Question 1

A major difficulty towards achieving economic integration within _________ has been the administration of a common agricultural policy (CAP).
A)NAFTA
B)the EU
C)ASEAN
D)MERCOSUR
E)OPEC

Accepted Answer

The administration of a common agricultural policy (CAP) has been a major difficulty towards achieving economic integration within the European Union (EU). The CAP involves setting common prices and subsidies for agricultural products in order to ensure fair competition among member states. However, it has been difficult to balance the needs and interests of different member states, leading to ongoing discussions and reforms of the policy.

Question 2

A larger market will tend to increase the number of competing firms,resulting in greater efficiency and lower prices for consumers. This is due to:
A)Absolute advantage
B)Product diversity
C)Customer efficiency
D)Integration
E)Effectiveness

Accepted Answer

D

Question 3

A(n)_______ is a group of countries that have common foreign policy and security policy that share judicial cooperation.
A)Free-trade area
B)Customs union
C)Common market
D)Economic union
E)Political union

Accepted Answer

A political union involves countries that not only have common economic policies but also share political institutions, such as a common government, and foreign and security policies. This type of union goes beyond the customs union or free trade area and requires a significant level of integration among the member states.

Question 4

__________ is the cost to a particular country when a group of countries trade a product freely among themselves but maintain common barriers to trade with nonmembers.
A)Trade creation
B)Trade diversion
C)Balance of power
D)Economies of scale
E)Trade deficit

Accepted Answer

Trade diversion occurs when a group of countries trade amongst themselves freely but maintain barriers to trade with non-members. This results in diverting trade away from more efficient producers outside the trade bloc and towards less efficient producers within the bloc. This can lead to higher prices for consumers and lower economic welfare for the country outside the trade bloc.

Question 5

__________ refers to lower production costs resulting from greater production for an enlarged market.
A)Production creation
B)Trade diversion
C)Internal economies of scale
D)External economies of scale
E)Factor mobility

Accepted Answer

Internal economies of scale refer to the cost advantages that a firm experiences when it increases its output. This can be achieved through specialization, increased efficiency, and better resource utilization. As the firm produces more, it benefits from lower average costs and can pass these savings on to the customers. This allows the firm to expand its market share and increase its profitability.

Question 6

Jen lives in a European country that harmonizes monetary policies,taxation,and government spending,and also has a common currency,the Euro. This type of integration can best be described as a(n):
A)Free-trade area
B)Customs union
C)Common market
D)Economic union
E)Social union

Accepted Answer

Economic union refers to a level of economic integration where countries harmonize their monetary policies, taxation, government spending, and also have a common currency. This means that the member countries have a high degree of economic coordination and are committed to shared economic policies, making it the most advanced form of economic integration.

Question 7

The four freedoms identified in the economic and monetary union (EMU)include coordination of economic policies,creation of a European central bank,replacement of national monetary authorities,and:
A)Adoption of the U.S.dollar as the common currency
B)Adoption of the Euro as the common currency
C)Establishment of a free trade area
D)Adoption of Spanish as the common language
E)Adoption of English as the common language

Accepted Answer

The fourth freedom identified in the EMU is the adoption of the Euro as the common currency. This involved replacing the national currencies of participating countries with the Euro, which is managed by the European Central Bank.

Question 8

_________ will lead to the movement of labor and capital from areas of low productivity to areas of high productivity.
A)Trade creation
B)Supply chain management
C)Trade diversion
D)Price mobility
E)Factor mobility

Accepted Answer

Factor mobility refers to the ability of labor and capital to move from areas of low productivity to areas of high productivity, which leads to an increase in economic efficiency and growth. Trade creation and diversion refer to the effects of trade on the allocation of resources, while supply chain management and price mobility are related to the management and coordination of production and distribution processes.

Question 9

The primary difficulty within the European Union in terms of achieving the goal of free movement of goods has been an inability to agree on a common:
A)Language
B)Religion
C)Trade policy
D)Currency
E)Immigration policy

Accepted Answer

The answer of The primary difficulty within the European Union...

Question 10

Which institution of the European Union is composed of 751 members and started out essentially as an advisory body with relatively little power?
A)Court of Justice
B)European Commission
C)Council of Ministers
D)European Parliament
E)Court of Auditors

Accepted Answer

The European Parliament is composed of 751 members and started out as an advisory body with relatively little power. Over time, its powers have expanded, and it is now one of the main decision-making bodies of the EU, with the power to adopt legislation, approve the budget, and oversee the work of other EU institutions.

Question 11

________ is the ability to freely move factors of production across borders,as among common market countries.
A)Effectiveness
B)Efficiency
C)Capital mobility
D)Production mobility
E)Factor mobility

Accepted Answer

Factor mobility refers to the ability to move factors of production such as labor, capital, and technology across national borders to where they are most efficiently utilized. This is a key feature of common markets, such as the European Union, which allow for the free movement of goods, services, and factors of production between member states.

Question 12

When Spain joined the European Union,its exports of wheat and other products increased as a result of reduced tariffs. This can best be described as:
A)Trade creation
B)Trade diversion
C)Balance of power
D)Economies of scale
E)European integration

Accepted Answer

The situation described is an example of trade creation, which occurs when a new trade agreement or union leads to increased trade among its members. This is usually due to reduced tariffs and increased market access, as seen in the case of Spain's increased exports after joining the European Union.

Question 13

The _____________ has the final power to decide EU actions.
A)Court of Justice
B)European Commission
C)Council of Ministers
D)European Parliament
E)Court of Auditors

Accepted Answer

The Council of Ministers is made up of representatives from each EU member state and has the ultimate decision-making power in the EU. They are responsible for negotiating and adopting laws and policies, as well as coordinating the EU's foreign and security policies. The other institutions, including the Court of Justice, European Commission, and European Parliament, have important roles but do not have the final say in EU actions.

Question 14

The least restrictive form of economic integration is a(n)________,in which all barriers to trade among member countries are removed,although sometimes only for certain goods or services.
A)free-trade area
B)customs union
C)common market
D)economic union
E)political union

Accepted Answer

A free-trade area is the least restrictive form of economic integration, as it involves the removal of barriers to trade among member countries, usually for certain goods or services. However, each member country maintains its own trade policies with non-member countries. This type of integration promotes free trade and increases economic efficiency by allowing for specialization and comparative advantage.

Question 15

What form of economic integration involves collaboration among trading countries in which members dismantle trade barriers among members and also establish a common trade policy with respect to nonmembers?
A)Free-trade area
B)Customs union
C)Common market
D)Economic union
E)Political union

Accepted Answer

A customs union involves member countries removing trade barriers among themselves and adopting a unified external trade policy.

Question 16

In 1957,the European Economic Community was formally established by the Treaty of:
A)Rome
B)Madrid
C)Versailles
D)Leningrad
E)Napoleon

Accepted Answer

The Treaty of Rome was signed on March 25, 1957, by the six founding members of the European Economic Community (EEC), also known as the Common Market. The treaty established a customs union among Belgium, France, Germany, Italy, Luxembourg, and the Netherlands, with the goal of promoting economic cooperation and integration between the member states. It laid the foundations for what is now the European Union (EU).

Question 17

TireCo is a tire-making company headquartered in France,with operations in several European countries. As a result of these countries' membership in the EU,the company has benefited from lower production costs due to greater access to highly skilled labor at a lower cost to the company. This can best be described as:
A)Internal economies of scale
B)External economies of scale
C)Supply chain management
D)Just-in-time management
E)Trade creation

Accepted Answer

External economies of scale refer to cost savings that result from factors outside the company, such as access to skilled labor, technology, or infrastructure. In this case, TireCo is benefiting from lower production costs due to external factors related to the EU's policies and regulations.

Question 18

A German and an American are discussing differences between political and economic organizations within their respective countries. The German explains that the EU organization that is most like the U.S.judicial system is the:
A)European Parliament
B)Council of Ministers
C)Court of Auditors
D)Court of Justice
E)Court of Appeals

Accepted Answer

The Court of Justice of the European Union is the EU's highest court and is responsible for ensuring the consistent interpretation and application of EU law across all member countries. This can be seen as analogous to the US judicial system, which includes a Supreme Court that interprets and applies federal laws across all states.

Question 19

Members of the Group of Five include the United States,Britain,France,Germany,and:
A)Russia
B)China
C)Japan
D)Brazil
E)Uruguay

Accepted Answer

The Group of Five (G5) includes the United States, Britain, France, Germany, and Japan. These countries are major non-BRICS economies and often meet to discuss economic policies and coordination.

Question 20

The __________ body of the EU is the European Commission,headquartered in Brussels.
A)executive
B)advisory
C)judicial
D)legislative
E)totalitarian

Accepted Answer

The European Commission is the executive body of the EU, responsible for proposing and implementing legislation, managing the EU budget, and enforcing EU law.

Quiz 8: Economic Integration, emerging and Developing Markets

A major difficulty towards achieving economic integration within _________ has been the administration of a common agricultural policy (CAP) .

A larger market will tend to increase the number of competing firms,resulting in greater efficiency and lower prices for consumers. This is due to:

A(n) _______ is a group of countries that have common foreign policy and security policy that share judicial cooperation.

__________ is the cost to a particular country when a group of countries trade a product freely among themselves but maintain common barriers to trade with nonmembers.

__________ refers to lower production costs resulting from greater production for an enlarged market.

Jen lives in a European country that harmonizes monetary policies,taxation,and government spending,and also has a common currency,the Euro. This type of integration can best be described as a(n) :

The four freedoms identified in the economic and monetary union (EMU) include coordination of economic policies,creation of a European central bank,replacement of national monetary authorities,and:

_________ will lead to the movement of labor and capital from areas of low productivity to areas of high productivity.

The primary difficulty within the European Union in terms of achieving the goal of free movement of goods has been an inability to agree on a common:

Which institution of the European Union is composed of 751 members and started out essentially as an advisory body with relatively little power?

________ is the ability to freely move factors of production across borders,as among common market countries.

When Spain joined the European Union,its exports of wheat and other products increased as a result of reduced tariffs. This can best be described as:

The _____________ has the final power to decide EU actions.

The least restrictive form of economic integration is a(n) ________,in which all barriers to trade among member countries are removed,although sometimes only for certain goods or services.

What form of economic integration involves collaboration among trading countries in which members dismantle trade barriers among members and also establish a common trade policy with respect to nonmembers?

In 1957,the European Economic Community was formally established by the Treaty of:

A German and an American are discussing differences between political and economic organizations within their respective countries. The German explains that the EU organization that is most like the U.S.judicial system is the:

Members of the Group of Five include the United States,Britain,France,Germany,and:

The __________ body of the EU is the European Commission,headquartered in Brussels.