Ibus midterm ch 8

36. Which of the following is an example of regional economic integration? a. The European Union b. The British Commonwealth c. The Cingular and AT&T merger d. The Commonwealth of Independent States

a

47. NAFTA is an example of a(n) _____. a. free trade area b. customs union c. common market d. economic union

a

56. Which of the following features refers to the Schengen area in the EU? a. A passport-free travel zone b. An open migration zone for workers c. A common currency zone d. A Non-EU members' zone

a

66. Which of the following is the economic trade agreement between Australia and New Zealand? a. CER b. ASEA N c. APEC d. CAFTA

a

67. _____ is the organization underpinning regional economic integration in Southeast Asia. a. ASEAN b. APEC c. ANZCERT A d. UNASUR

a

7. The crucial principle of GATT/WTO is nondiscrimination, ensuring that countries do not discriminate among its trading partners. a. True b. False

True

8. Every time a WTO country lowers a trade barrier, it has to do the same for all other member countries. a. True b. False

True

9. The GATT differed from the WTO in that the GATT was not considered an organization. a. True b. False

True

45. Which of the following was part of the agenda of the Doha Round? a. Reducing agricultural subsidies in developing countries b. Increasing tariffs in the industries that developed countries might benefit from c. Freeing up trade in services d. Loosening intellectual property protection

c

53. Which of the following is an example of a political union? a. The EU b. The United States c. The British Commonwealth d. The Andean Community

b

54. The European Union (EU) was established when the ____ went into effect in 1993. a. Treaty of Rome b. Maastricht Treaty c. Lisbon Treaty d. ECSC Treaty

b

55. Which of the following terms describes the EU? a. Federation b. Economic union c. Unified states d. Sovereign union

b

59. In which of the following types of economic integration systems will the establishment of a common currency be possible? a. Customs union b. Economic union c. Free trade area d. Common market

b

64. CAFTA refers to _____. a. a regional integration mechanism integrating two existing customs unions (Andean Community and Mercosur) in South America b. a free trade agreement between the United States and five Central American countries and the Dominican Republic c. a proposed free trade area for the entire Western Hemisphere d. a proposed customs union between nations that are present near the Pacific Ocean

b

65. Which of the following is true of the Union of South American Nations (USAN)? a. It is made of nations that are not present in either the Andean Community or Mercosur. b. It is an integration of Mercosur and the Andean Community. c. It is a proposed free trade area integrating the Andean Community and ASEAN. d. Its integration mechanism is modeled after the NAFTA.

b

23. The former Soviet Union is an example of a political union. a. True b. False

True

economies around the Pacific. a. UNASUR b. APEC c. NAFTA d. CAFTA

b

13. TRIPS is a WTO agreement governing the international trade of services. a. True b. False

False

16. All WTO members are obliged to follow WTO rulings on settlement disputes as law. a. True b. False

False

17. The Doha Round primarily aimed at strengthening economic development in developed economies. a. True b. False

False

19. Britain, Denmark, and Sweden are the only three countries which did not join the EU. a. True b. False

False

2. European Economic Community is the official title of European economic integration since 1993. a. True b. False

False

20. All members of the EU have adopted the euro as their currency. a. True b. False

False

22. NAFTA is an example of an economic union. a. True b. False

False

25. Passport-free travel zones can only be set up in political unions. a. True b. False

False

26. All the countries of Europe are part of the European Union (EU). a. True b. False

False

27. NAFTA is a free trade agreement between Latin American countries. a. True b. False

False

29. The UNASUR is a free trade agreement between the United States and five Central American countries and the Dominican Republic. a. True b. False

False

3. The GATT was a multilateral agreement governing the international trade of goods (merchandise) before World War II. a. True b. False

False

30. The Mercosur countries collectively represent the second-largest US export market in Latin America. a. True b. False

False

32. The Trans-Pacific Partnership (TPP) is a multilateral free trade agreement that aims to further liberalize the economies of the entire Western Hemisphere. a. True b. False

False

33. Regional integration deals in Africa show the least amount of protectionism in international trade. a. True b. False

False

35. Due to the slowdown of multilateralism and the acceleration of regionalism, managers are advised to focus their attention more at global than regional levels. a. True b. False

False

4. General Agreement on Tariffs and Trade (GATT) expanded considerably to become the EU. a. True b. False

False

6. The GATT system is an example of a strictly bilateral trading system. a. True b. False

False

5. While emphasizing economic benefits, the most fundamental goal of global economic integration is to promote peace. a. True b. False

True

1. Regional economic integration refers to efforts to reduce trade and investment barriers within one economic region. a. True b. False

True

10. The Multifibre Arrangement (MFA) was in violation of the GATT. a. True b. False

True

11. Local content requirements is an example of a nontariff barrier. a. True b. False

True

12. GATT 1994 refers to the agreement governing the international trade of goods in the WTO. a. True b. False

True

14. The WTO sets time limits for a panel, consisting of three neutral countries, to reach a judgment for trade dispute settlements. a. True b. False

True

15. One of the main objectives for establishing the WTO was to strengthen the trade dispute settlement mechanism. a. True b. False

True

18. The refusal of Japan, the EU, and the US to reduce farm subsidies was one of the reasons for the collapse of the Doha Round. a. True b. False

True

21. A customs union imposes common external policies on nonparticipants in order to combat trade diversion. a. True b. False

True

24. The Andean Community's largest trading partner is the United States. a. True b. False

True

28. The Andean Community is more pro-free trade than Mercosur. a. True b. False

True

31. ACFTA brought China into a free trade agreement with the Association of Southeast Asian Nations. a. True b. False

True

34. From an institution-based view, China's economic development since it joined WTO shows the amount of benefits associated with WTO membership. a. True b. False

True

39. Which of the following is referred to as a multilateral trading system? a. WTO b. EU c. NAFT A d. ASEA N

a

37. The _____ was a multilateral agreement, created in 1948, governing the international trade of goods (merchandise). a. WTO b. GATT c. UN d. EU

b

40. Which of the following agreements was in direct violation of the principles of GATT? a. Trade policy review b. Multifibre Arrangement c. General Agreement on Trade in Services d. Trade-Related Aspects of Intellectual Property Rights

b

41. GATS is a WTO agreement governing _____. a. trade dispute settlement mechanisms b. the international trade of services c. intellectual property rights d. trade policy reviews

b

43. The WTO differs from "GATT 1948" in that the WTO _____. a. has trade in services as its primary trade focus b. has provisions that allows members to review other members' trade policies c. has no rules governing intellectual property rights d. has no mechanism to settle member disputes

b

48. Which of the following characterizes a customs union? a. It requires each member to maintain different external policies regarding non- members. b. It imposes common external policies on non-members. c. It integrates the political and economic affairs of a region. d. It permits the free movement of goods and people among its members.

b

46. A free trade area _____. a. imposes common external policies on nonparticipants in order to combat trade diversion b. permits the free movement of goods and people among member nations c. comprises a group of countries that remove trade barriers among themselves d. coordinates and harmonizes economic policies in order to blend their economies into a single economic entity

c

50. Which of the following is an example of a customs union? a. The former Soviet Union b. The EU (European Union) c. The Andean Community (South America) d. The NAFTA (North American Free Trade Agreement)

c

51. In a(n) ____, members coordinate and harmonize monetary, fiscal, and taxation policies. a. customs union b. common market c. economic union d. free trade area

c

52. A(n) _____ refers to a group of countries that use a common currency. a. political union b. customs union c. monetary union d. trade union

c

57. The Euro is currently used in _____. a. all EU member countries b. all European countries c. 18 EU countries d. Schengen countries only

c

61. The _____ is a free trade agreement among Canada, the United States, and Mexico. a. Andean Community b. ASEAN c. NAFTA d. Commonwealth of Independent States

c

68. Inspired by the EU's success, ASEAN set up an FTA called _____ in 1992. a. NAFT A b. ACFTA c. AFTA d. CAFTA

c

70. Which of the following countries is an original signatory of the Trans-Pacific Partnership (TPP)? a. The United States of America b. Australia c. Chile d. Japan

c

38. The General Agreement on Tariffs and Trade (GATT) expanded considerably into a multilateral trading system called _____. a. EU b. NAFT A c. UN d. WTO

d

42. Which of the following is a WTO agreement regulating intellectual property? a. GATT b. GATS c. MFA d. TRIP S

d

44. The _____ was the only round of trade negotiations sponsored by the WTO to reduce agricultural subsidies, slash tariffs, and strengthen intellectual property protection. a. Copenhagen Consensus b. WTO Ministerial Conference of 1999 c. Uruguay Round d. Doha Round

d

49. The EU is an example of a(n) ____. a. free trade area b. customs union c. common market d. economic union

d

58. Which of the following regions describes the euro zone? a. A region that comprises EU members without a common currency b. A region that comprises all EU members c. A region that has passport-free traveling d. A region that has a common currency

d

60. Which of the following is an effect of adopting the euro as a currency for EU members? a. It implements independent monetary policies for each nation. b. It provides unlimited flexibility in fiscal policy making. c. It increases currency conversion costs. d. It facilitates direct and transparent price comparison.

d

62. Which of the following is true of the customs unions in South America? a. The Andean Community's largest trading partner is China. b. Mercosur is more pro-free trade than the Andean Community. c. Andean Community and Mercosur countries are today integrated into the FTAA. d. Mercosur is relatively more protectionist than the Andean Community.

d

63. Which of the following countries was the Andean Community's largest trading partner? a. Germany b. Mexico c. China d. United States

d