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Exam 9: Regional Economic Integration

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Question 71

True/False

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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.

A) True
B) False

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Question 72

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Suppose the country of Ceria and Lithinia imposed tariffs on imports from all countries,and then they set up a free trade area,scrapping all trade barriers between themselves but maintaining tariffs on imports from the rest of the world.Now,Ceria begins to import sugar from Lithinia.However,Ceria had previously been importing sugar from another country,Cadnia,which produced sugar more cheaply than Ceria or Lithinia.This is known as _____.

A) trade creation
B) strategic pricing
C) synergy
D) trade diversion
E) protectionism

F) C) and D)
G) B) and C)

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Question 73

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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.

The European Parliament,which meets in Strasbourg,France,is primarily a legislative rather than consultative body.

What are the two impediments to regional economic integration?

The _____ refers to a permanent bailout fund,worth about €500 billion,set up by the euro zone nations to restore confidence in the euro.

Some economists have pointed out that the benefits of regional integration are determined by the extent of trade diversion,as opposed to trade creation.

Trade creation occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.

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.

An advantage of the emergence of single markets is that the lowering of barriers to trade and investment among countries has led to decreased price competition throughout the European Union.

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

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

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

The European commission is the ultimate controlling authority within the European Union because draft legislation from the commission can become EU law only if the council agrees.

Which of the following is true of the Treaty of Lisbon that was signed in 2007?

Describe the drawbacks of the euro.

The basic objective of the Association of Southeast Asian Nations is to foster freer trade among member countries and to achieve cooperation in their industrial policies.

The _____ is composed of one representative from the government of each member-state,and whose membership depends on the topic being discussed.

The European Community became the European Union in 1993 following the ratification of the _____.

Since the number of trade groups in the African continent is impressive,progress toward the establishment of meaningful trade blocs has been fast.