Question 1

BERPHO,an economic union,wants to make a coordinating bureaucracy that is accountable to the citizens of member nations.What BERPHO wants to do is called a(n)

Accepted Answer

A political union involves more than just economic collaboration, but also a sharing of political power and decision-making among member nations. In this case, BERPHO wants to establish a coordinating bureaucracy that is accountable to the citizens of member nations, which suggests a political integration beyond just economic cooperation.

Question 2

The fourteen member countries of BERPHO have a level of economic integration that involves the use of a common currency,harmonization of members' tax rates,and a common monetary and fiscal policy.BERPHO is an example of a(n)

Accepted Answer

BERPHO's level of economic integration, involving the use of a common currency, harmonization of tax rates, and a common monetary and fiscal policy, is indicative of an economic union. This is the highest level of economic integration among member countries.

Question 3

The countries of Mesomia,Candera,Blauthop,and Rochus are committed to removing all barriers to the free flow of goods and services between each other but want to pursue independent external trade policies.The countries have in mind a(n)

Accepted Answer

A free trade area is an agreement between two or more countries to eliminate tariffs and other trade barriers between them, while allowing each country to maintain its own external trade policies.

Question 4

Which of the following is defined as a group of countries committed to removing all barriers to the free flow of goods and services between each other,but pursuing independent external trade policies?

Accepted Answer

A free trade area is defined as a group of countries that agree to remove all trade barriers between themselves, but retain their own external trade policies towards other countries. This allows for free trade within the area but each country can set its own trade policies outside of the agreement.

Question 5

SMEAN is an economic union of six geographically close countries.Which of the following is true with regard to SMEAN?

Accepted Answer

SMEAN involves the free flow of products and factors of production among member countries. Options A, B, D, and E are not applicable to SMEAN.

Question 6

The six member countries of the Murasian Common Market are unhappy with the outcome of their economic integration.They want something that entails a closer economic integration and cooperation than a common market and want to pursue a common currency.They should form a(n)

Accepted Answer

The best choice for the six member countries who want closer economic integration and cooperation than a common market and want to pursue a common currency is to form an economic union. An economic union involves not only free trade and a common market like a customs union but also involves harmonization of economic policies, including monetary and fiscal policy, and a common currency. This would provide the necessary framework for the six countries to achieve their objectives of closer integration and cooperation.

Question 7

If seven countries formed a common market,which of the following would be a feature of their trade agreement?

Accepted Answer

The feature of free movement of factors of production (such as labor and capital) is a common feature in trade agreements among member nations in a common market. Option A is incorrect because a common external trade policy is usually established among member nations in order to negotiate better trade deals with nonmembers. Option C is incorrect because the whole purpose of a common market is to eliminate barriers to the free flow of goods and services within member nations. Option D is incorrect because a common market usually has an administrative body to oversee trade relations with nonmembers. Option E is incorrect because the common currency is usually not mandatory in a common market.

Question 8

The six countries in the northern side of the Pacific Rim agreed to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods,services,and factors of production between each other.The agreement among these countries is referred to as a

Accepted Answer

The agreement described in the question refers to regional economic integration, which is a process where countries in a particular region agree to reduce or eliminate trade barriers, as well as harmonize their economic policies and regulations, to promote greater economic cooperation and integration. This can take different forms, such as a free trade agreement (FTA), a customs union, a common market, or an economic union. In this case, the six countries in the northern side of the Pacific Rim are likely to be part of an FTA, such as the Trans-Pacific Partnership (TPP), which aims to promote trade liberalization and economic integration among its members. The other options do not accurately describe the agreement or concept in question.

Question 9

Eripria,Gautom,and Kasmonis,three countries in a specific geographic area decide to form a free trade area.Which of the following is true with regard to their free trade area?

Accepted Answer

In a free trade area, member countries eliminate tariffs and trade barriers among themselves but maintain their own trade policies towards non-member countries.

Question 10

Which of the following is true of the European Free Trade Association (EFTA)?

Accepted Answer

The European Free Trade Association (EFTA) was founded by those western European countries that initially decided not to be part of the European Community. Therefore, option D is the correct choice. Option A is incorrect as the emphasis of EFTA has been on free trade in industrial goods. Option B is incorrect as industrial goods were included in the trade arrangement, and members were expected to remove tariffs on these goods. Option C is incorrect as members can determine the level of protection applied to goods coming from outside EFTA. Option E is incorrect as EFTA does not impose a common tariff on products imported from outside.

Question 11

Since the number of trade groups in the African continent is impressive,progress toward the establishment of meaningful trade blocs has been fast.

Accepted Answer

The statement is false. Although there are many trade groups in Africa, progress towards the establishment of meaningful trade blocs has been slow due to various challenges such as differences in language, culture, and economic policies.

Question 12

The countries of Mimbo,Juwan,and Ninot agreed to remove all barriers to the trade of goods and services among each other.However,the three countries agreed that each would be allowed to determine its own trade policies with regard to nonmembers.The economic integration among these three countries is a(n)

Accepted Answer

A free trade area is an economic integration where member countries agree to remove trade barriers among each other but are free to determine their own policies with non-members. This scenario aligns with the definition of a free trade area. In customs unions, common markets, and economic unions, member countries have a more extensive degree of economic integration, such as the common external tariff, common market policies, and unified economic policies. A political union goes beyond economic integration and involves a set of political institutions that oversee a range of policy areas, including trade. However, no information suggests that any political institutions are established in this case.

Question 13

Where has the movement toward regional economic integration been most successful?

Accepted Answer

The European Union (EU) has been the most successful example of regional economic integration. It began as a trade agreement in 1957 between six countries, and has since expanded to include 27 member states. The EU has created a single market with free movement of goods, services, people, and capital, and has established a common currency, the euro. The EU has also worked toward greater political integration, through the creation of a European Parliament and the development of common foreign and security policies. The success of the EU has been attributed to factors such as a shared commitment to democracy and human rights, strong institutional frameworks, and financial support for member states.

Question 14

The creation of a single market through regional economic integration offers significant opportunities because markets that were formerly protected from foreign competition are increasingly open.

Accepted Answer

The statement is true. Regional economic integration leads to a single market where the barriers to trade are reduced or eliminated, which creates more opportunities for businesses to expand their markets and takes advantage of economies of scale.

Question 15

Three countries,close to each other in the Pacific Rim,enter into an agreement to remove all tariffs and trade barriers between them.They decide on a common trade policy with regard to nonmembers.Faced with political backlash,the countries stop short of allowing mobility of factors of production such as labor and capital.Which of the following levels of economic integration best describes this arrangement?

Accepted Answer

This arrangement is best described as a customs union, where countries remove trade barriers among themselves and adopt a common external trade policy, but do not allow free movement of factors of production.

Question 16

The concept of the "euro-consumer" is a myth.

Accepted Answer

The idea of a single European consumer with homogeneous tastes and preferences is not supported by empirical evidence, as cultural, economic and social differences among European countries affect consumer behavior and choices. Therefore, the euro-consumer is more a marketing construct than a reflection of reality.

Question 17

Which of the following is the most popular form of regional economic integration,accounting for almost 90 percent of regional agreements?

Accepted Answer

Free trade agreements are the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements. These agreements aim to reduce or eliminate tariffs, quotas, and other trade barriers between member countries while allowing them to maintain their own policies and regulations. Examples include the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP).

Question 18

Which of the following is true with regard to regional economic integration?

Accepted Answer

Regional economic integration typically leads to lower tariffs and reduced trade barriers, which can result in lower prices for consumers.

Answer: B 
 WTO members are required to notify the organization of any regional trade agreements they participate in.

Answer: E 
 Regional economic integration has been successful in Asia, particularly with the establishment of the ASEAN Free Trade Area and the ASEAN Economic Community.

Answers A and D are incorrect as they make inaccurate statements.

Question 19

An advantage of the emergence of single markets is that the lowering of barriers to trade and investment among countries has led to decreased price competition throughout the European Union.

Accepted Answer

The statement is false. The emergence of single markets has actually led to increased price competition as businesses compete to attract customers from across the entire market. The removal of trade barriers has also led to increased efficiency and economies of scale for businesses, which can lead to lower prices for consumers.

Question 20

To spur trade,Cormoran,Brithea,and Asmakush decided on economic integration where there were no barriers to trade between the three countries,they agreed on a common external trade policy,and allowed factors of production to move freely between the three countries.In short,the three countries formed a

Accepted Answer

The three countries formed a common market where there are no barriers to trade between them, a common external trade policy, and freedom of movement for factors of production.

Quiz 9: Regional Economic Integration