Question 1

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

Accepted Answer

Regional economic integration may lead to increased employment opportunities, but it is not always guaranteed. The impact on employment depends on the specific measures or policies implemented as part of the integration process.

Question 2

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

Accepted Answer

A political union requires the most sovereignty to be surrendered as it involves a high level of integration, including shared governance and policies among member states.

Question 3

The European Parliament fulfills its role of adopting European Union law by debating and amending legislation.

Accepted Answer

This is true. The European Parliament is one of the two co-legislators of the European Union, along with the Council, and it adopts EU law through a process of debate, amendment, and voting on legislative proposals.

Question 4

The European Free Trade Association (EFTA) has been completely abolished in light of successful integration of the European Union.

Accepted Answer

The EFTA still exists as a separate organization, consisting of Iceland, Liechtenstein, Norway, and Switzerland, even though some of its original members have joined the EU.

Question 5

Countries of the European Union are unanimous in their quest to further enlarge the union.

Accepted Answer

While some countries may support further enlargement of the EU, not all members are unanimous in this goal. Some have concerns about the cost and impact on political and social stability.

Question 6

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

Accepted Answer

Trade diversion occurs when trade is diverted away from efficient suppliers to less efficient suppliers within a free trade area, usually due to the formation of a preferential trade agreement. This shift can result in higher prices for buyers as they are forced to purchase from less efficient producers.

Question 7

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

Accepted Answer

This is because the free movement of goods and labor within the trading bloc allows firms to take advantage of lower wages in other countries, leading to a diffusion of labor-intensive industries to those countries.

Question 8

One country that is a logical, but highly unlikely, candidate for future membership in the European Union is Luxembourg.

Accepted Answer

Luxembourg is already a member state of the European Union, having joined in 1957 as a founding member. Therefore, it is not a logical candidate for future membership.

Question 9

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

Accepted Answer

EU justices are expected to act impartially and independently, without putting the interests of their native countries above those of other member states. They are bound by the EU treaties and the Treaty on the Functioning of the EU, and their decisions should be based on EU law and the principles of the rule of law and justice.

Question 10

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

Accepted Answer

Economic integration can lead to a reduction in trade barriers within a trading bloc, resulting in increased competition among producers. However, if a less efficient producer is protected by government subsidies or other forms of support, they may be able to continue to compete within the bloc despite being less productive than their counterparts in other countries. This could result in that producer being rewarded with increased trade opportunities within the bloc, even though they are not as efficient or competitive in the global market.

Question 11

Because commissioners are appointed by their national governments to the European Commission, they are expected to behave in their own countries' best interest.

Accepted Answer

Commissioners are expected to act in the interest of the EU as a whole, not just their own member state. While they may have expertise in certain policy areas or represent the interests of their home country, their duty is ultimately to work towards the common good of the EU.

Question 12

In addition to the free internal movement of goods, services, labor, and capital, the Treaty of Rome also aimed at establishing common policies among member nations for transportation and agriculture.

Accepted Answer

The Treaty of Rome aimed at establishing common policies among member nations for transportation and agriculture, in addition to the free internal movement of goods, services, labor, and capital.

Question 13

The European Union (EU) and European Free Trade Association (EFTA) created the European Economic Area to cooperate on matters such as the free movement of goods, persons, services, and capital.

Accepted Answer

The statement is true.

Question 14

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

Accepted Answer

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

Question 15

The Maastricht Treaty called for a common currency, monetary and fiscal targets for members, and eventual political union of the member nations.

Accepted Answer

The Maastricht Treaty, signed in 1992, did call for a common currency (the Euro), as well as monetary and fiscal targets for member nations. It also called for closer political union and cooperation among member states.

Question 16

The members of the European Coal and Steel Community signed the Treaty of Rome in 1951 and created the Andean Community.

Accepted Answer

The members of the European Coal and Steel Community signed the Treaty of Rome in 1957, but the Andean Community was not created until 1969 by the signing of the Cartagena Agreement.

Question 17

Economic integration can result in increased trade with a less efficient producer within the trading bloc and reduced trade with a more efficient nonmember producer.

Accepted Answer

Economic integration can lead to trade creation and trade diversion effects. Trade creation occurs when members of the trading bloc increase trade among themselves, often resulting in lower prices and increased efficiency. However, trade diversion occurs when members shift their trade from a more efficient nonmember producer to a less efficient producer within the bloc, often due to political or preferential treatment. This can result in decreased trade with nonmember producers who may have better prices or quality.

Question 18

The goal of the Single European Act was to reduce the ability of European companies to compete against companies from Japan and North America.

Accepted Answer

The goal of the Single European Act, which came into force in 1987, was actually to create a single market within the European Union by removing barriers to trade and promoting free movement of goods, services, people, and capital. Its aim was to enhance European competitiveness in global markets, not to reduce it by hindering European companies.

Question 19

The Council of the European Union (EU) is the legislative body of the EU.

Accepted Answer

The Council of the European Union is one of the main institutions of the European Union, and is responsible for legislative and budgetary decisions.

Question 20

Because the formation of trading blocs significantly reduces or eliminates barriers to trade among members, the producer of a particular good or service is likely to be the least productive producer.

Accepted Answer

The statement is false. The formation of trading blocs can encourage competition and drive producers to increase productivity to remain competitive within the bloc. It is not necessarily the case that the least productive producer will benefit most from the elimination of trade barriers.

Quiz 8: Regional Economic Integration