BA 310 Chapter 3

In 1969, frustrated by the lack of progress in LAFTA, Bolivia, Chile, Colombia, Ecuador, and Peru joined in creating the Andean Group, which aimed to create economic integration through reduced taxes, a common external tariff, and investment in the poorer industrial areas of their respective countries.

True

In 2003, ASEAN leaders agreed to establish an ASEAN Community based on three pillars: ASEAN Security Community; ASEAN Economic Community; and ASEAN Socio-Cultural Community.

True

NAFTA is a comprehensive free-trade agreement among Canada, United States, and Mexico that addresses issues ranging from protection of workers' rights and the environment to phased reduction of tariff and non-tariff trade barriers, which were finally eliminated in 2009.

True

Remote regions with small local markets which Paul Collier calls the "bottom billion," are located in Central Asia; East, Central and West Africa; and the Pacific Islands.

True

The World Bank's World Development Report (WDR), titled "Reshaping Economic Geography," analyzes trade and regional economic integration through the lens of economic geography (i.e., market size, location, and openness to trade). The WDR concludes that positive changes within these three categories are essential for successful regional integration.

True

The appropriate approach for countries interested in regional integration could include the following three fundamentals: start small, think global, and compensate the least fortunate.

True

Through various treaties such as the Maastricht Treaty, the Copenhagen Treaty, the Treaty of Nice, and the Lisbon Treaty, the EU is deepening and strengthening its institutional (economic, political, social, and defense) linkages; this will hopefully, enable the EU to act as one country that will effectively compete with the U.S.

True

With uncertainty surrounding the outcome of the Doha Round of trade negotiations, countries (large and small) are clamoring for bilateral or regional trade agreements to meet their specific agendas causing economists to be concerned about the prospects of creating a truly open global economic system that benefits all countries.

True

The Maghreb Union consists of Algeria, Libya, Mauritania, Morocco, and _____.

Tunessia

ASEAN's current membership stands at how many countries?

10

How many of the 27 EU member countries are permitted to use the euro as their currency?

17

According to the text, which of the following is the third stage of regional integration?

A common market

Abolition of restriction on factor movements is part of which stages of regional integration?

A common market and an economic union

According to the text, which of the following is NOT a stage of regional integration?

A embargo Union

Common external tariffs and quota system is part of all of the stages of regional integration EXCEPT which one?

A free trade era

Of the following, which is NOT true about the future of ASEAN?

A growing ASEAN concern is the economic ascendancy of North Korea.

The World Bank's (2009) World Development Report does which of the following?

Analyzes trade and regional economic integration through the lens of economic geography

In which country is the EU headquartered?

Belgium

With the anticipated success of NAFTA, formal discussions to establish a Free Trade Area of the Americas began under the _____ administration.

Clinton

In which country is ASEAN headquartered?

indonesia

All of the following statements about the EU are true EXCEPT:

its founding members consisted of ten countries.

A group of free trade member countries that have adopted a common external tariff with nonmember countries is called a(n) _____.

Customs union

A market formed when members of a common market agree to implement common social programs and coordinated macroeconomic policies that would lead to the creation of a single regional currency and a regional apex central bank is known as a(n) _____.

Economic Union

Of the following, which is NOT a cost of regional integration?

Encouraging economies of scale in production

A growing ASEAN concern is the economic ascendancy of Turkey, which as a major low-cost manufacturing center, has been one of the world's most attractive destinations for foreign direct investment.

False

ASEAN, headquartered in New Delhi, India, was established in August 1967 by five founding members: India, Malaysia, the Philippines, Singapore, and Thailand.

False

Although market access is essential for economic growth, proximity to major world markets is the biggest liability for just-in-time production, exports of perishable goods and tradable services.

False

Both free-trade areas and customs unions include abolition of restrictions on factor movements.

False

CAFTA is the most highly evolved example of regional integration in the world.

False

Geographically, only about 25 percent of Turkey's land mass is in Europe.

False

One could argue that regional and global integration are not complements, but substitutes to economic development of a particular region.

False

Of the following statements regarding the euro, which is NOT true?

The U.K., Denmark, and Sweden use the euro as their currency.

Which of the following is NOT an objective of NAFTA?

The creation of a uniform currency in North America

Of the following statements about regional blocs close to major world markets, which is NOT true?

The oil-rich regional economy of the Middle East and North Africa has been growing fast and creating jobs for its population.

Of the following, which is NOT a benefit of regional integration?

Reducing the power of national government

According to the text, which of the following is NOT a regional bloc close to world markets?

Russia

_____ refers to the process of allowing efficient geographic distribution of business activities within and among countries.

Spatial transformations

Three countries, X, Y, and Z are part of a member area where they have eliminated all barriers to trade such as tariffs, quotas, and non-tariff barriers like border restrictions, while at the same time keeping their own external tariffs against nonmembers. Such an area could be described as a(n) _____ area.

Free Trade

According to the text, which of the following is NOT a major world market?

Germany

The largest country in the EU, in terms of population, is _____.

Germany

How does ASEAN differ from the EU?

It does NOT call for the free movement of labor across ASEAN.

Of the following statements about ASEAN, which is NOT true?

Its current membership stands at 15 countries.

The Treaty of Montevideo created _____.

MERCOSUR

According to the Cultural Perspective box in Chapter 03, when French President, Nicolas Sarkozy, assumed his six-month European Union presidency in July 2008, the first initiative he launched was the Union for the _____.

Mediterranean

Of the following, which is NOT a primary reason why countries are now seeking to pursue regional integration at the expense of multilateral trade liberalization?

NAFTA is pushing the EU to pursue regional integration

The union created when member countries of an economic and monetary union work closely with one another to arrive at common defense and foreign policies and behave as a single country is known as a(n) _____.

Political union

All of the following statements about regional integration are true EXCEPT:

regional integration should initially address a broad, ill-defined area of cooperation.

When the various regional integration blocs are analyzed from an economic geography perspective, they fall under three general categories - regional blocs close to major world markets, remote regions with large local markets, or _____.

remote regions with small local markets

ASEAN has two main objectives: 1) to accelerate economic growth, social progress, and cultural development in the region; and 2) _____.

to promote regional peace and stability