IB - CHAPTER 9

Firms outside of trading areas run the risk of being shut out of the single market by the creation of a

• "trade fortress."

• contracting economy.

• single-market zone.

• destabilized economy.

Which of the following is a reason Turkey is not yet a member of the EU?

• Only about 10 percent of Turkey's international trade is with the EU.

• There are concerns over human rights issues in the country.

• The country has yet to form a customs union with the EU.

• Turkey has a weak economy.

Which feature of an economic union differentiates it from a common market?

• Free flow of products and factors of production between member countries

• A common monetary and fiscal policy

• A common external trade policy toward nonmembers

• Ability of factors of production to move freely between members

From least integrated to most integrated, the levels of economic integration are a:

• common market, a free trade area, an economic union, a customs union, and a political union.

• free trade area, a customs union, a common market, an economic union, and a political union.

• customs union, a free trade area, a common market, a political union, and an economic union.

• common market, an economic union, a customs union, a free trade area, and a political union.

Which of the following is a reason the European Union is considered an imperfect economic union?

• Factors of production are not allowed to move freely between member countries.

• Not all members of the union have adopted the euro.

• Almost all markets are heavily regulated.

• Products and services are not allowed to move freely between member countries.

Which is the most enduring free trade area in the world?

• Central America Free Trade Association (CAFTA)

• European Free Trade Association (EFTA)

• Association of Southeast Asian Nations (ASEAN)

• North American Free Trade Association (NAFTA)

Establishment of the euro created the largest currency zone in the world, replacing the position the U.S. dollar had held for decades.

• True

• False

Charlyce lives in a country where there are no barriers to the trade of goods and services. This is called a free trade area.

• True

• False

Because of the fact that everyone benefits from economic integration, it is easy to achieve and sustain.

• True

• False

A central reason for the establishment of the EU was the devastation of Western Europe during two world wars and the desire for a lasting peace.

• True

• False