Question 1

Which of the following best describes economic integration in Central and Eastern Europe?

Accepted Answer

A) The Council of Mutual Economic Assistance is the primary current organization. 
B) The Baltic states are actively organized into their own trading bloc. 
C) The more developed countries of Central Europe are attempting to become EU members. 
D) All of Eastern and Central Europe will become part of the EU. 
A) The Council of Mutual Economic Assistance is the primary current organization. 
B) The Baltic states are actively organized into their own trading bloc. 
C) The more developed countries of Central Europe are attempting to become EU members. 
D) All of Eastern and Central Europe will become part of the EU. B

Question 2

The European Union currently has

Accepted Answer

A) 6 members 
B) 12 members 
C) 15 members 
D) 27 members 
A) 6 members 
B) 12 members 
C) 15 members 
D) 27 members D

Question 3

One potential outcome from the formation of a regional trade agreement is

Accepted Answer

A) trade creation 
B) trade diversion 
C) economies of scale 
D) all of the above 
A) trade creation 
B) trade diversion 
C) economies of scale 
D) all of the above D

Question 4

The following country is not a member of the European Union

Accepted Answer

A) Switzerland 
B) Sweden 
C) Ireland 
D) Greece 
A) Switzerland 
B) Sweden 
C) Ireland 
D) Greece

Question 5

Which of the following describes a case in which there are likely to be net benefits from a customs union?

Accepted Answer

A) The union includes the least-cost producers of the traded goods. 
B) There are low barriers to trade prior to the union. 
C) The countries are complementary rather than competitive. 
D) The countries are a larger geographic distance from each other. 
A) The union includes the least-cost producers of the traded goods. 
B) There are low barriers to trade prior to the union. 
C) The countries are complementary rather than competitive. 
D) The countries are a larger geographic distance from each other.

Question 6

The benefit that the United States is likely to receive from NAFTA:

Accepted Answer

A) increasing competition in product and resource markets 
B) greater technical innovation 
C) improvements in its terms of trade 
D) all of the above 
A) increasing competition in product and resource markets 
B) greater technical innovation 
C) improvements in its terms of trade 
D) all of the above

Question 7

A customs union that allows for the free movement of labor and capital among its member nations is called a:

Accepted Answer

A) preferential trade arrangement 
B) free-trade area 
C) common market 
D) all of the above 
A) preferential trade arrangement 
B) free-trade area 
C) common market 
D) all of the above

Question 8

Which of the following statements is correct?

Accepted Answer

A) In a customs union,member nations apply a uniform external tariff 
B) in a free-trade area,member nations harmonize their monetary and fiscal policies 
C) within a customs union there is unrestricted factor movement 
D) a customs union is a higher form of economic integration than a common market 
A) In a customs union,member nations apply a uniform external tariff 
B) in a free-trade area,member nations harmonize their monetary and fiscal policies 
C) within a customs union there is unrestricted factor movement 
D) a customs union is a higher form of economic integration than a common market

Question 9

The North American Free Trade Agreement (NATFA)is best defined as a

Accepted Answer

A) free trade area 
B) customs union 
C) preferential trade arrangement 
D) economic union 
A) free trade area 
B) customs union 
C) preferential trade arrangement 
D) economic union

Question 10

The formation of a trade-creating customs union where all economic resources of member nations are fully employed before and after the formation of the customs union leads to an:

Accepted Answer

A) increase in the welfare of member and nonmember nations 
B) increase in the welfare of member nations only 
C) increase in the welfare of nonmember nations only 
D) increase or decrease in the welfare of member and nonmember nations 
A) increase in the welfare of member and nonmember nations 
B) increase in the welfare of member nations only 
C) increase in the welfare of nonmember nations only 
D) increase or decrease in the welfare of member and nonmember nations

Question 11

What is the theory of second best?

Accepted Answer

The theory of second best postulates tha

Question 12

Why do economies that are competitive rather than complementary tend to increase the benefits from customs unions?

Accepted Answer

Countries that are competitive (produce

Question 13

Discuss the conditions which are more likely to lead to increased welfare with the formation of a customs union.

Accepted Answer

Higher pre-union barriers to trade with

Question 14

A trade-diverting customs union:

Accepted Answer

A) increases trade among union members and with nonmember nations 
B) reduces trade among union members and with nonmember nations 
C) increases trade among members but reduces trade with non-members 
D) reduces trade among union members but increases it with nonmembers 
A) increases trade among union members and with nonmember nations 
B) reduces trade among union members and with nonmember nations 
C) increases trade among members but reduces trade with non-members 
D) reduces trade among union members but increases it with nonmembers

Question 15

Which is not a dynamic benefit from the formation of a customs union?

Accepted Answer

A) increased competition 
B) economies of scale 
C) stimulus to investment 
D) trade creation 
A) increased competition 
B) economies of scale 
C) stimulus to investment 
D) trade creation

Question 16

The formation of a free trade area among the countries of Eastern Europe is advocated in order to:

Accepted Answer

A) restore trade trading 
B) retain the traditional trade links that can be justified on market principles 
C) reduce the need for structural change 
D) none of the above 
A) restore trade trading 
B) retain the traditional trade links that can be justified on market principles 
C) reduce the need for structural change 
D) none of the above

Question 17

The formation of the EU resulted in:

Accepted Answer

A) trade creation in industrial and agricultural products 
B) trade diversion in industrial and agricultural products 
C) trade creation in industrial products and trade diversion in agricultural products 
D) trade diversion in industrial products and trade creation in agricultural products 
A) trade creation in industrial and agricultural products 
B) trade diversion in industrial and agricultural products 
C) trade creation in industrial products and trade diversion in agricultural products 
D) trade diversion in industrial products and trade creation in agricultural products

Question 18

Discuss the attempts at economic integration in developing countries.Why have these attempts been less successful than in developed countries?

Accepted Answer

There are many examples of economic inte

Question 19

The benefit that Mexico is likely to receive from NAFTA:

Accepted Answer

A) greater export-led growth 
B) encouraging the return of flight capital 
C) more rapid structural change 
D) all of the above 
A) greater export-led growth 
B) encouraging the return of flight capital 
C) more rapid structural change 
D) all of the above

Question 20

(a)Why did the United States supported economic integration in Europe after World War II?
(b)What direct or indirect evidence can you give to conclude that U.S.support for economic integration in Europe did in fact result in the hope-for outcome?
(c)What are the major economic disputes between the United States and Europe about these days?
What dangers do they create?

Accepted Answer

(a)The United States supported economic

Which of the following best describes economic integration in Central and Eastern Europe?

The European Union currently has

One potential outcome from the formation of a regional trade agreement is

The following country is not a member of the European Union

Which of the following describes a case in which there are likely to be net benefits from a customs union?

The benefit that the United States is likely to receive from NAFTA:

A customs union that allows for the free movement of labor and capital among its member nations is called a:

Which of the following statements is correct?

The North American Free Trade Agreement (NATFA)is best defined as a

The formation of a trade-creating customs union where all economic resources of member nations are fully employed before and after the formation of the customs union leads to an:

What is the theory of second best?

Why do economies that are competitive rather than complementary tend to increase the benefits from customs unions?

Discuss the conditions which are more likely to lead to increased welfare with the formation of a customs union.

A trade-diverting customs union:

Which is not a dynamic benefit from the formation of a customs union?

The formation of a free trade area among the countries of Eastern Europe is advocated in order to:

The formation of the EU resulted in:

Discuss the attempts at economic integration in developing countries.Why have these attempts been less successful than in developed countries?

The benefit that Mexico is likely to receive from NAFTA:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscher-Ohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Economic Growth and International Trade

Nontariff Trade Barriers and the New Protectionism

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange

The Income Adjustment Mechanism and Synthesis of Automatic

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past,present,and Future

Filters

Exam 10: Economic Integration: Customs Unions and Free Trade Areas

Which of the following best describes economic integration in Central and Eastern Europe?

The European Union currently has

One potential outcome from the formation of a regional trade agreement is

The following country is not a member of the European Union

Which of the following describes a case in which there are likely to be net benefits from a customs union?

The benefit that the United States is likely to receive from NAFTA:

A customs union that allows for the free movement of labor and capital among its member nations is called a:

Which of the following statements is correct?

The North American Free Trade Agreement (NATFA)is best defined as a

The formation of a trade-creating customs union where all economic resources of member nations are fully employed before and after the formation of the customs union leads to an:

What is the theory of second best?

Why do economies that are competitive rather than complementary tend to increase the benefits from customs unions?

Discuss the conditions which are more likely to lead to increased welfare with the formation of a customs union.

A trade-diverting customs union:

Which is not a dynamic benefit from the formation of a customs union?

The formation of a free trade area among the countries of Eastern Europe is advocated in order to:

The formation of the EU resulted in:

Discuss the attempts at economic integration in developing countries.Why have these attempts been less successful than in developed countries?

The benefit that Mexico is likely to receive from NAFTA:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscher-Ohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Economic Growth and International Trade

Nontariff Trade Barriers and the New Protectionism

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange

The Income Adjustment Mechanism and Synthesis of Automatic

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past,present,and Future

Filters