Chapter 9 Connect

According to Ross Perot, ratification of NAFTA would result in the loss of about ______ million jobs from the United States and Canada, as firms from these countries sought to capitalize on lower wages in Mexico

5.9

Free trade agreements account for nearly ____ of regional economic agreements

90%

Mercosur is a free trade pact started in 1988 by which two South American economies? (Check all that apply)

Argentina Brazil

The European Parliament must approve all members of the European ______ before this body can begin its work

Commission

In 2001, the ______ Community, made up of Kenya, Uganda, and Tanzania, tried to reinvigorate their trade agreement after it collapsed 24 years before

East African

Which institution has a monopoly in proposing European Union legislation?

European Commission

Which organization is playing an emerging role in competition policy within the EU and serves as a potential threat to companies wishing to do business there?

European Commission

What are the four main institutions responsible for determining economic policy in the EU?

European Parliament Court of Justice European Commission Council of the European Union

The European Community (EC) became the ______ in 1993

European Union

One of the reasons the European Union was originally formed was because

Europeans desired a lasting peace after enduring two devastating world wars

The impending British exit from the EU is seen by other smaller member nations as a problem because Britain acts as a counterweight to the economic power of _____

Germany

Under which treaty was the power of the European Parliament increased?

Libson

What committed EU members to adopt a common currency by January 1, 1999?

Maastricht Treaty

The trade pact developed in 1988, initially between Argentina and Brazil, is called ______

Mercosur

What three countries made up NAFTA?

Mexico Canada United States

The Treaty ___ of established the European Community in 1957

Rome

Which three nations are a part of ASEAN? (Check all that apply)

Singapore Philippines Indonesia

Which level of economic integration is present in an agreement that has no barriers to trade among member countries and allows factors of production (such as labor) to move freely among the members?

a common market

It is easiest to establish regional economic integration among

a limited number of adjacent countries

The European Commission, to maintain the level of competition in the EU, is increasingly willing to impose conditions on businesses before allowing

a merger or acquisition

Which two reasons are given as to why Europeans decided to establish a single currency?

a single currency makes it easier to compare prices across Europe businesses would achieve significant savings from having to handle just one currency

The Maastricht Treaty committed EU members to

adopt a common currency by January 1, 1999

The euro was established because a _____ currency would make it easier for Europeans to compare prices

common

A(n) ______ allows the free movement of factors of productions among member countries, eliminates trade barriers among member countries, and has a common external trade policy

common market

The European Parliament is considered a _____ body

consultative

An argument against regional free trade agreements contends that the benefits have been oversold, but ______ have often been ignored

costs

When high-cost domestic producers have been replaced by low-cost producers within a free trade zone, this is called trade __

creation

In moving toward economic and political integration, a(n) ______ union removes trade barriers among member nations and establishes a common trade policy for nonmembers

customs

How do members of the European Parliament gain their seat?

directly elected by the citizens

Since the WTO has a limited scope, the risk remains that regional economic integration will result in trade __

diversion

When lower-cost external suppliers are replaced by higher-cost suppliers within a free trade zone, this is called trade __.

diversion

There are presently 19 trade blocs in Africa, and many of these blocs have been _____ for years

dormant

A(n) ______ union adds more economic integration to a common market by requiring a common currency, a common monetary and fiscal policy, and harmonization of tax rates

economic

The goal of NAFTA was to

eliminate tariffs on trade between the nations

In 2001, Kenya, Uganda, and Tanzania, members of the East African Community, tried to

establish a customs union

T/F: The greater the number of countries involved in economic integration, the easier it is to reach an agreement among the countries

false

T/F: The introduction of the euro created greater competitive pressure in the European automobile industry which has resulted in higher prices for the consumer

false

T/F: Opponents of NAFTA felt that the program would result in a large exodus of jobs from Mexico

false reason: opponents felt that there would be a large exodus of jobs from the United States and Canada

T/F: The political structure responsible for economic policies in the EU consists of a single office known as the Court of Justice

false reason: the political structure for economic policy in the EU consists of four main institutions

Economic theories advocate for __ trade and investment that will allow participating countries to gain economically. (Choose free or restricted.)

free

The Association of Southeast Asian Nations was formed with the intent to foster _____

free trade

A lack of barriers to the trade of goods and services among member countries is found in a(n)

free trade area

The establishment of the euro is seen as a surprising political accomplishment because it required participating governments to

give up control over monetary policy

During the campaign for leaving the EU, one of the recent claims said that leaving the EU would allow the British to take back control of _____

immigration

When the euro-zone economies are NOT growing at the same rate, a common monetary policy linked to common currency may mean that ______ rates may not reflect any one individual country's needs

interest

Which two political factors support the idea for economic integration of nations through trade?

it can enhance the political weight of those countries in the world interdependency among nations decreases the potential for violent conflict

What are two potential problems with an economic union?

it requires a coordinating bureaucracy there is a surrender of some national sovereignty

The creation of a single market creates _____ costs of doing business

lower

Regional trade blocs can possibly occur in markets that are protected from outside competition because ______ barriers are in place, and the WTO does not cover some of these types of barriers

nontariff

African countries have attempted to form a continental trade agreement, but have been stymied by significant ______ turmoil

political

Based on economic theories, free trade is viewed as a ______ as all participating nations stand to gain

positive-sum game

The Treaty of Lisbon created the position of ______ of the European Council

president

One way to deal with euro economies that are NOT growing in unison is to engage in fiscal transfers, which involves taking money from ______ and giving it to areas that are not as successful

prosperous regions

The euro is the ______-most traded currency in the world

second

What are three advantages of regional market integration that can result in cost savings to a business? (Check all that apply)

simplified tax regimes harmonized product standards free movement of goods across borders

The number of votes a country gets in the European Council is related to the

size of the country

Which group is the overall controlling authority within the European Union (EU) that must approve draft legislation from the European Commission before it becomes EU law?

the European Council

What two political factors led to the development of the European Union? (Check all that apply)

the devastation of western Europe during the two world wars Europe's desire to hold its own on the world's political and economic stage

What are two potential costs Britain might face now that its exit from the EU is complete?

there might be a decrease in the rate of economic growth some multinationals may move operations to other EU countries to access the single market

What are two reasons for a customs union being put in place?

to establish a common external trade policy to eliminate trade barriers between member countries

______ is an economic term that refers to high-cost domestic producers being replaced by low-cost producers within the free trade area

trade creation

Some economists argue that regional free trade agreements will provide global benefits only if

trade creation exceeds trade diversion

______ is an economic term defined as replacing lower-cost external suppliers with high-cost suppliers within the free trade area

trade diversion

T/F: One political reason for economic integration is the potential to minimize violent conflict between nations

true reason: nations that are dependent on each other for economic reasons are less likely to participate in violent conflicts with each other

After the British government formally notified of its intent to exit the European Union, the country had _____ to negotiate the terms of the exit

two years