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| 1 | |
The desire by European to hold their own on the world's economic and political stage prompted the formation of the EU. |
| | A) | True |
| | B) | False |
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| 2 | |
The Single European Act committed EU countries to adopt a single currency, the euro. |
| | A) | True |
| | B) | False |
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| 3 | |
NAFTA's initial impact on jobs was very small. |
| | A) | True |
| | B) | False |
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| 4 | |
In 2005-6, Venezuela withdrew from the Andean Pact to join MERCOSUR, though it may take years for Venezuela to become fully integrated into MERCOSUR. |
| | A) | True |
| | B) | False |
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| 5 | |
The AFTA Agreement represents Africa's first attempt at regional economic integration. |
| | A) | True |
| | B) | False |
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| 6 | |
When countries agree to reduce and remove tariff and non-tariff barriers to the free flow of goods, services, and factors of production between each other, the countries have agreed to |
| | A) | a free trade area |
| | B) | a customs union |
| | C) | regional economic integration |
| | D) | a single economic entity |
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| 7 | |
Norway, Iceland, Liechtenstein, and Switzerland all belong to |
| | A) | the EU |
| | B) | MERCOSUR |
| | C) | NAFTA |
| | D) | EFTA |
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| 8 | |
Several levels of economic integration are possible. Three such levels from the least integrated to the most integrated are: |
| | A) | free trade area, customs union, common market |
| | B) | customs union, political union, economic union |
| | C) | free trade area, political union, common market |
| | D) | common market, customs union, political union |
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| 9 | |
Which of the following is considered part of the economic case for regional integration: |
| | A) | increasing the political sovereignty of member countries. |
| | B) | an attempt to achieve additional gains from the free flow of trade and investment between countries. |
| | C) | creating greater independence of the member states through increased economic strength. |
| | D) | international trade theories suggest that the dominant partner in regional economic integration will gain, resembling a zero-sum game. |
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| 10 | |
Great Britain's reluctance to adopt the euro is an example of _________ that occurs as a result of economic integration. |
| | A) | increased control over monetary policy |
| | B) | loss of national sovereignty |
| | C) | the loosening of control over fiscal issues |
| | D) | the trade creation |
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| 11 | |
If, prior to NAFTA, the U.S. produced its own textiles at a higher cost than Mexico, but after NAFTA imports them from Mexico |
| | A) | trade has been diverted |
| | B) | trade has been created |
| | C) | Mexico is worse off |
| | D) | the U.S. is worse off |
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| 12 | |
Three cornerstones of the current European Union are: |
| | A) | the Geneva Convention, the Treaty of Rome and the London Accords |
| | B) | the Treaty of Rome, the Maastricht Treaty and the Geneva Convention |
| | C) | the Treaty of Rome, the Maastricht Treaty and the Single European Act |
| | D) | the Olympic Movement, the Treaty of Rome and the Single European Act |
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| 13 | |
The European Commission |
| | A) | is responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws by member states |
| | B) | is the ultimate controlling authority within the EU |
| | C) | is primarily a consultative rather than a legislative body |
| | D) | is the supreme appeals court for EU laws |
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| 14 | |
The introduction of the euro has resulted in all of the following except |
| | A) | European investors should be able to better diversify their risk |
| | B) | consumers should gain through lower prices |
| | C) | European companies should become more efficient |
| | D) | individual countries will be able to set their own interest rates |
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| 15 | |
Critics have suggested that the decision by the EU to adopt the euro was wrong because |
| | A) | the EU is not an optimal currency area |
| | B) | of the similarities in the underlying structure of economic activity that make it unnecessary |
| | C) | it should have occurred at the common market stage |
| | D) | its shifts responsibility for national monetary policies to the individual countries |
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| 16 | |
Turkey's application to join the European Union has presented the EU with difficult issues. Which of the following is not one of those issues? |
| | A) | Less than a quarter of Turkey's international trade is with the EU. |
| | B) | The EU has concerns about human rights violations, especially with the Kurdish population. |
| | C) | There are suspicions that the EU is concerned because Turkey is primarily a Muslim nation. |
| | D) | There are concerns because Turkey straddles both Europe and Asia. |
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| 17 | |
All of the following are true of the Andean Pact except |
| | A) | it is now known as the Andean Community |
| | B) | it includes Columbia, Bolivia, Peru, and Ecuador |
| | C) | it operates as a common market |
| | D) | it is in negotiation with MERCOSUR to create a free trade area between the two blocs |
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| 18 | |
MERCOSUR |
| | A) | has a common currency |
| | B) | was originally established to create a free trade area by the end of 1994 |
| | C) | has a combined population of 450 million people |
| | D) | is proven to be a successful and unifying presence in Latin America |
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| 19 | |
The Caribbean Single Market and Economy: |
| | A) | is the modern successor to CAFTA. |
| | B) | has the primary aim of lowering trade barriers between the US and the member countries. |
| | C) | is a recent attempt by Hugo Chavez to unite Caribbean countries under the leadership of Venezuela and Cuba. |
| | D) | is modeled on the European Union. |
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| 20 | |
Progress toward a Free Trade of the Americas has been slow because |
| | A) | of debates over intellectual property rights and agricultural subsidies |
| | B) | Brazil is firmly against the idea, yet is the largest economy in South America |
| | C) | the U.S. wants Brazil and Argentina to remove their subsidies on agricultural products |
| | D) | Latin American debt must be paid off in order for this type of agreement to be successful |
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| 21 | |
Which of the following is not a member of the Association of Southeast Asian Nations (ASEAN) with a combined membership of half a billion people and combined GDP of more than $740 billion: |
| | A) | Myanmar |
| | B) | The Philippines |
| | C) | Indonesia |
| | D) | Taiwan |
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| 22 | |
Which of the following countries is not a member of APEC? |
| | A) | China |
| | B) | the U.S. |
| | C) | India |
| | D) | Japan |
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| 23 | |
African countries have been experimenting with regional trade blocks with the following result: |
| | A) | The key to effectiveness had been the enthusiastic support of the free trade movement. |
| | B) | There are nine trade blocks, often with countries members of more than one block. |
| | C) | The initiatives have been successful because of reduced traditional rivalries and suspicions. |
| | D) | Most countries are committed to reducing trade barriers to gain the benefits of freer trade. |
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| 24 | |
Regional economic integration, say in the EU, offers significant opportunities to US businesses including: |
| | A) | Non-EU companies no longer need to set up subsidiaries in EU countries. |
| | B) | Companies can realize significant cost economies by centralizing operations where factor costs and skills are optimal. |
| | C) | It makes no difference where in the EU one locates an operation since the costs are the same throughout. |
| | D) | Cultural differences and national consumer preferences are now irrelevant. |
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| 25 | |
Regional economic integration presents potentially significant threats to business outside the area, including: |
| | A) | long-term improvements in the competitive positions of firms inside the areas. |
| | B) | the end of a "fortress" mentality means other firms outside the area will be able to enter the areas more easily to compete with existing area firms. |
| | C) | the end to efforts to rationalize production and reduce costs. |
| | D) | the imposition of US standards, recognized as a pioneer in regional economic integration, which means US firms will not be able to get around the legal barriers. |
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