Question 1

Which of the following selections accurately depicts the levels of economic integration from least integrated to most integrated?

Accepted Answer

A)  Common market, economic union, full political union, free trade area, and customs union
B)  Free market, economic union, full political union, free trade area, and customs union
C)  Free trade area, customs union, common market, economic union, and full political union
D)  Full political union, free trade area, common market, customs union, and economic union
E)  Free trade area, common market, customs union, economic union, and full political union

Question 2

The initial principles of The Andean Group included all of the following except

Accepted Answer

A)  internal tariff reduction program.
B)  common external tariff.
C)  transportation policy.
D)  common currency among member nations.
E)  common industrial policy

Question 3

The European Union is the product of two political factors.The devastation of two world wars on Western Europe and

Accepted Answer

A)  the European nations' desire to hold their own on the world's political and economic stage.
B)  the unawareness of potential economic benefits.
C)  the removal of barriers to other countries.
D)  the emergence of an economic superpower.
E)  the threat of Soviet aggression

Question 4

Which of the following is not an attribute of an economic union?

Accepted Answer

A)  Political union
B)  Common currency
C)  Harmonization of members' tax rates
D)  Free flow of products and factors of production between member countries
E)  Common external trade policy

Question 5

A common market includes all of the following characteristics except

Accepted Answer

A)  factors of production are allowed to move freely between members.
B)  there are no restrictions on immigration between members.
C)  full economic integration.
D)  there are no restrictions on the cross-border flow of capital between members.
E)  a common external trade policy

Question 6

A _____________ will benefit the world only if the amount of trade it creates exceeds the amount it diverts.

Accepted Answer

A)  regional free trade agreement
B)  trade diversion
C)  trade synergy
D)  trade creation
E)  trade development

Question 7

No other attempt at regional integration comes close to(the)  ______________ in its boldness or its potential implications for the world economy.

Accepted Answer

A)  EU
B)  NAFTA
C)  Andean Pact
D)  MERCOSUR
E)  APEC

Question 8

According to our textbook, the move to a single currency in Europe should

Accepted Answer

A)  have no effect on the cost of doing business in Europe.
B)  significantly increase the cost of doing business in Europe.
C)  significantly decrease the cost of doing business in Europe.
D)  moderately increase the cost of doing business in Europe for North American nations, and significantly increase the cost of doing business in the EU for the rest of the world.
E)  increase the cost of doing business with Europe

Question 9

Throughout the more recent years, the European Commission's role in competition policy has become less important.

Accepted Answer

A) True 
 B)False

Question 10

The principle argument of those that opposed NAFTA centered around the fear that ratification would result in:

Accepted Answer

A)  higher interest rates in the U.S.
B)  many Canadian and U.S.jobs transferred to Mexico
C)  the move towards a common currency for NAFTA member nations
D)  retaliation from the European Union
E)  devalued currencies

Question 11

The initial response by politicians to the actual and impending changes in the competitive environment of the European energy industry was

Accepted Answer

A)  encouragment
B)  opposition
C)  to speed integration
D)  to defeat the EU
E)  concern over more competition

Question 12

Which of the following statements is true in regard to economic unions?

Accepted Answer

A)  The NAFTA is the only successful economic union in the world today
B)  The popularity of economic unions has increased over the years, and there are now more than 10 Successful economic unions in existence
C)  The EU is the only successful economic union in the world today
D)  There are no true economic unions in the world today
E)  The EU has decided to limit the strength of the economic union

Question 13

According to the textbook, one likely short-term effect of NAFTA will be that many U.S.and Canadian firms will move some production to Mexico to take advantage of

Accepted Answer

A)  cheaper transportation costs.
B)  lower interest rates.
C)  lower labour costs.
D)  a higher skilled labour force.
E)  the Mexican market

Question 14

The European Free Trade Association's emphasis has been on free trade in

Accepted Answer

A)  services.
B)  agricultural products.
C)  industrial goods.
D)  consumer goods.
E)  capital

Question 15

The United States, Japan, and China are among 18 members of a trade organization referred to as

Accepted Answer

A)  AAFTC (American Asian Free Trade Congress) .
B)  APEC (Asia Pacific Economic Cooperation) .
C)  USAEU (United States Asian Economic Union) .
D)  ANAEPC (Asian-North American Economic and Political Coop) .
E)  SEATO (South East Asia Treaty Organization)

Question 16

______________ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.

Accepted Answer

A)  Trade alteration
B)  Trade qualification
C)  Trade diversion
D)  Trade creation
E)  Trade diversification

Question 17

The original forerunner of the EU, the __________ was formed in 1951 by Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands.

Accepted Answer

A)  European Union
B)  European Coal and Steel Community
C)  European Agricultural and Energy Union
D)  European Textiles and Agricultural Community
E)  European Community

Question 18

The _______________, which is playing an even more important role in the EU, has been directly elected by citizens of the EU countries since the late 1970s.

Accepted Answer

A)  North Atlantic Parliament
B)  North Atlantic Trade Commission
C)  European Parliament
D)  European Trade Commission
E)  European Union Commission

Question 19

The _____________ was formed in 1969 when Bolivia, Chile, Ecuador, Columbia, and Peru signed the Cartagena Agreement.

Accepted Answer

A)  Andean Pact
B)  Bolivian Pact
C)  NW South America Group
D)  South American Federation of Independent States
E)  Cartagena Pact

Question 20

The European Committee has been directly elected by citizens of the EU countries since the late 1970s.

Accepted Answer

A) True 
 B)False

Exam 8: Regional Economic Integration

The principle argument of those that opposed NAFTA centered around the fear that ratification would result in:

Correct AnswerverifiedShow Answer

Which of the following selections accurately depicts the levels of economic integration from least integrated to most integrated?

Correct AnswerverifiedShow Answer

A common market includes all of the following characteristics except

Correct AnswerverifiedShow Answer

The European Union is the product of two political factors.The devastation of two world wars on Western Europe and

Correct AnswerverifiedShow Answer

The United States, Japan, and China are among 18 members of a trade organization referred to as

Correct AnswerverifiedShow Answer

The initial response by politicians to the actual and impending changes in the competitive environment of the European energy industry was

Correct AnswerverifiedShow Answer

The original forerunner of the EU, the __________ was formed in 1951 by Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands.

Correct AnswerverifiedShow Answer

The _____________ was formed in 1969 when Bolivia, Chile, Ecuador, Columbia, and Peru signed the Cartagena Agreement.

Correct AnswerverifiedShow Answer

A _____________ will benefit the world only if the amount of trade it creates exceeds the amount it diverts.

Correct AnswerverifiedShow Answer

The European Free Trade Association's emphasis has been on free trade in

Correct AnswerverifiedShow Answer

Throughout the more recent years, the European Commission's role in competition policy has become less important.

Correct AnswerverifiedShow Answer

No other attempt at regional integration comes close to(the) ______________ in its boldness or its potential implications for the world economy.

Correct AnswerverifiedShow Answer

The European Committee has been directly elected by citizens of the EU countries since the late 1970s.

Correct AnswerverifiedShow Answer

According to the textbook, one likely short-term effect of NAFTA will be that many U.S.and Canadian firms will move some production to Mexico to take advantage of

Correct AnswerverifiedShow Answer

Which of the following is not an attribute of an economic union?

Correct AnswerverifiedShow Answer

______________ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.

Correct AnswerverifiedShow Answer

According to our textbook, the move to a single currency in Europe should

Correct AnswerverifiedShow Answer

The initial principles of The Andean Group included all of the following except

Correct AnswerverifiedShow Answer

The _______________, which is playing an even more important role in the EU, has been directly elected by citizens of the EU countries since the late 1970s.

Correct AnswerverifiedShow Answer

Which of the following statements is true in regard to economic unions?

Correct AnswerverifiedShow Answer

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