Deck 8: Regional Economic Integration

Question 1

The greatest benefit of regional integration is trade diversion.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

The European Parliament fulfills its role of adopting European Union law by debating and amending legislation.

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

A common market requires that member nations harmonize their tax,monetary,and fiscal policies,and that they create a common currency.

Question 9

The goal of the Single European Act was to reduce the ability of European companies to compete against companies from Japan and North America.

Question 10

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

Question 11

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

Question 12

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

Question 13

The Council of the European Union (EU)is the legislative body of the EU.

Question 14

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

Question 15

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

Question 16

In regional economic integration,industries requiring mostly unskilled labour will tend to shift production to low-wage nations within a trading bloc.

Question 17

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

Question 18

In a free trade area,each country is able to maintain whatever policy it sees fit against non-member countries.

Question 19

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

Question 20

A political union requires nations to accept a common stance on all economic and political policies within their territories.

Question 21

Under NAFTA terms,Canada must make majority of its natural gas supplies available for export to the United States.

Question 22

European Free Trade Association (EFTA)consists of four countries that were reluctant to join the EU.

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

Indonesia,Malaysia,the Philippines,Singapore,and Thailand formed the Association of Southeast Asian Nations (ASEAN)in 1967.

Question 25

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

A)regional trade area
B)regional market
C)regional trading bloc
D)foreign direct investment bloc

Question 26

Nations undergoing economic integration desire to accomplish each of the following EXCEPT ________.

A)increase cross-border investment
B)raise living standards for their people
C)increase cross-border trade
D)establish unified government

Question 27

The Caribbean Community and Common Market (CARICOM)was formed in 1961 as a common market between Costa Rica,El Salvador,Guatemala,Honduras,and Nicaragua.

Question 28

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

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

Question 29

Canada and the European Union successfully concluded a free trade agreement in 2013.

Question 30

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

Question 31

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

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

Question 32

Which of the following is the lowest level of regional integration?

A)Free trade area
B)Political union
C)Common market
D)Customs union

Question 33

The Southern Common Market is also referred to as MERCOSUR.

Question 34

Which of the following is NOT a potential goal of regional economic integration?

A)Protection of intellectual property rights
B)Reduced environment degradation
C)Creation of a political union
D)Reduced cross-border investment

Question 35

The European Union (EU)and European Free Trade Association (EFTA)created the European Economic Area to cooperate on matters such as the free movement of goods,persons,services,and capital.

Question 36

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

Question 37

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

Question 38

NAFTA does not include provisions for environmental protection.

Question 39

NAFTA is a good example of trade diversion.

Question 40

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

A)regional economic integration
B)region-first policy
C)intra-nation pact
D)trade union

Question 41

Which of the following requires nations to give up the least amount of sovereignty?

A)Economic union
B)Common market
C)Free trade area
D)Political union

Question 42

________ represents the greatest degree of regional integration.

A)economic union
B)political union
C)common market
D)customs union

Question 43

The Treaty of Rome aimed at establishing common policies among member nations for ________.

A)textiles and retail goods
B)transportation and agriculture
C)metal and cyclical products
D)meat products and telecommunications

Question 44

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 non-member nations in a similar manner
D)accept a common stance on economic and political policies regarding non-member nations

Question 45

The most sophisticated and advanced example of regional integration today is occurring in which of the following?

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

Question 46

In 1951,Belgium,France,West Germany,Italy,Luxembourg,and the Netherlands created the ________.

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

Question 47

________ 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 48

Integration whereby countries coordinate aspects of their economic and political systems is called a(n)________.

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

Question 49

Studies of the Southern Common Market (MERCOSUR)found that the net effect of the agreement was ________.

A)trade diversion
B)trade creation
C)slower trade
D)regional inflation

Question 50

All of the following are true of trade diversion EXCEPT that it ________.

A)is the opposite of trade creation
B)can unintentionally reward a less-efficient producer within the trading bloc
C)can increase prices of products
D)guarantees consumers a wider selection of goods

Question 51

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 52

Economic integration whereby countries remove barriers to trade and the movement of labour and capital,erect a common trade policy against non-members,and coordinate their economic policies is called a(n)________.

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

Question 53

Which of the following created the European Economic Community?

A)The Treaty of Rome
B)The Maastricht Treaty
C)The Single European Act
D)The Paris Treaty

Question 54

Economic integration whereby countries remove all barriers to trade and the movement of labour and capital between themselves and erect a common trade policy against non-members is called a(n)________.

A)economic union
B)customs union
C)common market
D)political union

Question 55

Higher levels of trade between nations result in all of the following EXCEPT ________.

A)greater standardization
B)increased efficiency
C)greater consumption
D)higher standards of living

Question 56

A group of nations currently taking steps toward political union is ________.

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

Question 57

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

A)trade diversion
B)trade restriction
C)trade creation
D)trade embargo

Question 58

Which of the following is NOT a result of trade creation?

A)Lower costs tend to lead to higher demand for goods.
B)Buyers can acquire goods and services at lower cost.
C)Consumers are faced with a wider selection of goods.
D)Imported goods are available at higher prices.

Question 59

Canada and the United States are early examples of ________.

A)customs unions
B)free trade areas
C)economic unions
D)political unions

Question 60

All of the following are potential drawbacks of regional integration EXCEPT ________.

A)loss of national sovereignty
B)shifts in employment
C)trade diversion
D)greater consensus

Question 61

Conducting successful business in Mexico requires all of the following EXCEPT __________.

A)building personal relationships
B)behaving in a casual manner in all situations
C)finding a local partner
D)hiring a local lawyer

Question 62

NAFTA has not expanded beyond the original three countries due to _____.

A)lack of interest from other countries
B)difficulties between the original three members
C)differences in cultures from interested countries
D)opposition groups and political obstacles

Question 63

Which of the following countries is expected to have difficult negotiations regarding its application for European Union membership?

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

Question 64

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

A)Supreme Court
B)court of appeals
C)small-claims court
D)capital crimes court

Question 65

Which of the following countries is NOT a member of the North American Free Trade Agreement (NAFTA)?

A)Mexico
B)United States
C)Chile
D)Canada

Question 66

Which of the following is NOT a member of European Free Trade Association today?

A)Sweden
B)Liechtenstein
C)Norway
D)Switzerland

Question 67

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)European currency exchange

Question 68

All of the following are true of the euro EXCEPT that it ________.

A)eliminates exchange rate risk for business deals between members
B)reduces transaction costs by eliminating the cost of converting currencies
C)makes prices between markets more transparent
D)is not accepted among merchants in France,Germany,and Italy

Question 69

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

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

Question 70

The Maastricht Treaty did all of the following EXCEPT ________.

A)call for a common currency
B)establish targets for monetary union
C)call for political union of member nations
D)call for a customs union of member nations

Question 71

The EU's goals of removing trade barriers,increasing harmonization,and enhancing the competitiveness of European companies were put forward in which of the following?

A)Maastricht Treaty
B)European Monetary Union
C)Single European Act
D)Copenhagen Criteria

Question 72

Which of the following European Union countries opted out of transition to the euro?

A)Norway
B)Sweden
C)Switzerland
D)Finland

Question 73

The ________ called for banking in a single common currency,setting up monetary and fiscal targets for countries taking part in monetary union,and political union of member nations.

A)Maastricht Treaty
B)European Monetary Union
C)Single European Act
D)Copenhagen Criteria

Question 74

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

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

Question 75

Today,the number of European Union (EU)members stands at ________.

A)8
B)13
C)27
D)18

Question 76

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

A)eurofranc
B)eurodollar
C)euro
D)euromark

Question 77

The largest market for US exports today is _____________.

A)China
B)Canada
C)Mexico
D)South Korea

Question 78

What does the "proportional sharing provision" of NAFTA mean to Canada?

A)United States and Mexico will share their natural resources with Canada.
B)Mexican natural resources will be processes in part by Canadian manufacturers.
C)Two-thirds of Canadian oil needs to be available for export to the United States.
D)Half of Canada's lumber exports will go to forest poor Mexico.

Question 79

All of the following institutions play important roles in monitoring and enforcing economic and political integration in the European Union EXCEPT the ________.

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

Question 80

The North American Free Trade Agreement comprises a market of ________ consumers.

A)120 million
B)220 million
C)320 million
D)450 million