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when high-cost domestic producers have been replaced by low-cost producers within a free trade zone, this is called trade ________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