IB Chapter 9 – Flashcards
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A _____ has no barriers to trade among member-countries, includes a common external trade policy, and allows factors of production to move freely among members, but does not have a common currency.
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Common market
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The ultimate controlling authority within European Union is the European Commission.
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false
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Regional economic integration and the consequent increase in increased dependence on each other creates incentives for political cooperation between the neighboring states and reduces the potential for violent conflict.
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true
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Which feature of an economic union differentiates if from a common market?
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Harmonization of tax rates of member-countries
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Collectively, the member-states of the _____ account for about 55 percent of the world's GNP, 49 percent of world trade, and much of the growth in the world economy.
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The Asia-Pacific Economic Cooperation
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Which of the following is an argument against economic integration?
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It reduces degree of control over certain issues such as monetary and fiscal policy.
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In addition to NAFTA, the only other significant trade bloc in the Americas is Free Trade Area of the Americas (FTAA).
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true
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Two countries, Cadmia and Palladia, have formed a free trade agreement. This has resulted in Cadmia importing sugar from Palladia which it previously did from another country at a lower cost. This agreement has led to:
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trade diversion.
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The lowering of barriers to trade and investment among countries has led to decreased price competition throughout the EU and NAFTA.
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false
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Which of the following trade pact collapsed due to a war?
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Central American Common Market
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Free trade agreements are the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements.
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true
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Which of the following is true with regard to NAFTA?
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Many observers credit NAFTA with helping to create the background for increased political stability in Mexico.
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Which treaty committed EC members to adopting a common currency by January 1, 1999?
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The Maastricht Treaty
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Which feature of a customs union differentiates it from a free trade area?
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Adoption of a common external trade policy
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Identify the correct sequence of economic integration starting from the least integrated to the most integrated.
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Free trade area, Customs Union, Common Market, Economic Union, and Political Union.
