QUESTION Which of the following supports the economic case for regional economic integration? A. International institutions such as the World Trade Organization have been moving the world away from a free trade regime. B. The greater the number of countries involved in a free trade agreement, the fewer the perspectives that must be reconciled. C. […]
QUESTION Which of the following is true of the political case for regional economic integration? A. Linking neighboring economies increases the potential for violent conflict. B. Free trade stimulates economic growth, which creates dynamic gains from trade. C. Making neighboring economies increasingly dependent on each other fails to create incentives for political cooperation. D. Countries […]
QUESTION Which of the following is true with regard to a free trade area? A. Factors of production are allowed to move freely between member nations. B. Each member country is allowed to determine its own trade policies with regard to nonmembers. C. Member nations are required to have a common currency. D. Member nations […]
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
