Question 1

What is trade diversion?

Accepted Answer

Trade diversion occurs when lower cost o

Question 2

A customs union is more like to lead to trade creation and increased welfare under the following condition

Accepted Answer

A) lower pre-union trade barriers 
B) lower trade barriers with the rest of the world 
C) complementary economies 
D) a smaller number of members 
A) lower pre-union trade barriers 
B) lower trade barriers with the rest of the world 
C) complementary economies 
D) a smaller number of members

Question 3

Which is a stumbling block to successful economic integration among groups of developing nations?

Accepted Answer

A) benefits are not evenly distributed among nations 
B) many developing nations are not willing to relinquish part of their newly-acquired sovereignty to a supranational community body,as required for successful economic integration 
C) the complementary nature of their economies and competition for the same world markets for their agricultural exports 
D) all of the above 
A) benefits are not evenly distributed among nations 
B) many developing nations are not willing to relinquish part of their newly-acquired sovereignty to a supranational community body,as required for successful economic integration 
C) the complementary nature of their economies and competition for the same world markets for their agricultural exports 
D) all of the above

Question 4

A trade-diverting customs union:

Accepted Answer

A) increases the welfare of member and nonmember nations 
B) reduces the welfare of member and nonmember nations 
C) increases the welfare of member nations but reduces that of nonmembers 
D) reduces the welfare of nonmembers and may increase or reduce that of members 
A) increases the welfare of member and nonmember nations 
B) reduces the welfare of member and nonmember nations 
C) increases the welfare of member nations but reduces that of nonmembers 
D) reduces the welfare of nonmembers and may increase or reduce that of members

Question 5

A trade-diverting customs union is more likely to lead to trade creation:

Accepted Answer

A) the lower are the pre-union trade barriers of the member countries 
B) the lower are the customs union's barriers on trade with the rest of the world 
C) the smaller is the number of countries forming the customs union and the smaller their size 
D) the more complementary rather than competitive are the economies of the nations forming the customs union 
A) the lower are the pre-union trade barriers of the member countries 
B) the lower are the customs union's barriers on trade with the rest of the world 
C) the smaller is the number of countries forming the customs union and the smaller their size 
D) the more complementary rather than competitive are the economies of the nations forming the customs union

Question 6

The theory of customs union is a special case of the theory of:

Accepted Answer

A) effective protection 
B) the second best 
C) the product cycle 
D) comparative advantage 
A) effective protection 
B) the second best 
C) the product cycle 
D) comparative advantage

Question 7

A trade-creating customs union is one where:

Accepted Answer

A) lower-cost imports from outside the customs union are replaced by higher-cost imports from a union member 
B) some domestic production in a member nation is replaced by lower-cost imports from another member nation 
C) trade among members increases but trade with nonmembers decreases 
D) trade among members decreases while trade with nonmembers increases 
A) lower-cost imports from outside the customs union are replaced by higher-cost imports from a union member 
B) some domestic production in a member nation is replaced by lower-cost imports from another member nation 
C) trade among members increases but trade with nonmembers decreases 
D) trade among members decreases while trade with nonmembers increases

Question 8

Which of the following is not a trading bloc or agreement including some South American countries?

Accepted Answer

A) MERCOSUR 
B) ASEAN 
C) FTAA 
D) CACM 
A) MERCOSUR 
B) ASEAN 
C) FTAA 
D) CACM

Question 9

A trade-diverting customs union results in:

Accepted Answer

A) trade diversion only 
B) trade creation only 
C) both trade creation and trade diversion 
D) we cannot say 
A) trade diversion only 
B) trade creation only 
C) both trade creation and trade diversion 
D) we cannot say

Question 10

Discuss the potential dynamic welfare gains that can result from the formation of a customs union.

Accepted Answer

Increased competitio

What is trade diversion?

A customs union is more like to lead to trade creation and increased welfare under the following condition

Which is a stumbling block to successful economic integration among groups of developing nations?

A trade-diverting customs union:

A trade-diverting customs union is more likely to lead to trade creation:

The theory of customs union is a special case of the theory of:

A trade-creating customs union is one where:

Which of the following is not a trading bloc or agreement including some South American countries?

A trade-diverting customs union results in:

Discuss the potential dynamic welfare gains that can result from the formation of a customs union.

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

What is trade diversion?

A customs union is more like to lead to trade creation and increased welfare under the following condition

Which is a stumbling block to successful economic integration among groups of developing nations?

A trade-diverting customs union:

A trade-diverting customs union is more likely to lead to trade creation:

The theory of customs union is a special case of the theory of:

A trade-creating customs union is one where:

Which of the following is not a trading bloc or agreement including some South American countries?

A trade-diverting customs union results in:

Discuss the potential dynamic welfare gains that can result from the formation of a customs union.

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