IB CHP 9

To achieve full economic union, the European Union introduced a common currency, the euro, controlled by a central EU bank. Although most member states have signed on, ________ remains an important holdout.

Great Britain

In a free trade area, countries are not allowed to determine their own trade policies with nonmembers.

false

The European Parliament is the primary legislative body within the European Union.

false

The emergence of single markets will make the business environment within each grouping less competitive.

false

There is consensus that EU is what economists would call an optimal currency area.

false

Trade diversion occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.

false

The basic objective of ASEAN is to foster freer trade among member countries and to achieve cooperation in their industrial policies. The progress of ASEAN is best described as

limited

When higher-cost external producers are replaced by lower-cost external producers within the free trade area, ________ occurs.

trade creation

The movement toward regional economic integration has been most successful in Europe.

true

While a nation as a whole may benefit significantly from a regional free trade agreement, certain groups within the country may lose.

true

Which regional trade bloc includes Kenya, Uganda, and Tanzania?

EAC

The emerging role of the ________ in competition policy suggests the EU is increasingly willing and able to intervene and impose conditions on companies proposing mergers and acquisitions.

European Commission

Regional economic integration offers significant opportunities for businesses. Which of the following is one of these opportunities?

Markets that were formerly protected from foreign competition are increasingly open.

________ can be seen as an attempt to achieve additional gains from the free flow of trade and investment between countries beyond those attainable under global agreements.

Regional economic integration

Identify the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements.

free trade areas

Initially, the Andean Community struggled, but in the late 1980s, this trend started to reverse when

governments of Latin America began to adopt free market economic policies.

Country A and Country B entered into a free trade agreement recently. After this, Country A started importing heavy machinery from Country B, which Country A had previously produced domestically at a higher cost. Which of the following has occurred in this scenario?

Trade Creation

One of the impediments to integration arises from

concerns over national sovereignty.

The EU began as a ________, which eliminates trade barriers between member countries and adopts a common external trade policy, but does not allow free movement of factors of production between member nations.

customs union

What is the ultimate controlling authority within the EU because it has the power to turn legislation into law?

the European council