Question 1

The ________ is a 1969 agreement among Bolivia, Chile, Ecuador, Colombia, and Peru to establish a customs union.

Accepted Answer

A)   Andean Pact
B)   ASEAN
C)   Mercosur
D)   CARICOM
E)   Caribbean Single Market and EconomyF) A) and D)
G) D) and E)

Question 2

One drawback of adopting the euro for member states is a(n)

Accepted Answer

A)   loss of control over national monetary policy.
B)   increase in the cost of capital.
C)   reduction in the liquidity of capital markets.
D)   reduction of price differentials within the euro zone.
E)   loss of investment options open to both individuals and institutions.F) B) and D)
G) A) and C)

Question 3

The European Parliament plays an important role in the European Union and creates a(n)  ________ to coordinate the economic, social, and foreign policy of the member states.

Accepted Answer

A)   political union
B)   customs union
C)   exclusive economic zone
D)   free trade agreement
E)   common marketF) B) and E)
G) A) and E)

Question 4

The biggest leap of economic faith came from ________ when signing the NAFTA agreement.

Accepted Answer

A)   the United States
B)   Canada
C)   Mexico
D)   Panama
E)   BrazilF) A) and B)
G) A) and D)

Question 5

The scope of the WTO covers all tariff and nontariff barriers to regional economic integration.

Accepted Answer

A) True 
 B)False

Question 6

Since its establishment on January 1, 1999, the euro has more than tripled in appreciation against the U.S. dollar, reaffirming the ability of the European Central Bank to manage monetary policy within the euro zone.

Accepted Answer

A) True 
 B)False

Question 7

The country of Turkey has lobbied for EU membership for many years but full membership has been denied because of

Accepted Answer

A)   a lack of democratic reforms.
B)   poor infrastructure.
C)   investment high debt ratio.
D)   concerns over human rights issues.
E)   a lack of intellectual property rights.F) C) and D)
G) A) and C)

Question 8

Which trade agreement aims to remove all barriers to the free flow of goods between Canada, the United States and Mexico?

Accepted Answer

A)   TRIPS
B)   Mercosur
C)   NAFTA
D)   EU
E)   ASEANF) B) and D)
G) A) and E)

Question 9

One result of the Treaty of Lisbon that was signed in 2007 is that it

Accepted Answer

A)   defined the European Commission's role in competition policy.
B)   brought the commission to the court for failure to act according to a European Union treaty.
C)   increased the role of the European Parliament.
D)   lifted barriers to competition in the retail banking and insurance businesses.
E)   created the Court of Justice, the supreme appeals court for European Union law.F) A) and B)
G) C) and D)

Question 10

In recent decades there have been fewer trade blocs established to promote regional economic integration.

Accepted Answer

A) True 
 B)False

Question 11

The Andean Pact was largely based on the European Union model and was highly successful at achieving its stated goals.

Accepted Answer

A) True 
 B)False

Question 12

A key advantage of adopting the euro is that it

Accepted Answer

A)   helps in reduction of competition in Europe.
B)   has prevented the development of a highly liquid pan-European capital market.
C)   lowers foreign exchange and hedging costs in Europe.
D)   insulates Europe from international competition.
E)   increases the range of investment options open to institutions only.F) B) and E)
G) A) and D)

Question 13

Great Britain, Denmark, and Sweden have stayed out of the euro zone because of the

Accepted Answer

A)   dollar peg advocated by some members of the European Union.
B)   implied loss of national sovereignty to the European Central Bank.
C)   volatility of the euro.
D)   reluctance to compete directly against the U.S. dollar.
E)   reluctance to be considered an optimal currency area.F) A) and B)
G) None of the above

Question 14

Which of these situations shows how concerns over national sovereignty can act as an impediment to regional economic integration?

Accepted Answer

A)   Organization of the Petroleum Exporting Countries regulating the supply of petroleum as a cartel
B)   Asia-Pacific Economic Cooperation failing to establish itself as a regional arrangement
C)   admission of eastern European nations into the European Union
D)   Great Britain refusing to adopt the common currency of the European Union, the euro
E)   rise of the World Trade OrganizationF) C) and E)
G) A) and D)

Question 15

The ________ proposed that all impediments to the formation of a single market be eliminated by December 31, 1992, resulting in the Single European Act.

Accepted Answer

A)   Delors Commission
B)   Andean Pact
C)   Treaty of Rome
D)   North American Free Trade Agreement
E)   Maastricht TreatyF) C) and D)
G) D) and E)

Question 16

How has adoption of the euro affected economic efficiency in European companies?

Accepted Answer

A)   It has created an increase in the cost of capital.
B)   It has produced a decline in the overall level of savings and investment.
C)   It has increased competition and produced long-run gains.
D)   It has reduced liquidity in the market.
E)   It has reduced competition and diminished gains.F) B) and E)
G) A) and E)

Question 17

Establishment of the euro required participating national governments to

Accepted Answer

A)   have a sound fiscal situation.
B)   have stable exchange rates.
C)   be democratic in nature.
D)   give up control over monetary policy.
E)   have a high degree of price stability.F) B) and D)
G) A) and C)

Question 18

In a free trade area, all barriers to the trade of goods and services among member countries are removed and a common external trade policy is adopted.

Accepted Answer

A) True 
 B)False

Question 19

The European Free Trade Association is the most enduring free trade area in the world.

Accepted Answer

A) True 
 B)False

Question 20

The European Council is composed of one representative from the government of each member state, but the membership varies depending on the topic being discussed.

Accepted Answer

A) True 
 B)False

Exam 9: Regional Economic Integration

In a free trade area, all barriers to the trade of goods and services among member countries are removed and a common external trade policy is adopted.

Correct AnswerverifiedShow Answer

The scope of the WTO covers all tariff and nontariff barriers to regional economic integration.

Correct AnswerverifiedShow Answer

The country of Turkey has lobbied for EU membership for many years but full membership has been denied because of

Correct AnswerverifiedShow Answer

Which of these situations shows how concerns over national sovereignty can act as an impediment to regional economic integration?

Correct AnswerverifiedShow Answer

The European Parliament plays an important role in the European Union and creates a(n) ________ to coordinate the economic, social, and foreign policy of the member states.

Correct AnswerverifiedShow Answer

The ________ proposed that all impediments to the formation of a single market be eliminated by December 31, 1992, resulting in the Single European Act.

Correct AnswerverifiedShow Answer

Which trade agreement aims to remove all barriers to the free flow of goods between Canada, the United States and Mexico?

Correct AnswerverifiedShow Answer

A key advantage of adopting the euro is that it

Correct AnswerverifiedShow Answer

Establishment of the euro required participating national governments to

Correct AnswerverifiedShow Answer

The European Free Trade Association is the most enduring free trade area in the world.

Correct AnswerverifiedShow Answer

Great Britain, Denmark, and Sweden have stayed out of the euro zone because of the

Correct AnswerverifiedShow Answer

One result of the Treaty of Lisbon that was signed in 2007 is that it

Correct AnswerverifiedShow Answer

One drawback of adopting the euro for member states is a(n)

Correct AnswerverifiedShow Answer

The biggest leap of economic faith came from ________ when signing the NAFTA agreement.

Correct AnswerverifiedShow Answer

The European Council is composed of one representative from the government of each member state, but the membership varies depending on the topic being discussed.

Correct AnswerverifiedShow Answer

The Andean Pact was largely based on the European Union model and was highly successful at achieving its stated goals.

Correct AnswerverifiedShow Answer

In recent decades there have been fewer trade blocs established to promote regional economic integration.

Correct AnswerverifiedShow Answer

How has adoption of the euro affected economic efficiency in European companies?

Correct AnswerverifiedShow Answer

Since its establishment on January 1, 1999, the euro has more than tripled in appreciation against the U.S. dollar, reaffirming the ability of the European Central Bank to manage monetary policy within the euro zone.

Correct AnswerverifiedShow Answer

The ________ is a 1969 agreement among Bolivia, Chile, Ecuador, Colombia, and Peru to establish a customs union.

Correct AnswerverifiedShow Answer

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