Question 1

The implied loss of national sovereignty to the ECB underlies the decision by Great Britain,Denmark,and Sweden to stay out of the euro zone for now.

Accepted Answer

The implied loss of national sovereignty to the ECB underlies the decision by Great Britain, Denmark, and Sweden to stay out of the euro zone for now.

Question 2

Political turmoil in several African nations has persistently impeded any meaningful progress in economic integration.

Accepted Answer

Significant political turmoil in several African nations has persistently impeded any meaningful progress.

Question 3

The emerging role of the European Commission in competition policy suggests the EU is increasingly willing and able to intervene and impose conditions on companies proposing mergers and acquisitions.

Accepted Answer

The emerging role of the European Commission in competition policy suggests the EU is increasingly willing and able to intervene and impose conditions on companies proposing mergers and acquisitions.

Question 4

A key benefit resulting from the adoption of the euro is the ability to compare prices across member markets.

Accepted Answer

The adoption of a common currency makes it easier to compare prices across Europe. This has been increasing competition because it has become easier for consumers to shop around.

Question 5

To exploit the opportunities presented by the EU,non-EU firms must establish EU subsidiaries.

Accepted Answer

Many major U.S. firms have long had subsidiaries in Europe. Those that do not would be advised to consider establishing them now, lest they run the risk of being shut out of the EU by nontariff barriers.

Question 6

The establishment of the euro required participating countries to give up their monetary policy.

Accepted Answer

Establishing the euro required participating national governments not only to give up their own currencies, but also to give up control over monetary policy.

Question 7

Once barriers to trade and investment are removed,companies can treat a group of integrated countries like the EU as a single market and produce standardized products for it.

Accepted Answer

Even after the removal of barriers to trade and investment, enduring differences in culture and competitive practices often limit the ability of companies to realize cost economies by centralizing production in key locations and producing a standardized product for a single multiple-country market.

Question 8

According to Alexander Yeats,the trade diversion effects of Mercosur outweigh its trade creation effects.

Accepted Answer

Alexander Yeats, a critic of the Mercosur, points out that the trade diversion effects of Mercosur outweigh its trade creation effects.

Question 9

The Single European Act committed EU countries to adopting a common currency by January 1,1999.

Accepted Answer

In December 1991, EC members signed a treaty (the Maastricht Treaty) that committed them to adopting a common currency by January 1, 1999.

Question 10

The East African Community (EAC)has been a successful integration effort in Africa during the last three decades.

Accepted Answer

In early 2001, Kenya, Uganda, and Tanzania, member states of the East African Community (EAC), committed themselves to relaunching their bloc, 24 years after it collapsed.

Question 11

The governments of both Canada and the United States are keen on adding other Latin American countries to NAFTA.

Accepted Answer

A number of other Latin American countries have indicated their desire to eventually join NAFTA. The governments of both Canada and the United States are adopting a wait-and-see attitude with regard to most countries.

Question 12

The Free Trade Area of the Americas that was established in 2005 has thus far proven to be a success.

Accepted Answer

Currently, however, FTAA is very much a work in progress, and the progress has been slow.

Question 13

The Asia-Pacific Economic Cooperation was established to increase multinational cooperation in view of the economic rise of the Pacific nations and the growing interdependence within the region.

Accepted Answer

The stated aim of APEC is to increase multilateral cooperation in view of the economic rise of the Pacific nations and the growing interdependence within the region.

Question 14

A benefit to companies of economic integration is the opportunity to centralize their production and reduce costs.

Accepted Answer

Rather than producing a product in each of the 27 EU countries or the 3 NAFTA countries, a firm may be able to serve the whole EU or North American market from a single location.

Question 15

Great Britain,Sweden,and France have led the push toward adopting the euro.

Accepted Answer

Three long-term EU members, Great Britain, Denmark, and Sweden, are still sitting on the sidelines. They have not adopted the euro.

Question 16

The bulk of intra-ASEAN trade consisted of goods whose tariffs had been reduced through an ASEAN preferential trade arrangement.

Accepted Answer

Until recently, only 5 percent of intra-ASEAN trade consisted of goods whose tariffs had been reduced through an ASEAN preferential trade arrangement.

Question 17

On average,studies indicate that NAFTA's overall impact has been small but positive.

Accepted Answer

Studies of NAFTA's impact suggest its initial effects were at best muted, and both advocates and detractors may have been guilty of exaggeration. On average, studies indicate that NAFTA's overall impact has been small but positive.

Question 18

The Andean Pact is a highly successful common market modeled after the EU.

Accepted Answer

The Andean Pact was largely based on the EU model, but was far less successful at achieving its stated goals.

Question 19

Since its establishment,the euro has had a stable trading history.

Accepted Answer

Since its establishment January 1, 1999, the euro has had a volatile trading history against the world's major currency, the U.S. dollar.

Question 20

Establishment of the euro created the largest currency zone in the world,replacing the position the U.S.dollar had held for decades.

Accepted Answer

By adopting the euro, the EU has created the second most widely traded currency in the world after that of the U.S. dollar.

Quiz 9: Regional Trade Pacts Give the Mexican Auto Industry an Edge

The implied loss of national sovereignty to the ECB underlies the decision by Great Britain,Denmark,and Sweden to stay out of the euro zone for now.

Political turmoil in several African nations has persistently impeded any meaningful progress in economic integration.

The emerging role of the European Commission in competition policy suggests the EU is increasingly willing and able to intervene and impose conditions on companies proposing mergers and acquisitions.

A key benefit resulting from the adoption of the euro is the ability to compare prices across member markets.

To exploit the opportunities presented by the EU,non-EU firms must establish EU subsidiaries.

The establishment of the euro required participating countries to give up their monetary policy.

Once barriers to trade and investment are removed,companies can treat a group of integrated countries like the EU as a single market and produce standardized products for it.

According to Alexander Yeats,the trade diversion effects of Mercosur outweigh its trade creation effects.

The Single European Act committed EU countries to adopting a common currency by January 1,1999.

The East African Community (EAC)has been a successful integration effort in Africa during the last three decades.

The governments of both Canada and the United States are keen on adding other Latin American countries to NAFTA.

The Free Trade Area of the Americas that was established in 2005 has thus far proven to be a success.

The Asia-Pacific Economic Cooperation was established to increase multinational cooperation in view of the economic rise of the Pacific nations and the growing interdependence within the region.

A benefit to companies of economic integration is the opportunity to centralize their production and reduce costs.

Great Britain,Sweden,and France have led the push toward adopting the euro.

The bulk of intra-ASEAN trade consisted of goods whose tariffs had been reduced through an ASEAN preferential trade arrangement.

On average,studies indicate that NAFTA's overall impact has been small but positive.

The Andean Pact is a highly successful common market modeled after the EU.

Since its establishment,the euro has had a stable trading history.

Establishment of the euro created the largest currency zone in the world,replacing the position the U.S.dollar had held for decades.