Deck 8: Regional Economic Integration

Question 1

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

Answer 1

False

Question 2

The greatest benefit of regional integration is trade diversion.

Answer 2

False

Question 3

A result of trade creation is that buyers pay higher prices for imported goods and services after trade barriers are removed.

Answer 3

False

Question 4

The Single European Act predominantly aimed at establishing common transportation policies among the European Union members.

Question 5

A common market requires that member nations create a common currency.

Question 6

A common market area is the greatest extent of national integration.

Question 7

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

Question 8

A political union makes it mandatory for nations to accept a common stance on all economic and political policies within their territories.

Question 9

In a free trade area,each country can maintain whatever policy it sees fit against nonmember countries.

Question 10

The increase in the level of trade between nations that results from regional economic integration is called trade creation.

Question 11

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

Question 12

Canada and the United States are early examples of political unions.

Question 13

The Maastricht Treaty called for political union of the member nations.

Question 14

Trade agreements allow competitors from other nations to enter the domestic market.

Question 15

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

Question 16

A group of nations in a geographic region undergoing economic integration is called a regional trading bloc.

Question 17

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

Question 18

Ombudsman and Data Protection Supervisor are the EU institutions that fulfill secondary and support roles.

Question 19

The Council of the European Union is the executive body of the EU.

Question 20

Countries belonging to a free trade area must concede a certain amount of their national autonomy to the supranational union of which they are a part.

Question 21

Regional economic integration is also referred to as ________.

A)mercantilism
B)nationalism
C)protectionism
D)regionalism

Question 22

Economic integration whereby countries remove all barriers to trade among themselves,but set a common trade policy against nonmembers is called a(n)________.

A)preferential trade area
B)customs union
C)economic nationalism
D)free trade area

Question 23

The primary purpose of the Gulf Cooperation Council (GCC)at its formation was to create a political union between Iraq and Iran.

Question 24

A group of nations in a geographic area undergoing economic integration is called a ________.

A)born global firm
B)maquiladora
C)regional trading bloc
D)Eurocurrency market

Question 25

The European Free Trade Association focuses on trade in consumer goods.

Question 26

The European Union (EU)and European Free Trade Association (EFTA)created the European Economic Area (EEA).

Question 27

Economic integration whereby countries remove all barriers to trade among themselves,but each country determines its own barriers against nonmembers,is called a(n)________.

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

Question 28

Today,the Southern Common Market acts as a political union.

Question 29

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

Question 30

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

Question 31

The stated aim of Asia Pacific Economic Cooperation (APEC)is to strengthen the multilateral trading system.

Question 32

The main difference between a free trade area and a customs union is that the members of a customs union ________.

A)agree to the free movement of all factors of production
B)harmonize their tax,monetary,and fiscal policies and create a common currency
C)agree to treat trade with all nonmember nations in a similar manner
D)accept a common stance on economic and political policies regarding nonmember nations

Question 33

Countries belonging to a ________ maintain whatever policies they see fit against nonmember countries.

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

Question 34

Which of the following is an important goal of regional economic integration?

A)to increase the selling prices of products
B)to raise the living standards of people
C)to limit the choice of products available to customers
D)to establish a socialist government

Question 35

Which of the following is the greatest extent of regional economic integration?

A)free trade area
B)political union
C)common market
D)customs union

Question 36

Which of the following is the lowest extent of regional economic integration?

A)free trade area
B)political union
C)common market
D)customs union

Question 37

The Southern Common Market is also referred to as MERCOSUR.

Question 38

The North American Free Trade Agreement membership includes Canada,Mexico,and the United States.

Question 39

The main difficulty CARICOM will continue to face is that most members trade more with nonmembers than they do with each other.

Question 40

The process whereby countries in a geographic area cooperate with one another to reduce or eliminate barriers to the international flow of products,people,or capital is called ________.

A)regional economic integration
B)protectionism
C)mercantilism
D)economic nationalism

Question 41

Which of the following treaties was signed by the members of the European Coal and Steel Community in 1957 for creating the European Economic Community?

A)the Treaty of Rome
B)the Maastricht Treaty
C)the Treaty of Paris
D)the Treaty of Versailles

Question 42

Which of the following is true of trade diversion?

A)It increases the purchasing power of consumers.
B)It increases the level of trade between nonmember nations.
C)It generally increases the prices of products in a nation.
D)It guarantees consumers a wider selection of goods.

Question 43

The ________ called for banking in a single common currency,setting up of monetary and fiscal targets,and political union of the European Union members.

A)Maastricht Treaty
B)European monetary union
C)Single European Act
D)Copenhagen Criteria

Question 44

Currently the most sophisticated and advanced example of regional integration is occurring in ________.

A)Asia
B)Europe
C)North America
D)Africa

Question 45

Economic integration whereby countries remove barriers to trade and the movement of labor and capital among members,set a common trade policy against nonmembers,and coordinate their economic policies is called a(n)________.

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

Question 46

Higher levels of trade between nations result in ________.

A)higher product prices
B)lesser specialization
C)greater purchasing power
D)trade diversion

Question 47

________ require that member countries concede a certain amount of their national autonomy to the supranational union of which they are a part.

A)Free trade areas
B)Customs unions
C)Economic unions
D)Preferential trade areas

Question 48

An increase in the level of trade among nations that results from regional economic integration is called ________.

A)trade diversion
B)mercantilism
C)trade creation
D)economic nationalism

Question 49

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

A)economic union
B)common market
C)free trade area
D)political union

Question 50

The European Union plan that established its own central bank and currency in January 1999 is known as the ________.

A)Single European Act
B)European monetary union
C)Copenhagen Criteria
D)Southern Common Market

Question 51

Which of the following is true of the euro?

A)It increases exchange-rate risk for business deals between member nations.
B)It increases transaction costs.
C)It makes prices between markets more transparent.
D)It is not accepted among merchants in France,Germany,and Italy.

Question 52

Economic integration whereby countries remove all barriers to trade and the movement of labor and capital between themselves and set a common trade policy against nonmembers is called a ________.

A)free trade area
B)customs union
C)common market
D)preferential trade area

Question 53

Which of the following is a potential drawback of regional economic integration?

A)ethnocentricity
B)trade diversion
C)economic nationalism
D)protectionism

Question 54

The common currency of the European Union is known as the ________.

A)European currency unit
B)eurodollar
C)euro
D)European unit of account

Question 55

Which of the following is a result of trade creation?

A)The demand for goods tends to increase.
B)Purchasing power of consumers decreases.
C)Consumers have a limited choice for selection of goods.
D)Imported goods are seldom available at lower prices.

Question 56

In 1951,Belgium,France,West Germany,Italy,Luxembourg,and the Netherlands signed the Treaty of Paris and created the ________.

A)European Union
B)European Economic Community
C)European Coal and Steel Community
D)European Community

Question 57

A(n)________ requires member nations to harmonize their tax,monetary,and fiscal policies and create a common currency.

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

Question 58

Which of the following materialized the EU's goals of removing trade barriers,increasing harmonization,and enhancing the competitiveness of European companies?

A)the Maastricht Treaty
B)the European monetary union
C)the Single European Act
D)the Copenhagen Criteria

Question 59

Which of the following countries has been facing difficulties in negotiations regarding its application for European Union membership?

A)Bulgaria
B)Czech Republic
C)Romania
D)Turkey

Question 60

For countries to become members of the European Union,they have to meet certain demands laid down by the EU referred to as the ________.

A)Copenhagen Criteria
B)Closer Economic Relations Agreement
C)Andean Community
D)Euro-Plus Pact

Question 61

Today,the Southern Common Market (MERCOSUR)acts as a(n)________.

A)economic union
B)political union
C)customs union
D)preferential trading area

Question 62

ALADI refers to the ________.

A)Latin American Integration Association
B)Association of Southeast Asian Nations
C)Asia Pacific Economic Cooperation
D)Latin American Free Trade Association

Question 63

The Council of the European Union is the ________ body of the European Union.

A)legislative
B)executive
C)judicial
D)monitoring

Question 64

Which of the following countries is a member of the North American Free Trade Agreement (NAFTA)?

A)Costa Rica
B)Honduras
C)Venezuela
D)Canada

Question 65

The European Commission is the ________ body of the European Union.

A)legislative
B)executive
C)financial
D)monitoring

Question 66

The ________ was established in 2006 between the United States and Costa Rica,El Salvador,Guatemala,Honduras,Nicaragua,and later the Dominican Republic.

A)NAFTA
B)LAFTA
C)CAFTA-DR
D)CAN

Question 67

The European Free Trade Association was formed in 1960 to focus on trade in ________.

A)consumer goods
B)agricultural goods
C)industrial goods
D)services

Question 68

In today's world,the Andean Community is best described as an incomplete ________.

A)free-trade area
B)customs union
C)economic union
D)political union

Question 69

The common market between Costa Rica,El Salvador,Guatemala,Honduras,and Nicaragua is referred to as the ________.

A)Latin American Integration Association
B)Central American Common Market
C)Andean Community
D)Southern Common Market

Question 70

While ________ encourages free trade among Canada,Mexico and the United States,manufacturers and distributors must abide by local content requirements and rules of origin.

A)NAFTA
B)LAFTA
C)CAN
D)CAFTA-DR

Question 71

Which of the following is currently a member of the European Free Trade Association?

A)Slovakia
B)Ireland
C)Norway
D)Italy

Question 72

Which of the following statements is true of NAFTA?

A)It introduced a common currency for trade between the U.S.,Mexico and Canada.
B)It overrode the local content requirements and rules of origin for products manufactured in the member nations.
C)It eliminated all tariffs and nontariff trade barriers on goods originating from within North America.
D)It called for stringent rules regarding government procurement practices and the imposition of countervailing duties.

Question 73

No proposed legislation becomes EU law unless the ________ votes it into law.

A)Council of the European Union
B)European Parliament
C)Court of Auditors
D)European Commission

Question 74

Which of the following institutions is least likely to play an important role in monitoring and enforcing economic and political integration in the European Union?

A)European Parliament
B)Council of the European Union
C)European Court of Human Rights
D)European Commission

Question 75

The main objectives of the Andean Community include ________.

A)introduction of tariffs for trade among member countries
B)separate policies in both transportation and certain industries
C)a common external tariff
D)a common currency

Question 76

The main challenge facing the Caribbean Community and Common Market (CARICOM)is that ________.

A)the bloc has not yet signed an agreement calling for a single market
B)military conflicts continue to hamper efforts to move toward political union
C)most members trade more with nonmembers than they do with each other
D)the bloc has had no success in persuading Chile to become a member

Question 77

The Court of Justice is the ________ of the European Union.

A)court of honor
B)court of appeals
C)small-claims court
D)arbitral tribunal

Question 78

Which of the following is best classified as an economic union?

A)Southern Common Market (MERCOSUR)
B)European Union (EU)
C)North American Free Trade Agreement (NAFTA)
D)Andean Community

Question 79

Which of the following countries of the Central American Common Market has adopted the U.S.dollar as its official currency?

A)El Salvador
B)Honduras
C)Nicaragua
D)Costa Rica

Question 80

The main purpose of the ________ is to debate and amend legislation proposed by the European Commission of the EU.

A)European Parliament
B)Council of the European Union
C)Court of Auditors
D)Court of Justice