Mgt chapter 9

Before the United Kingdom decided to exit the EU, how many total countries were involved by 2014?

28

Free trade agreements account for nearly ____ of regional economic agreements.

90%

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.

Which industry is most affected by stipulations of USMCA?

Automobile

Under the Andean Pact, which two members received special concessions based on the size of these countries?

Bolivia Ecuador

Which institution has a monopoly in proposing European Union legislation?

European Commission

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

Interdependency among nations decreases the potential for violent conflict, It can enhance the political weight of those countries in the world.

What are two characteristics of the European Central Bank?

It is meant to be free from political pressure. It was established to ensure price stability.

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

dormant

The goal of NAFTA was to

eliminate tariffs on trade between the nations.

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

free trade

There has been a(n) _____ in regional economic integration in the past two decades.

increase

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

lower

It was acknowledged that one potential effect of NAFTA was that member countries would take advantage of ______ by moving production efforts to Mexico.

lower labor costs

Based on the objectives of the Single European Act, the principle of _____ states that a product standard developed in one EC country should be accepted in another.

mutual recognition

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 Single European Act abolished restrictions on cabotage, which is the

right of foreign truckers to pick up and deliver goods within another member state's borders.

Economic theories suggest that free trade allows countries to

specialize in producing goods and service that they are most efficient at producing.

A key impediment to economic integration is that although a majority of citizens may benefit from free trade, certain groups may lose their jobs to low-cost and low-skilled labor in other countries as was the experience of some U.S. and Canadian workers in the ______ industry following the establishment of NAFTA.

textile

Costa Rica, El Salvador, Guatemala, and other countries formed a common market in the early 1960s that was called

the Central American Common Market.

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

trade creation exceeds trade diversion.

The collapse of the Central American Common Market was a result of

war between Honduras and El Salvador

While the NAFTA agreement provided many protections, it failed to include protections for intellectual property. T/F

False

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

costs

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

Commission

What are two impediments to establishing economic integration?

Concerns over national sovereignty, Costs of integration

The ______ sets interest rates and monetary policy for the EU.

ECB

As the most enduring free trade area in the world, ______ concentrates on the free trade of industrial goods, but not agricultural products.

EFTA

Reginal______integration creates agreements among countries in a specific geographic area in order to reduce and eventually remove tariff and nontariff barriers to the free flow of goods.

Economic

What are two requirements countries must take to qualify for EU membership?

Establish stable democratic government Respect human rights

Which of these trade unions is made up of European countries that decided NOT to be part of the European Community and emphasized free trade in industrial goods?

European Free Trade Association

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

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

Which two groups represent major trading blocks in Europe?

European Union, European Free Trade Association

Because of its economic and political influence, the _____ is considered the most significant trading bloc in Europe.

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

F

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

F

Critics say that the EU is an optimal currency area which is why it is difficult to adopt a single currency. T/F

False

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

Free Trade Area

What is the least integrated form of economic integration?

Free trade area

What are three forms of economic integration?

Free trade area Full political union Common market

Which three long-term members of the EU were NOT receptive to the euro as a common currency as set forth by the Maastricht Treaty?

Great Britain, Sweden, Denmark

In 2010, the IMF agreed to bailout _____ because of fears the country might default on its sovereign debt.

Greece

In the campaign to leave the EU, certain groups voted to stay and others voted to leave. What were two characteristics of those who wanted to leave?

Less educated Older

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

Proponents of NAFTA argued many would benefit from the movement of low-skilled, labor-intensive production to ______, which might have a competitive advantage in this area.

Mexico

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

T

Which agreement was an attempt at regional economic integration in the United States?

North American Free Trade Agreement (NAFTA)

Mercosur is a free trade pact started in 1988 by which two South American economies?

Railway Energy

What are three advantages of regional market integration that can result in cost savings to a business?

Simplified tax regimes Free movement of goods across borders Harmonized product standards

Which three nations are a part of ASEAN?

Singapore Indonesia Philippines

______ is considered the most successful attempt at regional economic integration.

The EU

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?

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.

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

True

The USMCA prohibits duties on music and ebooks.

True

What three countries made up NAFTA?

United States Mexico Canada

Which statement best describes the response by EU members to the introduction of the euro as a common currency?

While many members accepted the euro, several long-term members did not.

The European Stability Mechanism was established by the EU to create _____.

a permanent bailout fund

When an optimal currency area exists, similar underlying structures of economic activity make it more feasible to adopt _____.

a single currency

The Maastricht Treaty committed EU members to

adopt a common currency by January 1, 1999.