IB Quiz 9

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? A) efficiency gain B) trade deficit C) trade diversion D) trade creation

trade creation

When higher-cost external producers are replaced by lower-cost external producers within the free trade area, ________ occurs. A) trade diversion B) trade deficit C) trade distortion D) trade creation

trade creation

Which regional trade bloc includes Kenya, Uganda, and Tanzania? A) EAC B) FTAA C) EFTA D) DR-CAFTA

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. A) European Court of Justice B) European Commission C) Council of Europe D) European Parliament

European Commission

Regional economic integration offers significant opportunities for businesses. Which of the following is one of these opportunities? A) The business environment within each grouping has become more competitive B) Over time, price differentials across nations will decline in a single market C) Markets that were formerly protected from foreign competition are increasingly open D) There is a likely long-term improvement in the competitive position of many firms within the areas

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

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. A) Italy B) France C) Germany D) Sweden

Sweden

The steady rise of regional economic integration has recently seen some retrenchment. What factor is considered to be primarily responsible for this drawback? A) Increasing immigration B) Increasing globalization C) The rise of populist politics D) The collapse of governments in the Middle East and North Africa

The rise of populist politics

One of the impediments to integration arises from A) The fact that economic integration aids a minority B) concerns that too many multinational firms will lose investors C) concerns over national sovereignty D) the fact that a nation as a whole typically does not benefit

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. A) common market B) free trade area C) political union D) customs union

customs union

Identify the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements. A) economic unions B) common markets C) customs unions D) free trade areas

free trade areas

Initially, the Andean Community struggled, but in the late 1980s, this trend started to reverse when A) governments of Latin America began to adopt free market economic policies B) the majority of African countries agreed to a single currency C) Brazil and Argentina agreed to reduce tariffs D) the United States agreed to provide protection for intellectual property rights

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

________ 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. A) Regional economic integration B) Unrestricted trade C) Foreign direct investment D) Government intervention

Regional economic integration

The basic objective of ASEAN is to foster freer trade among member countries and to achieve cooperation in their industrial policies. ASEAN can be found in which location? A) South America B) Central Asia C) Southeast Asia D) Sub-Saharan Africa

Southeast Asia

What is the ultimate controlling authority within the EU because it has the power to turn legislation into law? A) the European Council B) the European Court of Justice C) the European Parliament D) the European Commission

the European Council