Question 1

A _____ has reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the group.

Accepted Answer

A customs union enjoys the free trade area's reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the union.

Question 2

Which of the following was a customs union before becoming a common market?

Accepted Answer

A common market is a unified economy and lacks only political unity to become a political union. The European Union was a customs union before becoming a common market.

Question 3

The most fully integrated form of regional cooperation is called a:

Accepted Answer

A political union is the most fully integrated form of regional cooperation.

Question 4

As George Platt examines markets that might match his company's investment requirements, he is particularly interested in the fact that the European Community has an extensive transportation network. This network seems to draw all the member nations closer together. Which of the following critical factors for ensuring an effective economic union is Mr. Platt most likely examining when reviewing transportation networks?

Accepted Answer

Geographical closeness does facilitate the functioning of a common market. It is seen that transportation networks are likely to be interrelated and well developed when countries are close together. Therefore, Mr. Platt is judging the effectiveness of the economic union by assessing the geographic proximity of the members of the union.

Question 5

A _____ agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.

Accepted Answer

A common market agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.

Question 6

One of the first factors that gave the European Union an edge over others in the process of becoming a common market was:

Accepted Answer

One of the first major strengths of the European Union was its transportation network; the opening of the tunnel between England and France further bound this common market.

Question 7

The Treaty of _____ established the European Economic Community (EEC) in 1957 and called for common external tariffs and the gradual elimination of intramarket tariffs, quotas, and other trade barriers.

Accepted Answer

The Treaty of Rome, which established the European Economic Community (EEC) in 1957, called for common external tariffs and the gradual elimination of intramarket tariffs, quotas, and other trade barriers.

Question 8

A (n) _____ of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.

Accepted Answer

A commonwealth of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.

Question 9

Though now disbanded, which of the following was considered to be the most notable enforced political union of the last 40 years?

Accepted Answer

The most notable enforced political union was the Council for Mutual Economic Assistance (COMECON), a centrally controlled group of countries organized by the Soviet Union.

Question 10

At the most general level, the _____ represents the most important and comprehensive trade agreement in history.

Accepted Answer

The World Trade Organization represents the most important and comprehensive trade agreement in history.

Question 11

Similarity of cultures can make or break an economic union. Although there is great cultural diversity in the European Union, key members share _____ and are commonly aware of being European.

Accepted Answer

Cultural similarity eases the shock of economic cooperation with other countries. The more similar the culture, the more likely an agreement is to succeed, because members understand the outlook and viewpoints of their colleagues. Although there is great cultural diversity in the European Union, key members share a long-established Christian heritage and are commonly aware of being European.

Question 12

Which of these levels of economic integration has no restrictions on internal trade and free flow of capital among member nations and lacks only political unity to become a political union?

Accepted Answer

A common market is a unified economy and lacks only political unity to become a political union.

Question 13

A _____ is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.

Accepted Answer

A free trade area is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.

Question 14

Essentially, a free trade area (FTA) provides its members with:

Accepted Answer

A free trade area provides its members with a mass market without barriers to impede the flow of goods and services among partner countries.

Question 15

A _____ is an intermediate step in the transition from a free trade area to a common market.

Accepted Answer

The customs union is a logical stage of cooperation in the transition from an FTA to a common market.

Question 16

The European Union was created when the 12 nations of the European Community ratified the _____.

Accepted Answer

The European Union was created when the 12 nations of the European Community ratified the Maastricht Treaty.

Question 17

Which of the following is the weakest of political unions that is mostly based on economic history and a sense of tradition?

Accepted Answer

A commonwealth can best be described as the weakest of political unions and is mostly based on economic history and a sense of tradition.

Question 18

A _____ involves complete political and economic integration, either voluntary or enforced.

Accepted Answer

Political union is the most fully integrated form of regional cooperation. It involves complete political and economic integration, either voluntary or enforced.

Question 19

The most basic economic integration and cooperation is the:

Accepted Answer

The most basic economic integration and cooperation is the regional cooperation for development (RCD). In the RCD arrangement, governments agree to participate jointly to develop basic industries beneficial to each economy.

Question 20

Which of the following is true of the Maastricht Treaty?

Accepted Answer

The Maastricht Treaty allows for the free movement of goods, persons, services, and capital throughout the member states; a common currency; common foreign and security policies, including defense; a common justice system; and cooperation between police and other authorities on crime, terrorism, and immigration issues.

Quiz 10: Europe, Africa, and the Middle East