mtk 310 ch. 9
3 forms of economic integration
- common market - full political union - free trade area
2 impediments to establishing economic integration?
- concerns over national sovereignty - costs of integration
2 political factors that led to the development of the EU?
- devastation of western europe during the 2 world wars - europe's desire to hold its own on the world's political and economic stage
which 2 mexico-based industries were granted special protection from foreign direct investment under NAFTA?
- energy - railway
what are 2 expected results of the single european act?
- give EC firms additional opportunities for economies of scale - lower the costs of doing business between member countries
2 characteristics of the european central bank?
- it is meant to be free from political pressure - it was established to ensure price stability
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?
- older - less educated
what are 2 reasons for customs being put in place?
- to establish a common external trade policy - to eliminate trade barriers between member countries
after british government formally notified of its intent to exist the european union, the country had ______ to negotiate the terms of the exit
2 years
as of ______, all members of WTO were participating in one or more regional trade agreements
2020
how many regional trade agreements are currently in force?
303
3 countries included in the NAFTA agreement when it went into place in 1994
US, Mexico, Canada
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
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?
common market
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when high-cost domestic producers have been replaced by low-cost producers within a free trade zone, this is called trade ________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 ______ union removes trade barriers among member nations and establishes a common trade policy for nonmembers
customs
when lower-cost external suppliers are replaced by higher-cost suppliers within a free trade zone, this is called trade _____
deficit
since the WTO has a limited scope, the risk remains that regional economic integration will result in trade _____
diversion
a _______ 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
because of its economic and political influence, the ______ is considered the most significant trading block in europe
european union
which 2 groups represent major trading blocks 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
critics say that the EU is an optimal currency area which is why it is difficult to adopt a single currency
false
the greater the number of countries involved in economic integration, the easier it is to reach an agreement among the countries
false
while the NAFTA agreement provided many protections, it failed to include protections for intellectual property
false
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
the establishment of the euro is seen as a surprising political accomplishment because it required participating governments to
give up control over monetary policy
which country was always considered a major holdout in the EU because it did NOT agree to accept the euro as a common currency?
great britain
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
there has been a ______ in regional economic integration in the past 2 decades
increase
what committed EU members to adopt a common currency by january 1, 1999?
maastricht treaty
the main reason great britain did NOT agree to accept the euro as a common currency is because doing so would require great britain to relinquish control of the monetary policy, and as a result, ______ would be diminished
national sovereignty
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
a _____ union consists of a central governing body that regulates the economic, social, and foreign policy of member states
political
based on economic theories, free trade is viewed as a ______ as all participating nations stand to gain
positive-sum game
what effect did the single european act have on GDP in the first 15 years?
raised GDP between 2-5%
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
the euro is the _____ - most traded currency in the world
second
to signify the importance of the ______, the european community decided to change its name to the european union once the act took effect
single european act
economic theories suggest that free trade allows countries to
specialize in producing goods and service that they are most efficient at producing
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
one political reason for economic integration is the potential to minimize violent conflict between nations
true
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