Exam 9: Regional Economic Integration

Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement.

Firms outside of trading areas run the risk of being shut out of the single market by the creation of a

The Treaty of Rome, signed in 1957, established the European Free Trade Association.

________ may also occur when higher-cost external producers are replaced by lower-cost external producers within the free trade area.

A central reason for the establishment of the EU was the devastation of Western Europe during two world wars and the desire for a lasting peace.

Which of the following established the second largest currency zone in the world?

Which level of economic integration eliminates trade barriers between member countries and adopts a common external trade policy?

Four main institutions make up the political structure of the EU. Which of them is responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws?

Since its establishment, the euro has had a stable trading history.

Which of the following is seen as a disadvantage of the euro?

________ involves the free flow of products and factors of production between member countries, the adoption of a common external trade policy, a common currency, harmonization of members' tax rates, and a common monetary and fiscal policy.

What is the Single European Act? What was the effect of the Single European Act on the EU economy? Did the Single European Act achieve its goals?

Political turmoil in several African nations has persistently impeded any meaningful progress in economic integration.

Which feature of an economic union differentiates it from a common market?

The implied loss of national sovereignty to the European Central Bank (ECB) underlies the decision by Great Britain, Denmark, and Sweden to stay out of the euro zone for now.

To ensure that a free trade agreement does not result in trade diversion, which of the following has to come within the scope of the WTO?

________ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.

Why doesn't Great Britain use the euro as its national currency?

What prompted the formation of the European Union?

In ____, similarities in the underlying structure of economic activity make it feasible to adopt a single currency and use a single exchange rate as an instrument of macroeconomic policy.