Intl Business Ch 8
According to the textbook, by entering into _____, groups of countries aim to reduce trade barriers more rapidly than can be achieved under the WTO. A. regional agreements B. synergistic agreements C. global agreements D. local agreements
A
An agreement between countries in a geographic region to reduce tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other is referred to as: A. regional economic integration. B. cross-cultural economic integration. C. geographic economic-political integration. D. cross-cultural economic-political integration.
A
Because many governments have accepted part or all of the case for intervention, _____ have proved to be only an ideal. A. unrestricted free trade and FDI B. restricted free trade and international mergers C. exporting and importing D. customs unions and common markets
A
In a _____, theoretically, no discriminatory tariffs, quotas, subsidies, or administrative impediments are allowed to distort trade between members. A. free trade area B. collective bargaining act C. common exchange policy D. customs exchange committee
A
The European Community became the European Union with the signing of: A. the Maastricht Treaty. B. the Warsaw Pact. C. The Treaty of Rome. D. the Unification Treaty
A
The European Union is the product of two political factors. The devastation of Western Europe during the two world wars and: A. the European nations' desire to hold their own on the world's political and economic stage. B. the European nations' unawareness of potential economic benefits. C. the European nations' desire to make a coordinating bureaucracy accountable to the citizens of member nations. D. the emergence of United States as an economic superpower.
A
The specter of the _____ turning into economic fortresses that shut out foreign producers with high tariff barriers is worrisome to those who believe in unrestricted free trade. A. EU and NAFTA B. EFTA and UN C. UN and WTO D. NAP and IMF
A
There are now two trade blocs in Europe. These are the: A. European Union and European Free Trade Association. B. European Federation and North Atlantic Trade Block. C. North Atlantic Trade Block and European Union. D. European Federation and European Trade Association.
A
Which European institution is responsible for proposing EU legislation, implementing it, and monitoring compliance? A. The European Commission B. The European Council C. The Court of Justice D. The European Judicial Court
A
Which of the following has the highest level of integration? A. An economic union B. A free trade area C. A customs union D. A common market
A
Which of the following is NOT a key economic criterion for a country to join the EU? A. High tourism revenues B. A high degree of price stability C. Stable exchange rates D. Converged long-term interest rates
A
Which two revolutions occurred in Europe in the late 1980s that set the course for eventual adoption of the European Union? A. The collapse of communism and adoption of the Single European Act. B. An increased reliance on communism and increased trade barriers. C. The collapse of communism and adoption of the European Parliament. D. An increased reliance on totalitarianism and adoption of NAFTA.
A
_____ occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area. A. Trade diversion B. Trade qualification C. Trade synergy D. Trade creation
A
In the context of regional trade integration, concerns about _____ arise because close economic integration demands that countries give up some degree of their control over such key policy issues as monetary policy, fiscal policy, and trade policy. A. cost B. national sovereignty C. financial stability D. cultural uniformity
B
Like the common market, a(n) _____ involves the free flow of products and factors of production between members and the adoption of a common external trade policy. A. free trade area B. economic union C. global union D. customs union
B
The North American Free Trade Agreement is an example of: A. western economic integration B. regional economic integration C. eastern economic integration D. global economic integration
B
The _____ was born of a frustration among EC members that the community was not living up to its promises. A. European Unification Act B. Single European Act C. European Free Trade Act D. European Common Commerce Act
B
The _____, which now accounts for 732 members, is directly elected by the populations of the member states. A. European Committee B. European Parliament C. European Union D. European Task Force
B
The original forerunner of the EU, the _____ was formed in 1951 by Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands. A. European Union B. European Coal and Steel Community C. European Agricultural and Energy Union D. European Textiles and Agricultural Community
B
The purpose of the _____ was to have a single market in place by December 31, 1992. A. North Atlantic Sovereignty Act B. Single European Act C. European Primacy Act D. European Sovereignty Act
B
The two main reasons that have made economic integration difficult to achieve are: A. concerns over the safety of travel from one nation to another and concerns over dissimilar political ideologies. B. concerns over costs and concerns over national sovereignty. C. concerns over immigration and emigration and concerns over economic and political ideologies. D. concerns over the safety of travel from one nation to another and concerns over national sovereignty.
B
Where does the European Parliament meet at in the European Union? A. Great Britain B. France C. Germany D. Spain
B
Which countries are members of the free trade area known as MERCOSUR? A. Chile, Mexico, Columbia, and Paraguay. B. Argentina, Brazil, Paraguay, and Uruguay. C. Chile, Brazil, Uruguay, and Columbia. D. Mexico, Columbia, Paraguay, and Uruguay.
B
Which four countries are currently members of the European Free Trade Association? A. Ireland, Iceland, Denmark, and Belgium B. Norway, Iceland, Switzerland, and Liechtenstein C. Finland, Great Britain, Belgium, and Denmark D. Sweden, Norway, Austria, and Finland
B
Which institution is comprised of one judge from each country, and is the supreme appeals court for EU law? A. The European Parliament B. The Court of Justice C. The Council of the European Union D. The European Commission
B
Which of the following EU countries has stayed out of euro zone because of an implied loss of national sovereignty? A. Turkey B. Denmark C. Hungary D. Germany
B
Which of the following is NOT one of the four main institutions in the political structure of the European Union? A. The European Council B. The European Social Committee C. The European Commission D. The European Parliament
B
Which of the following provides the closest example to a political union? A. The European Union B. The United States C. NAFTA D. MERCUSOR
B
Which of the following was NOT one of the purposes of the Single European Act? A. Remove all frontier controls between EU countries. B. Remove the principle of "mutual recognition" as it pertains to product standards. C. Open public procurement to nonnational suppliers. D. Lift barriers to competition in the EC's retail banking and insurance businesses.
B
Which type of agreement is the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements? A. Customs union agreement B. Free trade agreement C. Common market agreement D. Political union agreement
B
A central political apparatus that coordinates the economic, social, and foreign policy of its member states is a(n): A. economic union. B. customs union. C. political union. D. free trade area.
C
A common market includes all of the following characteristics, EXCEPT: A. factors of production are allowed to move freely between members. B. there are no restrictions on immigration between members. C. harmonization of members' tax rates, and a common monetary and fiscal policy. D. there are no restrictions on the cross-border flow of capital between members.
C
During the establishment stage, The European Free Trade Association's emphasis has been on free trade in: A. services. B. agricultural products. C. industrial goods. D. construction materials.
C
For participating countries, a drawback of a single currency in Europe is that: A. costs for doing business will increase. B. it will be more difficult to attract imports. C. national authorities will lose control over monetary policy. D. it will be more difficult to compare prices across Europe.
C
If the U.S. started to import textiles from Mexico according to a free trade agreement, but the U.S. previously acquired textiles from Costa Rica for less money, what kind of trade situation would the U.S. be in? A. Trade generation B. Trade creation C. Trade diversion D. Trade notification
C
Many now see the _____ as the emerging economic and political superpower of the same order as the United States and Japan. A. European Federation B. North Atlantic Trade Block C. European Union D. North Atlantic Federation
C
The _____, which plays an important role in the EU, has been directly elected by citizens of the EU countries since the late 1970s. A. North Atlantic Parliament B. North Atlantic Trade Commission C. European Parliament D. European Trade Commission
C
The most enduring free trade area in the world is the: A. Asian Free Trade Association. B. MERCOSUR. C. European Free Trade Association. D. North American Trade Association.
C
The phenomenon that occurs when high-cost domestic producers are replaced by low-cost producers within the free trade is called: A. trade alteration. B. trade qualification. C. trade creation. D. trade diversion.
C
Which of the following is NOT a benefit of the Euro? A. A common currency will make it easier to compare prices across Europe. B. Producers will be forced to look for ways to reduce their production costs to maintain their profit margins. C. EU having an advantage of being an optimal currency area and hence increased interest rates. D. A common currency will should give a strong boost to the development of a highly liquid pan-European capital market.
C
Which of the following selections accurately depicts the levels of economic integration, from least integrated to most integrated? A. Common market, economic union, full political union, free trade area, and customs union B. Economic union, common market, free trade area, full political union, and customs union C. Free trade area, customs union, common market, economic union, and full political union D. Full political union, free trade area, common market, customs union, and economic union
C
A _____ eliminates trade barriers between member countries and adopts a common external trade policy. A. free trade area B. global union C. tariff union D. customs union
D
By 2008, _____ WTO members had notified the organization of participation in one or more regional trade agreements. A. one-third of B. one half of C. two-thirds of D. almost all
D
For years, _____ has functioned as a common market, although it has now become an imperfect economic union. A. EFTA B. NAFTA C. MERCUSOR D. EU
D
In 1992, the _____ won the right to opt out of any single currency agreement. A. German B. Russian C. Spanish D. British
D
In 2000, a proposed merger between Time Warner of the United States and EMI of the United Kingdom was withdrawn by _____, which expressed concern that the proposed merger would create a dominant player in the global music industry. A. the Council of the European Union B. the European Parliament C. the Court of Justice D. the European Commission
D
In a _____, all barriers to trade of goods and services are removed between member countries. A. collective bargaining B. unionized territory C. no man's land D. free trade area
D
In theory, _____ rules should ensure that a free trade agreement does not result in trade diversion. A. International Monetary Fund B. World Bank C. United Nations D. World Trade Organization
D
NAFTA stands for: A. North Asian Free Trade Agreement. B. North African Free Trade Association. C. North Atlantic Free Trade Agreement. D. North American Free Trade Association.
D
Nowhere has the movement toward regional economic integration been more successful than in: A. Africa. B. South America. C. Asia. D. Europe.
D
Similarities in the underlying structure of economic activity make it feasible to adopt a single currency and use a single exchange rate as an instrument of macroeconomic policy in a(n): A. political union. B. economic union. C. double currency area. D. optimal currency area.
D
The European Commission's role in _____ policy has become increasingly important in recent years. A. FDI B. security C. legal D. competition
D
The development of a pan-European, euro-denominated capital market will increase the range of investment open to: A. communist countries. B. socialist economies. C. government officials. D. individuals and institutions.
D
When were euro notes and coins issued across Europe, replacing national currencies? A. January 1994 B. January 1998 C. January 2000 D. January 2002
D
Which of the following countries is currently in the European Union? A. Turkey B. Moldova C. Belarus D. Romania
D
Which three countries implemented NAFTA? A. Panama, Mexico, and the United States. B. Canada, Brazil, and the United States. C. United States, Argentina, and Mexico. D. Canada, Mexico, and the United States.
D
With the signing of the _____ in 1957, the European Community was established. A. Treaty of Paris B. Treaty of Brussels C. Treaty of Switzerland D. Treaty of Rome
D
_____ now has the right to vote on the appointment of commissioners as well as veto some laws. A. The European Commission B. The Court of Justice C. The Council of the European Union D. The European Parliament
D
A firm cannot serve the whole EU or North American market from a single location; it has to produce the product in each of the 27 EU countries or the 3 NAFTA countries.
false
A free trade area has a higher level of integration than a common market.
false
Due to NAFTA, Mexico is now viewed as an unstable democratic nation.
false
In 1991, Argentina, Brazil, Chile, and Bolivia implemented an agreement known as MERCOSUR to start reducing barriers to trade between each other.
false
It is harder to establish a free trade and investment regime among a limited number of adjacent countries than among the world community.
false
One of the objectives of the Single European Act was to establish more stringent restrictions on foreign exchange transactions between member countries.
false
One reason for the rise in the value of the euro was that the flow of capital into the United States had increased in 2001.
false
The European Committee has been directly elected by citizens of the EU countries since the late 1970s.
false
The European Council is composed of the heads of state of the EU's member nations and the president of the European Commission.
false
The European Parliament represents the interests of member states and is the ultimate controlling authority within the EU.
false
The Treaty of Athens provided for the creation of a common market for the European Union.
false
The UN began as a customs union and has moved beyond this point.
false
The euro is now used by 18 of the 25 member states of the European Union; these 18 states are members of what is often referred to as the euro zone.
false
The implied loss of national sovereignty to the ECB underlies the decision by Great Britain, Germany, and Denmark to stay out of the euro zone for now.
false
The two main institutions in the political structure of the EU are the European Commission and the European Parliament.
false
Throughout the more recent years, the European Commission's role in competition policy has become stagnant.
false
To signify the importance of the Single European Act, the European Union decided to change its name to the European Community once the act took effect.
false
Trade distribution occurs when higher-cost external suppliers replace lower-cost suppliers within the free trade area.
false
World Trade Organization members are required to notify the UN of any regional trade agreements in which they participate.
false
A customs union eliminates trade barriers between member countries and adopts a common external trade policy.
true
An economic union involves the free flow of products and factors of production between members and the adoption of a common external trade policy.
true
Because many governments have accepted part or all of the case for intervention, unrestricted free trade and FDI have proved to be only an ideal.
true
Economic theories suggest that free trade and investment is a positive-sum game, in which all participating countries stand to gain.
true
Establishing the euro required participating national governments not only to give up their own currencies, but also to give up control over monetary policy.
true
Europe has two trade blocs: the European Union and the European Free Trade Association.
true
Given the central role of knowledge in stimulating economic growth, opening a country to FDI also is likely to stimulate economic growth.
true
In a common market, labor and capital are free to move, as there are no restrictions on immigration, emigration, or cross-border flows of capital between markets.
true
In a free trade area, all barriers to the trade of goods and services among member countries are removed.
true
One major debate now being waged in Europe is whether the council or the parliament should ultimately be the most powerful body of the EU.
true
One notable trend in the global economy in recent years has been the accelerated movement toward regional economic integration.
true
One way of dealing with divergent economic effects within the euro zone is for the EU to engage in fiscal transfers, taking money from prosperous regions and pumping it into depressed regions.
true
Protection of intellectual property rights was one of the contents of NAFTA.
true
The European Commission is run by a group of commissioners appointed by each member country for five-year renewable terms.
true
The European Parliament has 732 members which are directly elected by the populations of the member states.
true
The Single European Act has had a significant impact on the EU economy.
true
The benefits of regional integration are determined by the extent of trade creation, as opposed to trade diversion.
true
The development of a pan-European, euro-dominated capital market will increase the range of investment options to both individuals and institutions.
true
The need for a united Europe to deal with the United States and the politically alien Soviet Union loomed large in the minds of many of the EC's founders.
true
Trade creation occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.
true
While the move toward regional economic integration is generally seen as a good thing, some observers worry that it will lead to a world in which regional trade blocs compete against each other.
true