IBUS 380 - Chapter 9

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

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

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) the fact that a nation as a whole typically does not benefit d) concerns over national sovereignty

d) concerns over national sovereignty

Which regional trade bloc includes Kenya, Uganda, and Tanzania? a) EAC b) EFTA c) CAFTA d) FTAA

a) EAC

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) Great Britain b) France c) Greece d) Sweden

a) Great Britain

Identify the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements. a) free trade areas b) customs unions c) common markets d) economic unions

a) free trade areas

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) trade creation b) efficiency gain c) trade deficit d) trade diversion

a) trade creation

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) customs union c) free trade area d) political union

b) customs union

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 Parliament b) Court of Justice c) European Commission d) European Council

c) European Commission

When higher-cost external producers are replaced by lower-cost external producers within the free trade area, ___________ occurs. a) trade distortion b) trade diversion c) trade deficit d) trade creation

d) trade creation

____________ 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) Foreign direct investment b) Government intervention c) Regional economic integration d) Unrestricted trade

c) Regional economic integration