Question 1

Which of the following explains why economic integration has never been easy to achieve or sustain,despite the strong economic and political arguments in support?

Accepted Answer

A)   No country has shown significant improvement because of economic integration.
B)   Countries fear a reduction of their political weight in the world because of economic integration.
C)   Linking neighboring economies and making them increasingly dependent on each other creates little incentives for political cooperation.
D)   While a nation as a whole may benefit significantly,certain groups may lose. D

Question 2

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

Accepted Answer

A)   Higher foreign exchange and hedging costs
B)   National authorities losing control over monetary policy
C)   It becomes difficult to compare prices across Europe
D)   It undermines the development of a pan-European capital market B

Question 3

Which of the following observations pertaining to the EU's Court of Justice is incorrect?

Accepted Answer

A)   It is comprised of one judge from each country.
B)   It is the supreme appeals court for EU law.
C)   Its judges are required to act as representatives of national interests.
D)   A member country can bring other members to the court for failing to meet EU treaty obligations. C

Question 4

Regional economic integration involves agreements among countries in a geographic region to reduce,and ultimately remove,tariff and nontariff barriers to the free flow of goods,services,and factors of production between each other.

Accepted Answer

A) True 
 B)False

Question 5

The bulk of intra-ASEAN trade consisted of goods whose tariffs had been reduced through an ASEAN preferential trade arrangement.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following accounts for about 55 percent of the world's GNP and 49 percent of world trade?

Accepted Answer

A)   NAFTA
B)   APEC
C)   ASEAN
D)   EFTA

Question 7

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.

Question 8

The East African Community (EAC)has been a successful integration effort in Africa during the last three decades.

Accepted Answer

A) True 
 B)False

Question 9

Some economists have expressed concerns that the benefits of regional integration have been touted while the costs have been ignored.Explain the view of these economists.

Accepted Answer

The answer of Some economists have expressed concerns that the...

Question 10

How easy is it for countries to integrate?

Accepted Answer

The answer of How easy is it for countries to...

Question 11

Explain how MERCOSUR has changed over time.What are the implications of these changes?

Accepted Answer

The answer of Explain how MERCOSUR has changed over time.What...

Question 12

In a customs union,trade barriers are eliminated among member countries,and each country maintains its own external trade polices with nonmember countries.

Accepted Answer

A) True 
 B)False

Question 13

In a(n)_____,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.

Accepted Answer

A)   optimal currency area
B)   unified economic area
C)   uniform currency zone
D)   monetary zone

Question 14

Three countries agree to remove barriers to trade between member countries and adopt a common external trade policy toward nonmembers.They also agree to allow people and other factors of production to move freely across their borders.Which level of economic integration is this an example of?

Accepted Answer

A)   Bonded market
B)   Customs union
C)   Free trade area
D)   Common market

Question 15

There are two main trading blocs in Europe,the European Union and the European Free Trade Association.

Accepted Answer

A) True 
 B)False

Question 16

What is the political case for integration? How did political arguments influence the establishment of the European Union?

Accepted Answer

The answer of What is the political case for integration?...

Question 17

Discuss the Free Trade Area of the Americas.What is hindering its progress? What is the position of the U.S.on the agreement? How does Brazil feel about the FTAA?

Accepted Answer

The answer of Discuss the Free Trade Area of the...

Question 18

Which of the following is directly elected by the populations of the member states and is primarily a consultative rather than legislative body?

Accepted Answer

A)   The European Parliament
B)   The European Commission
C)   The Council of the European Union
D)   The Court of Justice

Question 19

A political benefit of economic integration is that:

Accepted Answer

A)   it enables participants to achieve gains from the free flow of trade.
B)   it enables participants to achieve gains from the free flow of investment.
C)   it allow countries to specialize in the production of goods and services that they can produce most efficiently.
D)   it creates reduces the potential for violent conflict.

Question 20

Which feature of a customs union differentiates it from a free trade area?

Accepted Answer

A)   Harmonization of members' tax rates
B)   A common currency
C)   A common external trade policy toward nonmembers
D)   Ability of factors of production to move freely between members

Exam 9: Regional Economic Integration

Which of the following explains why economic integration has never been easy to achieve or sustain,despite the strong economic and political arguments in support?

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

Which of the following observations pertaining to the EU's Court of Justice is incorrect?

Regional economic integration involves agreements among countries in a geographic region to reduce,and ultimately remove,tariff and nontariff barriers to the free flow of goods,services,and factors of production between each other.

The bulk of intra-ASEAN trade consisted of goods whose tariffs had been reduced through an ASEAN preferential trade arrangement.

Which of the following accounts for about 55 percent of the world's GNP and 49 percent of world trade?

The European Community was established by:

The East African Community (EAC)has been a successful integration effort in Africa during the last three decades.

Some economists have expressed concerns that the benefits of regional integration have been touted while the costs have been ignored.Explain the view of these economists.

How easy is it for countries to integrate?

Explain how MERCOSUR has changed over time.What are the implications of these changes?

In a customs union,trade barriers are eliminated among member countries,and each country maintains its own external trade polices with nonmember countries.

In a(n) _____,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.

Three countries agree to remove barriers to trade between member countries and adopt a common external trade policy toward nonmembers.They also agree to allow people and other factors of production to move freely across their borders.Which level of economic integration is this an example of?

There are two main trading blocs in Europe,the European Union and the European Free Trade Association.

What is the political case for integration? How did political arguments influence the establishment of the European Union?

Discuss the Free Trade Area of the Americas.What is hindering its progress? What is the position of the U.S.on the agreement? How does Brazil feel about the FTAA?

Which of the following is directly elected by the populations of the member states and is primarily a consultative rather than legislative body?

A political benefit of economic integration is that:

Which feature of a customs union differentiates it from a free trade area?