Question 1

In early 2006,six CARICOM members and the United States established the _____,which was modeled on the EU's single market.

Accepted Answer

A)   Central American Common Market
B)   Central America Free Trade Agreement
C)   Caribbean Single Market and Economy
D)   North American Free Trade Area C

Question 2

Debate the ratification of the North American Free Trade Agreement.

Accepted Answer

NAFTA is a free trade agreement between the United States,Canada,and Mexico.When the agreement was initially proposed in 1988,there was much debate as to whether the agreement should be ratified.Proponents of NAFTA argued that NAFTA should be seen as an opportunity to create an enlarged and more efficient productive base for the entire North American region.They argued that while some lower-income jobs would move from the United States and Canada to Mexico,new jobs would be created in the U.S.and Canada as economic growth occurred in Mexico as a result of the job transfers.In addition,the international competitiveness of U.S.and Canadian firms that move production to Mexico to take advantage of lower labor costs will be enhanced,enabling them to better compete against Asian and European rivals.Those that opposed NAFTA claimed that U.S.and Canadian citizens would lose their jobs in alarming numbers as low-income positions were moved to Mexico to take advantage of lower wage rates.Environmentalists also voiced concerns about NAFTA.Because Mexico has more lenient environmental protection laws than either the U.S.or Canada,there was concern that U.S.and Canadian firms would relocate to Mexico to avoid the cost of protecting the environment.Finally,there was opposition in Mexico to NAFTA from those who feared a loss of national sovereignty.Mexican critics feared that NAFTA would allow their country to be dominated by U.S.and Canadian multinationals,and Mexico would be used as a low-cost assembly site,while keeping their higher-paying jobs in their own countries.

Question 3

The European Community was established by:

Accepted Answer

A)   the Treaty of Rome signed in 1957.
B)   the Maastricht Treaty signed in 1991.
C)   the Maastricht Treaty of 1994.
D)   the Single European Act of 1987. A

Question 4

Which of the following is the most frequently aired objection to free trade in Africa?

Accepted Answer

A)   These economies are too small for free trade to exist.
B)   These countries are not ready for a full-fledged political union with a common currency.
C)   They need to be "protected" by tariff barriers from unfair foreign competition.
D)   The larger nations like South Africa and Kenya stand much to lose from free trade and competition.

Question 5

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

Accepted Answer

A)   Nontariff barriers
B)   Services
C)   Energy markets
D)   Tax rates

Question 6

What are the five levels of economic integration? Briefly describe each form.

Accepted Answer

The answer of What are the five levels of economic...

Question 7

Mercosur originated as a(n)_____ between Brazil and Argentina in 1988.

Accepted Answer

A)   common market
B)   free trade pact
C)   customs union
D)   economic union

Question 8

The European Union is an example of a perfect economic union.

Accepted Answer

A) True 
 B)False

Question 9

The move toward economic union raises the issue of how to make a coordinating bureaucracy accountable to the citizens of member nations.Which of the following offers a solution to this problem?

Accepted Answer

A)   A common market
B)   A free trade area
C)   A customs union
D)   A political union

Question 10

A common market has no barriers to trade between member countries,includes a common external trade policy,and allows factors of production to move freely between members.

Accepted Answer

A) True 
 B)False

Question 11

The Council of the European Union is responsible for proposing EU legislation,implementing it,and monitoring compliance with EU laws by member states.

Accepted Answer

A) True 
 B)False

Question 12

Country X and Country Y reach an agreement to boost bilateral trade.They agree to remove all barriers to the trade of goods and services.They,however,are free to determine their own trade policies with regard to nonmembers.Which level of economic integration is this an example of?

Accepted Answer

A)   A customs union
B)   An economic union
C)   A common market
D)   A Free trade area

Question 13

Which is the most enduring free trade area in the world?

Accepted Answer

The answer of Which is the most enduring free trade...

Question 14

Which of the following is a reason why the European Union is considered an imperfect economic union?

Accepted Answer

A)   Factors of production are not allowed to move freely between member countries.
B)   Not all members of the union have adopted the euro.
C)   Almost all markets are heavily regulated.
D)   Products and services are not allowed to move freely between member countries.

Question 15

What was the main objection raised by those in the United States and Canada who opposed the ratification of the NAFTA?

Accepted Answer

A)   Job losses
B)   Balance of payment problems
C)   Threat of competition from Asian companies
D)   Threat of a loss of national sovereignty

Question 16

The movement toward regional economic integration been most successful in Asia.

Accepted Answer

A) True 
 B)False

Question 17

Why is the European Council said to be the ultimate controlling authority within the EU?

Accepted Answer

A)   Since it is responsible for implementing EU legislation and monitoring compliance with EU laws by member states
B)   Since its role in setting competition policy is becoming increasingly important to business
C)   Since it has the right to vote on the appointment of commissioners
D)   Since draft legislation from the commission can become EU law only if the council agrees

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

How does the NAFTA seem to increase the international competitiveness of U.S.and Canadian firms?

Accepted Answer

A)   It gives them access to scarce natural resource hitherto unavailable.
B)   It increases tariff barriers making the North American market less attractive to Asian companies.
C)   It allows them to take advantage of lower labor costs in Mexico.
D)   It gives them production bases in South American markets like Brazil and Argentina.

Question 20

The Andean Pact is a highly successful common market modeled after the EU.

Accepted Answer

A) True 
 B)False

Exam 9: Regional Trade Pacts Give the Mexican Auto Industry an Edge

In early 2006,six CARICOM members and the United States established the _____,which was modeled on the EU's single market.

Debate the ratification of the North American Free Trade Agreement.

The European Community was established by:

Which of the following is the most frequently aired objection to free trade in Africa?

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

What are the five levels of economic integration? Briefly describe each form.

Mercosur originated as a(n) _____ between Brazil and Argentina in 1988.

The European Union is an example of a perfect economic union.

The move toward economic union raises the issue of how to make a coordinating bureaucracy accountable to the citizens of member nations.Which of the following offers a solution to this problem?

A common market has no barriers to trade between member countries,includes a common external trade policy,and allows factors of production to move freely between members.

The Council of the European Union is responsible for proposing EU legislation,implementing it,and monitoring compliance with EU laws by member states.

Country X and Country Y reach an agreement to boost bilateral trade.They agree to remove all barriers to the trade of goods and services.They,however,are free to determine their own trade policies with regard to nonmembers.Which level of economic integration is this an example of?

Which is the most enduring free trade area in the world?

Which of the following is a reason why the European Union is considered an imperfect economic union?

What was the main objection raised by those in the United States and Canada who opposed the ratification of the NAFTA?

The movement toward regional economic integration been most successful in Asia.

Why is the European Council said to be the ultimate controlling authority within the EU?

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.

How does the NAFTA seem to increase the international competitiveness of U.S.and Canadian firms?

The Andean Pact is a highly successful common market modeled after the EU.