Question 1

A "paper" regional trade agreement:

Accepted Answer

A)  is an agreement that has yet to incorporate international trade initiated via online orders. 
B)  is an agreement that nations established years back but no longer actively enforce. 
C)  involves a number of intricate legal mechanisms by which nations can deflect trade. 
D)  involves a number of intricate legal mechanisms by which nations can divert trade. 
A)  is an agreement that has yet to incorporate international trade initiated via online orders. 
B)  is an agreement that nations established years back but no longer actively enforce. 
C)  involves a number of intricate legal mechanisms by which nations can deflect trade. 
D)  involves a number of intricate legal mechanisms by which nations can divert trade. B

Question 2

NAFTA resulted in more significant changes in trade patterns in Mexico and Canada than in the United States.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following regional trade blocs has the largest trade concentration ratio?

Accepted Answer

A)  Mercosur 
B)  ASEAN 
C)  Andean Community 
D)  NAFTA 
A)  Mercosur 
B)  ASEAN 
C)  Andean Community 
D)  NAFTA C

Question 4

Preferential trade arrangements and free trade areas are the strongest forms of trade arrangement.

Accepted Answer

A) True 
 B)False

Question 5

The large majority of regional trade agreements cover trade in services rather than trade in physical merchandise.

Accepted Answer

A) True 
 B)False

Question 6

One nation's flow of international trade as a percentage of a regional or global trade total is called:

Accepted Answer

A)  a trade distribution ratio. 
B)  a trade density ratio. 
C)  a trade concentration ratio. 
D)  a trade share. 
A)  a trade distribution ratio. 
B)  a trade density ratio. 
C)  a trade concentration ratio. 
D)  a trade share.

Question 7

A trading arrangement that commits participating nations to remove all barriers to trade among their group, to abide by common restrictions on trade with other countries outside the group, to allow unhindered movements of factors of production within the group, and to closely coordinate all economic policies with other participants is known as:

Accepted Answer

A)  a customs union. 
B)  a common market. 
C)  a free trade area. 
D)  an economic union. 
A)  a customs union. 
B)  a common market. 
C)  a free trade area. 
D)  an economic union.

Question 8

A regional trade agreement negotiated and agreed to years ago that has since fallen into a state of nonenforcement is known as a "kaleidoscopic" agreement.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following regional trade blocs has the largest trade share?

Accepted Answer

A)  Mercosur 
B)  ASEAN 
C)  Andean Community 
D)  NAFTA 
A)  Mercosur 
B)  ASEAN 
C)  Andean Community 
D)  NAFTA

Question 10

In comparing the European Union and the Andean Community, the European Union has a larger trade share, but the Andean Community has a larger trade concentration ratio.

Accepted Answer

A) True 
 B)False

Question 11

Trade diversion refers to:

Accepted Answer

A)  the redistribution of incomes derived from trade between industries in a country within a regional trade bloc. 
B)  an additional amount of international trade resulting from trade preferences that a nation grants to a trading partner. 
C)  a shift in international trade caused by one nation giving trade preferences to another, which can cause trade with a third country to decline. 
D)  the movement of goods or components of goods from a country outside a regional trade bloc to one within the bloc so that the seller can benefit from trading preferences within the bloc. 
A)  the redistribution of incomes derived from trade between industries in a country within a regional trade bloc. 
B)  an additional amount of international trade resulting from trade preferences that a nation grants to a trading partner. 
C)  a shift in international trade caused by one nation giving trade preferences to another, which can cause trade with a third country to decline. 
D)  the movement of goods or components of goods from a country outside a regional trade bloc to one within the bloc so that the seller can benefit from trading preferences within the bloc.

Question 12

In order to measure how regional trade arrangements affect the intensity of trade patterns within only the affected regions, one should examine:

Accepted Answer

A)  trade concentration ratios. 
B)  regional trade shares. 
C)  World Trade Organization enforcement actions. 
D)  GATT and GATS compliance rates. 
A)  trade concentration ratios. 
B)  regional trade shares. 
C)  World Trade Organization enforcement actions. 
D)  GATT and GATS compliance rates.

Question 13

Regionalism refers to establishment of trading agreements among geographic groupings of nations.

Accepted Answer

A) True 
 B)False

Question 14

Trade deflection refers to

Accepted Answer

A)  the redistribution of incomes derived from trade between industries in a country within a regional trade bloc. 
B)  an additional amount of international trade resulting from trade preferences that a nation grants to a trading partner. 
C)  a shift in international trade caused by one nation giving trade preferences to another, which can cause trade with a third country to decline. 
D)  the movement of goods or components of goods from a country outside a regional trade bloc to one within the bloc so that the seller can benefit from trading preferences within the bloc. 
A)  the redistribution of incomes derived from trade between industries in a country within a regional trade bloc. 
B)  an additional amount of international trade resulting from trade preferences that a nation grants to a trading partner. 
C)  a shift in international trade caused by one nation giving trade preferences to another, which can cause trade with a third country to decline. 
D)  the movement of goods or components of goods from a country outside a regional trade bloc to one within the bloc so that the seller can benefit from trading preferences within the bloc.

Question 15

A customs union is a trading arrangement that entails eliminating barriers to trade among participating nations and common barriers to trade with other countries outside the group.

Accepted Answer

A) True 
 B)False

Question 16

Regulations governing conditions under which products are eligible for trading preferences under trade agreements are called:

Accepted Answer

A)  rules of origin. 
B)  rules of multilateralism. 
C)  GATT rules. 
D)  GATS rules. 
A)  rules of origin. 
B)  rules of multilateralism. 
C)  GATT rules. 
D)  GATS rules.

Question 17

A preferential trade arrangement is a trade agreement that removes all barriers to trade among participating nations.

Accepted Answer

A) True 
 B)False

Question 18

Trade creation refers to:

Accepted Answer

A)  the redistribution of incomes derived from trade between industries in a country within a regional trade bloc. 
B)  an additional amount of international trade resulting from trade preferences that a nation grants to a trading partner. 
C)  a shift in international trade caused by one nation giving trade preferences to another, which can cause trade with a third country to decline. 
D)  the movement of goods or components of goods from a country outside a regional trade bloc to one within the bloc so that the seller can benefit from trading preferences within the bloc. 
A)  the redistribution of incomes derived from trade between industries in a country within a regional trade bloc. 
B)  an additional amount of international trade resulting from trade preferences that a nation grants to a trading partner. 
C)  a shift in international trade caused by one nation giving trade preferences to another, which can cause trade with a third country to decline. 
D)  the movement of goods or components of goods from a country outside a regional trade bloc to one within the bloc so that the seller can benefit from trading preferences within the bloc.

Question 19

A Canadian appliance manufacturer locates an assembly plant in Bolivia to gain Andean Community trade preferences on sales of the completed product in Colombia, even though the Bolivian plant operates at higher cost than the Canadian assembly plant. This is an example of:

Accepted Answer

A)  trade redistribution. 
B)  trade deflection. 
C)  trade creation. 
D)  trade diversion. 
A)  trade redistribution. 
B)  trade deflection. 
C)  trade creation. 
D)  trade diversion.

A "paper" regional trade agreement:

NAFTA resulted in more significant changes in trade patterns in Mexico and Canada than in the United States.

Which of the following regional trade blocs has the largest trade concentration ratio?

Preferential trade arrangements and free trade areas are the strongest forms of trade arrangement.

The large majority of regional trade agreements cover trade in services rather than trade in physical merchandise.

One nation's flow of international trade as a percentage of a regional or global trade total is called:

A regional trade agreement negotiated and agreed to years ago that has since fallen into a state of nonenforcement is known as a "kaleidoscopic" agreement.

Which of the following regional trade blocs has the largest trade share?

In comparing the European Union and the Andean Community, the European Union has a larger trade share, but the Andean Community has a larger trade concentration ratio.

Trade diversion refers to:

In order to measure how regional trade arrangements affect the intensity of trade patterns within only the affected regions, one should examine:

Regionalism refers to establishment of trading agreements among geographic groupings of nations.

Trade deflection refers to

A customs union is a trading arrangement that entails eliminating barriers to trade among participating nations and common barriers to trade with other countries outside the group.

Regulations governing conditions under which products are eligible for trading preferences under trade agreements are called:

A preferential trade arrangement is a trade agreement that removes all barriers to trade among participating nations.

Trade creation refers to:

A Canadian appliance manufacturer locates an assembly plant in Bolivia to gain Andean Community trade preferences on sales of the completed product in Colombia, even though the Bolivian plant operates at higher cost than the Canadian assembly plant. This is an example of:

Understanding the Global Economy

Comparative Advantage: How Nations Can Gain From International Trade

Sources of Comparative Advantage

Regulating International Trade: Trade Policies and Their Effects

Balance of Payments and Foreign Exchange Markets

Exchange Rate Systems: Past to Present

The Power of Arbitrage: Purchasing Power and Interest Rate Parities

Global Money and Banking: Where Central Banks Fit Into the World Economy

Contemporary Global Economic Issues and Policies

Economic Development

Industrial Structure and Trade in the Global Economy: Businesses Without Borders

The Public Sector in the Global Economy

Dealing With Financial Crises: Does the World Need a New International Financial Architecture

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Exam 5: Regionalism and Multilateralism

A "paper" regional trade agreement:

NAFTA resulted in more significant changes in trade patterns in Mexico and Canada than in the United States.

Which of the following regional trade blocs has the largest trade concentration ratio?

Preferential trade arrangements and free trade areas are the strongest forms of trade arrangement.

The large majority of regional trade agreements cover trade in services rather than trade in physical merchandise.

One nation's flow of international trade as a percentage of a regional or global trade total is called:

A regional trade agreement negotiated and agreed to years ago that has since fallen into a state of nonenforcement is known as a "kaleidoscopic" agreement.

Which of the following regional trade blocs has the largest trade share?

In comparing the European Union and the Andean Community, the European Union has a larger trade share, but the Andean Community has a larger trade concentration ratio.

Trade diversion refers to:

In order to measure how regional trade arrangements affect the intensity of trade patterns within only the affected regions, one should examine:

Regionalism refers to establishment of trading agreements among geographic groupings of nations.

Trade deflection refers to

A customs union is a trading arrangement that entails eliminating barriers to trade among participating nations and common barriers to trade with other countries outside the group.

Regulations governing conditions under which products are eligible for trading preferences under trade agreements are called:

A preferential trade arrangement is a trade agreement that removes all barriers to trade among participating nations.

Trade creation refers to:

A Canadian appliance manufacturer locates an assembly plant in Bolivia to gain Andean Community trade preferences on sales of the completed product in Colombia, even though the Bolivian plant operates at higher cost than the Canadian assembly plant. This is an example of:

Understanding the Global Economy

Comparative Advantage: How Nations Can Gain From International Trade

Sources of Comparative Advantage

Regulating International Trade: Trade Policies and Their Effects

Balance of Payments and Foreign Exchange Markets

Exchange Rate Systems: Past to Present

The Power of Arbitrage: Purchasing Power and Interest Rate Parities

Global Money and Banking: Where Central Banks Fit Into the World Economy

Contemporary Global Economic Issues and Policies

Economic Development

Industrial Structure and Trade in the Global Economy: Businesses Without Borders

The Public Sector in the Global Economy

Dealing With Financial Crises: Does the World Need a New International Financial Architecture

Filters