QUESTION In a free trade area, all barriers to the trade of goods and services among member countries are removed and a common external trade policy is adopted. Indicate whether the statement is true or false. ANSWER FALSE In a free trade area, all barriers to the trade of goods and services among member […]
Date: September 3rd, 2020
QUESTION A common market has no barriers to trade among member countries, includes a common external trade policy, and allows factors of production to move freely among members. Indicate whether the statement is true or false. ANSWER TRUE A common market has no barriers to trade between member countries, includes a common external trade […]
Date: September 3rd, 2020
QUESTION A political union addresses the issue of how to make a coordinating bureaucracy accountable to the citizens of member nations of an economic union. Indicate whether the statement is true or false. ANSWER TRUE The move toward economic union raises the issue of how to make a coordinating bureaucracy accountable to the citizens […]
Date: September 3rd, 2020
QUESTION The emphasis of the European Free Trade Association has been on free trade in consumer goods. Indicate whether the statement is true or false. ANSWER FALSE The emphasis of the European Free Trade Association (EFTA) has been on free trade in industrial goods. Agriculture was left out of the arrangement, each member being […]
Date: September 3rd, 2020
QUESTION In a customs union, a common currency is adopted. Indicate whether the statement is true or false. ANSWER FALSE A customs union eliminates trade barriers between member countries and adopts a common external trade policy. Establishment of a common external trade policy necessitates significant administrative machinery to oversee trade relations with nonmembers. It […]
Date: September 3rd, 2020
QUESTION Economic theories suggest that free trade and investment is a positive-sum game, in which all participating countries stand to gain. Indicate whether the statement is true or false. ANSWER TRUE Economic theories of international trade predict that unrestricted free trade will allow countries to specialize in the production of goods and services that […]
Date: September 3rd, 2020
QUESTION Which of the following is a major type of foreign investment risk that is insurable through government-backed programs? A. Lack of funds B. Risk of transaction loss C. Poor strategic tie-ups D. Risks of expropriation E. Losses due to natural calamities ANSWER D
Date: September 3rd, 2020
QUESTION In terms of regional economic integration, linking neighboring economies and making them increasingly dependent on each other create incentives for political cooperation between the neighboring states. Indicate whether the statement is true or false. ANSWER TRUE The political case for regional economic integration also has loomed large in several attempts to establish free […]
Date: September 3rd, 2020
QUESTION Offshore production refers to FDI undertaken: A. to focus on extractive industries, such as oil and gas. B. to serve the home market. C. in shipping industries. D. to decrease the prices of products in the host countries. E. to capture tax benefits in the host country. ANSWER B
Date: September 3rd, 2020
QUESTION Some economists have pointed out that the benefits of regional integration are determined by the extent of trade diversion, as opposed to trade creation. Indicate whether the statement is true or false. ANSWER FALSE Some economists have expressed concern that the benefits of regional integration have been oversold, while the costs have often […]
Date: September 3rd, 2020
