Question 1

Greece and Portugal have different wage rates, tax regimes, and business cycles. The two countries have also reacted differently in the past to external economic shocks. The dissimilarities are an example of one of the drawbacks of the euro that economists refer to as the EU not being in a(n)

Accepted Answer

A)   managed currency zone.
B)   open exchange regime.
C)   optimal currency area.
D)   free trade area.
E)   advanced monetary zone.F) A) and D)
G) A) and E)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Which country has been granted three bailout efforts by the EU in an attempt to prevent a sovereign debt crisis?

Accepted Answer

A)   Greece
B)   France
C)   Great Britain
D)   Belgium
E)   PortugalF) A) and D)
G) B) and E)

Question 4

Mercosur was temporarily suspended in 2001 because of a(n)

Accepted Answer

A)   dotcom bust in Paraguay.
B)   economic crisis in Argentina.
C)   exit of Uruguay from the group.
D)   devaluation of the Mexican peso.
E)   Venezuelan financial crisis.F) A) and D)
G) A) and E)

Question 5

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

Accepted Answer

A)   Council of the European Union
B)   European Commission
C)   European Parliament
D)   Court of Justice
E)   European CommunityF) B) and D)
G) A) and D)

Question 6

The ________ committed European Community members to adopt a common currency by January 1, 1999.

Accepted Answer

A)   Maastricht Treaty
B)   Treaty of Rome
C)   Treaty of Lisbon
D)   Montreal Treaty
E)   Treaty of ParisF) A) and D)
G) B) and E)

Question 7

Within the EU, it is the responsibility of the ________ to debate legislation and forward it to the council.

Accepted Answer

A)   Court of Justice
B)   prime ministers
C)   European Commission
D)   European Parliament
E)   European CommunityF) B) and D)
G) C) and D)

Question 8

What resulted from the Andean Pact of 1969?

Accepted Answer

A)   The pact failed to achieve any of its stated objectives due to political and economic problems.
B)   The Andean Pact achieved most of its stated objectives, particularly the harmonization of economic policies.
C)   The dominant political ideology in many of the Andean countries moved toward the democratic end of the political spectrum.
D)   The pact effectively nullified the Galápagos Declaration.
E)   The Andean Pact removed all common external tariffs.F) A) and E)
G) A) and D)

Question 9

In Alexander Yeats's criticism of Mercosur, he says that

Accepted Answer

A)   the slowest growing items in intra-Mercosur trade were cars, buses, agricultural equipment, and other capital-intensive goods.
B)   the trade creation effects of Mercosur outweighed its trade diversion effects.
C)   Mercosur countries were prepared to compete globally once the group's external trade barriers came down.
D)   Mercosur countries were insulated from outside competition by tariffs that run as high as 70 percent of value.
E)   capital was being drawn toward more efficient enterprises.F) D) and E)
G) A) and E)

Question 10

An argument against the North American Free Trade Agreement centered on the fear that ratification would result in

Accepted Answer

A)   low interest rates in the Unites States and Canada.
B)   mass exodus of jobs from the United States into Mexico.
C)   a move toward a common currency for NAFTA member nations.
D)   competition from the members of the European Union.
E)   high inflation in the United States and Canada.F) B) and C)
G) C) and D)

Question 11

The ________ is considered to be the ultimate controlling authority within the European Union.

Accepted Answer

A)   Court of Justice
B)   European Commission
C)   European Council
D)   European Parliament
E)   European CommunityF) A) and B)
G) C) and E)

Question 12

The European Free Trade Association initially consisted of member nations that

Accepted Answer

A)   were not interested in lifting trade barriers.
B)   did not produce industrial goods.
C)   wanted to form an agreement with the United States.
D)   decided not to be part of the European Community.
E)   imposed a common tariff, of 5 to 20 percent, on imported products.F) All of the above
G) A) and D)

Question 13

While the World Trade Organization and other institutions have been working toward achieving a free trade regime, complete success has not yet occurred.

Accepted Answer

A) True 
 B)False

Question 14

The Andean Community now operates as a(n)

Accepted Answer

A)   common market.
B)   economic union.
C)   customs union.
D)   command economy.
E)   political union.F) A) and D)
G) All of the above

Question 15

The euro zone is comprised of the

Accepted Answer

A)   27 member nations of the European Union.
B)   member nations of the European Union and the applicants to the union.
C)   19 member nations who use the euro as their currency.
D)   member nations of the EU and affiliated countries who have pegged their currencies to the euro.
E)   21 member nations that have their members in the European Parliament.F) A) and B)
G) All of the above

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

The European Stability Mechanism was created to

Accepted Answer

A)   help Britain exit from the EU.
B)   replace the European Parliament.
C)   target foreign allies who wanted free trade.
D)   restore confidence in the euro.
E)   act as a political governing body.F) B) and D)
G) B) and C)

Question 18

The six member countries that have embraced a common market are disappointed with the outcome of their economic integration. They want something that entails a closer economic integration and cooperation than a common market and decide to pursue a common currency. They are forming a(n)

Accepted Answer

A)   command economy.
B)   customs union.
C)   efficient market.
D)   free trade area.
E)   economic union.F) B) and D)
G) None of the above

Question 19

Describe the exit by the British government from the EU.

Accepted Answer

On June 23, 2016, and by a narrow margin...

Question 20

The free trade pact known as Mercosur has been successful at creating a full customs union between Brazil and Argentina.

Accepted Answer

A) True 
 B)False

Exam 9: Regional Economic Integration

An argument against the North American Free Trade Agreement centered on the fear that ratification would result in

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Within the EU, it is the responsibility of the ________ to debate legislation and forward it to the council.

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The European Free Trade Association initially consisted of member nations that

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

Correct AnswerverifiedShow Answer

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

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What resulted from the Andean Pact of 1969?

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Greece and Portugal have different wage rates, tax regimes, and business cycles. The two countries have also reacted differently in the past to external economic shocks. The dissimilarities are an example of one of the drawbacks of the euro that economists refer to as the EU not being in a(n)

Correct AnswerverifiedShow Answer

While the World Trade Organization and other institutions have been working toward achieving a free trade regime, complete success has not yet occurred.

Correct AnswerverifiedShow Answer

The euro zone is comprised of the

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The ________ committed European Community members to adopt a common currency by January 1, 1999.

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The ________ is considered to be the ultimate controlling authority within the European Union.

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In Alexander Yeats's criticism of Mercosur, he says that

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The Andean Community now operates as a(n)

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Mercosur was temporarily suspended in 2001 because of a(n)

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Describe the exit by the British government from the EU.

Correct AnswerverifiedOn June 23, 2016, and by a narrow margin...View AnswerShow Answer

The six member countries that have embraced a common market are disappointed with the outcome of their economic integration. They want something that entails a closer economic integration and cooperation than a common market and decide to pursue a common currency. They are forming a(n)

Correct AnswerverifiedShow Answer

Which country has been granted three bailout efforts by the EU in an attempt to prevent a sovereign debt crisis?

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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.

Correct AnswerverifiedShow Answer

The free trade pact known as Mercosur has been successful at creating a full customs union between Brazil and Argentina.

Correct AnswerverifiedShow Answer

The European Stability Mechanism was created to

Correct AnswerverifiedShow Answer

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On June 23, 2016, and by a narrow margin...
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