ body of the European Union.

A)legislative
B)executive
C)financial
D)monitoring

Question 76

Which of the following institutions is least likely to play an important role in monitoring and enforcing economic and political integration in the European Union?

A)European Parliament
B)Council of the European Union
C)European Court of Human Rights
D)European Commission

Question 77

The Maastricht Treaty called for political union of the member nations.

Question 78

Like the European Union commissioners,EU justices are required to act in the interest of their native countries.

Question 79

The Court of Justice is the court of appeals of the European Union.

Question 80

The main purpose of the ________ is to debate and amend legislation proposed by the European Commission of the EU.

A)European Parliament
B)Council of the European Union
C)Court of Auditors
D)Court of Justice