Trading Blocs Quiz

What are trading blocs?

• Groups of countries that restrict trade activities

• Groups of countries that have no impact on trade activities

• Groups of countries that manage and promote trade activities

• Groups of countries that only trade with non-members

Which organization permits the existence of trading blocs?

• World Health Organization (WHO)

• World Trade Organization (WTO)

• United Nations (UN)

• International Monetary Fund (IMF)

What is the most significant trading bloc that includes a single currency?

• European Union (EU)

• Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA)

• North American Free Trade Agreement (NAFTA)

• European Free Trade Area (EFTA)

What is trade creation?

• Movement from a higher cost source of output to a lower cost source of supply

• Switch from a higher-cost supplier to a lower-cost foreign source

• Switch from a lower-cost foreign source to a higher-cost supplier

• Movement from a lower cost source of output to a higher cost source of supply

What is trade diversion?

• Switch from a higher-cost supplier to a lower-cost foreign source

• Switch from a lower-cost foreign source to a higher-cost supplier

• Movement from a higher cost source of output to a lower cost source of supply

• Movement from a lower cost source of output to a higher cost source of supply

Which trading bloc is a regional trade agreement between Chile, Colombia, Mexico, and Peru?

• European Union (EU)

• European Free Trade Area (EFTA)

• Pacific Alliance

• North American Free Trade Agreement (NAFTA)

What is the purpose of a common external tariff in a customs union?

• To decrease the cost of importing from 3rd party nations

• To increase the cost of importing from 3rd party nations

• To only affect consumers directly

• To have no impact on importing from 3rd party nations

Which trading bloc was created in 2006 and includes countries such as India and Pakistan?

• Mercosur

• Common Market of Eastern and Southern Africa (COMESA)

• South Asian Free Trade Area (SAFTA)

• Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA)

What is the main impact of trading blocs on trade activities?

• Have no impact on trade activities

• Lead to trade liberalization and trade creation between members

• Decrease trade liberalization

• Increase protectionist measures

Which trading bloc is a customs union, a single market, and now with a single currency?

• European Union (EU)

• European Free Trade Area (EFTA)

• Mercosur

• North American Free Trade Agreement (NAFTA)