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| 1 | |
When considering the political case for integration, two major impediments arise – costs and the concerns over national sovereignty. |
| | A) | True |
| | B) | False |
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| 2 | |
In theory, the WTO should ensure that a free trade area does not result in trade diversion, but that would mean increasing the scope of the WTO. |
| | A) | True |
| | B) | False |
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| 3 | |
The Free Trade Area of the Americas (FTAA) has made significant progress due to the unusual cooperation and leadership between Venezuela and the United States. |
| | A) | True |
| | B) | False |
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| 4 | |
Regional free trade blocs in Africa are developing rapidly by putting aside differences between countries and focusing on models of other free trade areas. |
| | A) | True |
| | B) | False |
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| 5 | |
U.S. firms that do not have subsidiaries in Europe would be well advised to consider opening them to avoid being shut out of the EU by nontariff barriers. |
| | A) | True |
| | B) | False |
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| 6 | |
Which level of economic integration is the least integrated? |
| | A) | A free trade area |
| | B) | A regional market system |
| | C) | A political union |
| | D) | A customs union |
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| 7 | |
A(n) _________________________ involves the free flow of products and factors of production among member-countries and the adoption of a common external trade policy, but it also requires a common currency, harmonization of members’ tax codes, and a common monetary and fiscal policy. |
| | A) | political union |
| | B) | economic union |
| | C) | common market |
| | D) | customs union |
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| 8 | |
The countries of Western Europe had several incentives to cooperate and form the EC including ______________________. |
| | A) | the realization that the United Nations was going to be a major force in world politics |
| | B) | the desire to create a common military stance independent of the United States |
| | C) | the belief that European nation-states were no longer large enough to hold their own in world markets and politics |
| | D) | concerns about the future growth of Japan, China, and India |
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| 9 | |
Trade diversion is an outcome: |
| | A) | when high cost domestic producers are replaced by low cost producers. |
| | B) | when high cost external suppliers are replaced by low-cost suppliers. |
| | C) | when free trade suppliers are replaced by protected producers. |
| | D) | when lower-cost external suppliers are replaced by higher-cost free trade area suppliers. |
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| 10 | |
The supreme appeals court for EU law is the _____________________. |
| | A) | Court of Justice |
| | B) | International Tribunal |
| | C) | WTO Court of Appeals |
| | D) | Commission for Appeals |
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| 11 | |
Which of the following is not one of the benefits of the Euro? |
| | A) | Lower foreign exchange rates and hedging costs will lead to significant savings. |
| | B) | It becomes easier to compare prices across Europe. |
| | C) | The new currency is aesthetically more pleasing. |
| | D) | A pan-European capital market gets a boost. |
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| 12 | |
The financial problems of Greece and other members of the EU have made many of the newer EU nations committed to adopting the euro consider ____________. |
| | A) | threatening to withdraw from the EU |
| | B) | putting their plans on hold |
| | C) | pledging to honor the arrangements made to Greece and others |
| | D) | adopting austerity programs of their own |
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| 13 | |
The contents of NAFTA are all of the following except: |
| | A) | open public procurement to non-national suppliers. |
| | B) | abolition by 2004 of tariffs on 99 percent of the goods traded between Mexico, Canada and the United States. |
| | C) | protection of intellectual property rights. |
| | D) | application of national environmental standards. |
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| 14 | |
________________ signed a free trade agreement with China, which went into effect January 1, 2010. |
| | A) | ASEAN |
| | B) | APEC |
| | C) | The United States |
| | D) | The European Union |
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| 15 | |
The concern about the fortress mentality arises from: |
| | A) | concerns about military involvement in unstable countries or dictatorships. |
| | B) | firms outside the trading area might be shut out. |
| | C) | the tight relationships between states that might further affect national sovereignty. |
| | D) | the fear that another Soviet Union might arise to destabilize existing free trade areas and existing balances of economic power. |
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