Question 1

Advocates of NAFTA acknowledge that some U.S.and Canadian firms would move production to Mexico to take advantage of lower labor costs.How is U.S.and Canada seen to gain from this trend?

Accepted Answer

A)  Low-skilled jobs will be moved out to Mexico resulting in lowering of average wage rates in U.S.and CanadA.
B)  Increased imports from Mexico will help reduce the huge trade deficit for U.S.and Canada.
C)  Increased incomes of the Mexicans would allow them to import more U.S.and Canadian goods,thereby increasing demand.
D)  A large number of Mexican firms will outsource low-skilled workers from the U.S.

Question 2

By adopting the euro,the EU has created the second most widely traded currency in the world after that of the U.S.dollar.

Accepted Answer

A) True 
 B)False

Question 3

The Asia-Pacific Economic Cooperation (APEC)is the largest and most successful economic grouping in Asia.

Accepted Answer

A) True 
 B)False

Question 4

Suppose Country A and Country B imposed tariffs on imports from all countries,and then they set up a free trade area,scrapping all trade barriers between themselves but maintaining tariffs on imports from the rest of the world.Country A began to import sugar from Country B.Country A had previously been producing sugar at a higher cost.Which of the following has occurred?

Accepted Answer

A)  Trade creation
B)  Trade balancing
C)  Trade synergy
D)  Trade diversion

Question 5

A regional free trade agreement will benefit the world only if the amount of trade it creates exceeds the amount it diverts.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  low interest rates and high inflation in the U.S.and CanadA.
B)  mass exodus of jobs from the United States into Mexico.
C)  a move towards a common currency for NAFTA member nations.
D)  retaliation from the European Union.

Question 7

Identify the second most widely traded currency in the world.

Accepted Answer

A)  Yen
B)  British Pound
C)  Euro
D)  Saudi Dinar

Question 8

Which of the following led to the collapse of the Central American Common Market in 1969?

Accepted Answer

A)  Devaluation of the Brazilian currency by 40 percent
B)  Coup in Nicaragua that led to the overthrow of the incumbent regime
C)  War between Honduras and El Salvador
D)  Unilateral withdrawal from the arrangement by Costa Rica

Question 9

Which term is used to refer to 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?

Accepted Answer

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

Question 10

Which EU institution is composed of one representative from the government of each member state,and whose membership depends on the topic being discussed?

Accepted Answer

A)  Court of Justice
B)  European Council
C)  European Commission
D)  European Parliament

Question 11

A pan-European,euro-dominated capital market effectively decreases the range of investment options open to both individuals and institutions.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a major consideration that led to the establishment of the European Community?

Accepted Answer

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.
C)  The economic lessons from the Great Depression that hit the United States in the 1920s.
D)  The spectacular success of the European Free Trade Association (EFT
A)  formed by Western European countries in 1960.

Question 13

The votes that a country gets in the European Council are related to the size of the country.

Accepted Answer

A) True 
 B)False

Question 14

A regional free trade agreement will benefit the world only if:

Accepted Answer

A)  it raises the standard of living in one of the countries involved.
B)  the amount of trade it creates exceeds the amount it diverts.
C)  the currencies of nations involved in the agreement appreciates.
D)  the balance of trade situation remains stable in the region.

Question 15

Which of the following factors resulted in the establishment of the European Union (EU) ?

Accepted Answer

A)  The spectacular success of the North American Free Trade Agreement (NAFT
A)  .
B)  The trade impasse following the oil crisis in the 1970s that occurred due to collusion among oil producing nations.
C)  The devastation of Western Europe during two world wars and the desire for a lasting peace.
D)  The emergence of Japan as an economic and industrial superpower despite the nuclear holocaust.

Question 16

What are the primary impediments to regional economic integration?

Accepted Answer

Even though there may be a clear rationa...

Question 17

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

Accepted Answer

A)  Free trade area,customs union,common market,economic union,and political union
B)  Economic union,common market,free trade area,political union,and customs union
C)  Common market,economic union,political union,free trade area,and customs union
D)  Political union,free trade area,common market,customs union,and economic union

Question 18

_____ occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.

Accepted Answer

A)  Trade creation
B)  Trade balancing
C)  Trade synergy
D)  Trade diversion

Question 19

A major benefit of regional free trade agreements is that all parties involved end up as winners.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a major obstacle confronting the establishment of the Free Trade Area of the Americas (FTAA) ?

Accepted Answer

A)  United States wants its southern neighbors to agree to tougher enforcement of intellectual property rights and lower manufacturing tariffs.
B)  Some constituent nations insist on a common currency,an initiative that has not found support among many nations.
C)  Brazil and Argentina wants US to open up critical industries such as telecom and airlines.
D)  The move has faced stiff opposition from the two major trading blocks in the region (NAFTA and Mercosur) .

Exam 8: Regional Economic Integration

Which of the following is a major obstacle confronting the establishment of the Free Trade Area of the Americas (FTAA) ?

Correct Answer
verified

_____ occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.

Correct Answer
verified

Identify the second most widely traded currency in the world.

Correct Answer
verified

Which of the following is a major consideration that led to the establishment of the European Community?

Correct Answer
verified

A major benefit of regional free trade agreements is that all parties involved end up as winners.

Correct Answer
verified

Which of the following led to the collapse of the Central American Common Market in 1969?

Correct Answer
verified

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

Correct Answer
verified

A regional free trade agreement will benefit the world only if:

Correct Answer
verified

The votes that a country gets in the European Council are related to the size of the country.

Correct Answer
verified

Which term is used to refer to 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?

Correct Answer
verified

Correct Answer
verified

A pan-European,euro-dominated capital market effectively decreases the range of investment options open to both individuals and institutions.

Correct Answer
verified

Advocates of NAFTA acknowledge that some U.S.and Canadian firms would move production to Mexico to take advantage of lower labor costs.How is U.S.and Canada seen to gain from this trend?

Correct Answer
verified

What are the primary impediments to regional economic integration?

Correct Answer
verified
Even though there may be a clear rationa...
View Answer

Which EU institution is composed of one representative from the government of each member state,and whose membership depends on the topic being discussed?

Correct Answer
verified

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

Correct Answer
verified

By adopting the euro,the EU has created the second most widely traded currency in the world after that of the U.S.dollar.

Correct Answer
verified

A regional free trade agreement will benefit the world only if the amount of trade it creates exceeds the amount it diverts.

Correct Answer
verified

The Asia-Pacific Economic Cooperation (APEC)is the largest and most successful economic grouping in Asia.

Correct Answer
verified

Which of the following factors resulted in the establishment of the European Union (EU) ?

Correct Answer
verified

Exam 8: Regional Economic Integration

Which of the following is a major obstacle confronting the establishment of the Free Trade Area of the Americas (FTAA) ?

Correct AnswerverifiedShow Answer

_____ occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.

Correct AnswerverifiedShow Answer

Identify the second most widely traded currency in the world.

Correct AnswerverifiedShow Answer

Which of the following is a major consideration that led to the establishment of the European Community?

Correct AnswerverifiedShow Answer

A major benefit of regional free trade agreements is that all parties involved end up as winners.

Correct AnswerverifiedShow Answer

Which of the following led to the collapse of the Central American Common Market in 1969?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A regional free trade agreement will benefit the world only if:

Correct AnswerverifiedShow Answer

The votes that a country gets in the European Council are related to the size of the country.

Correct AnswerverifiedShow Answer

Which term is used to refer to 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?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A pan-European,euro-dominated capital market effectively decreases the range of investment options open to both individuals and institutions.

Correct AnswerverifiedShow Answer

Advocates of NAFTA acknowledge that some U.S.and Canadian firms would move production to Mexico to take advantage of lower labor costs.How is U.S.and Canada seen to gain from this trend?

Correct AnswerverifiedShow Answer

What are the primary impediments to regional economic integration?

Correct AnswerverifiedEven though there may be a clear rationa...View AnswerShow Answer

Which EU institution is composed of one representative from the government of each member state,and whose membership depends on the topic being discussed?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

By adopting the euro,the EU has created the second most widely traded currency in the world after that of the U.S.dollar.

Correct AnswerverifiedShow Answer

A regional free trade agreement will benefit the world only if the amount of trade it creates exceeds the amount it diverts.

Correct AnswerverifiedShow Answer

The Asia-Pacific Economic Cooperation (APEC)is the largest and most successful economic grouping in Asia.

Correct AnswerverifiedShow Answer

Which of the following factors resulted in the establishment of the European Union (EU) ?

Correct AnswerverifiedShow Answer

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verified
Even though there may be a clear rationa...
View Answer

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verified

Correct Answer
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Correct Answer
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