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Exam 8: Regional Economic Integration

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Question 41

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The term "Fortress Europe" refers to:

A) the military prowess of European nations
B) the perception that the European Union is designed to protect the European continent from the import of foreign produced goods
C) the unwillingness of European nations to consider forming trade relationships
D) the economic stability of the European continent
E) the economic strength and mercantilist attitude of European governments

F) A) and D)
G) C) and D)

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Question 42

Multiple Choice

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In 1988 the governments of the United States and Canada agreed to enter in a ______________,which went into effect on January 1,1989.

A) economic union
B) common market
C) political union
D) free trade agreement
E) customs union

F) All of the above
G) A) and E)

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Question 43

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MERCOSUR originated in 1988 as a free trade pact between ______________.

Many now see the _____________ as the emerging economic and political superpower of the same order as the United States and Japan.

You run a small company that manufactures plastic injection molded pieces for the construction industry.Currently,you manufacture your product in Windsor,Ontario and a small plant in Texas.You sell your products in both Canada and the United States.You are aware that NAFTA presented your company with increased access to the American market.You want to expand,and are aware of something called the "European Union",but are unsure of what it means,whether Canada can join (or has joined)and what your firm can do to get access to this large market.You are also interested to know whether there are other "groups of countries like NAFTA or the EU" out there. One of the more traditional arguments in favour of regional trade agreements can be summarized in the following sentences."If WTO agreements extend more widely,regional trade agreements go deeper,their proponents argue.As well as cutting border tariffs,countries can agree reforms among themselves,such as harmonizing product standards,streamlining customs procedures and cross-border investment,that go further than anything the family of nations as a whole is ready to handle." Comment on this statement and give some examples.

The largest trading bloc in the world is _____________.

Europe now has two trade blocs: the European Union and the European Free Trade Association.

Mercosur ran into difficulties in 1998 when _______________.

As of 2014,what EU countries have not adopted the Euro?

The European Committee has been directly elected by citizens of the EU countries since the late 1970s.

Trade diversion occurs when higher-cost external suppliers replace lower-cost suppliers within the free trade area.

Several levels of economic integration are possible in theory.From most integrated to the least integrated they are area free trade area,a common market,a customs union,an economic union,and finally,a full political union.

According to the textbook,Countries in _____________ have been,mostly unsuccessfully,experimenting with regional trade blocks for 50 years.

An economic union involves the free flow of products and factors of production between members and the adoption of a common external trade policy.

Which of the following selections accurately depicts the levels of economic integration from least integrated to most integrated?

_____________ occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.

Define trade creation and trade diversion with respect to regional economic integration.Given that integration can both create and divert trade,under what circumstances will regional integration be in the best interest of the world economy?

The Single European Act was born out of frustration among EC member countries that the community was not living up to its promise.

In a _____________,theoretically,there are no discriminatory tariffs,quotas,subsidies,or administrative impediments distorting trade between members.

The Andean Pact was formed in 1969 when Bolivia,Chile,Ecuador,Colombia,and Peru signed the Cartagena Agreement.