QUESTION Which of the following is a major consideration that underlay the establishment of the European Community? A. The pressing need to have a common currency that would make trade between European and non-European countries easier B. The need for a united Europe to deal with the United States and the politically alien Soviet Union […]
QUESTION 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? A. Free trade area B. Command economy C. Efficient market D. Foreign exchange market E. Location economy ANSWER A
QUESTION Which of the following occurs when high-cost domestic producers are replaced by low-cost producers within a free trade area? A. Value creation B. Strategic pricing C. Trade creation D. Trade diversion E. Economic exposure Trade creation occurs when ANSWER C
QUESTION Which of the following is the economic level corresponding to the least integration? A. A free trade area B. A customs union C. A common market D. An economic union E. A political union ANSWER A
QUESTION Which of the following are the two impediments to regional economic integration? A. Labor activism and political ideologies B. Immigration and political ideologies C. Costs and national sovereignty D. Political will and popular support E. Political ideologies and international policies ANSWER C
QUESTION Where has the movement toward regional economic integration been most successful? A. Africa B. South America C. North America D. Europe E. Asia ANSWER D
QUESTION Which of the following occurs when lower-cost external suppliers are replaced by higher-cost suppliers within a free trade area? A. Trade creation B. Strategic pricing C. Synergy D. Trade diversion E. Protectionism ANSWER D
QUESTION Three countries 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 […]
QUESTION Which of the following is true of the European Free Trade Association (EFTA)? A. The emphasis of EFTA has been on free trade in agricultural goods. B. Industrial goods were left out of the trade arrangement, each member being allowed to determine its own level of support. C. Members cannot determine the level of […]
QUESTION Which of the following are the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements? A. Licensing agreements B. Economic unions C. Common markets D. Free trade agreements E. Political unions ANSWER D
