Quiz on Trading Blocs

What can each member of a Free Trade Area do regarding imports from outside the trading bloc?

• Impose its own tariffs and quotas.

• Eliminate all tariffs and quotas.

• Follow a universal tariff policy.

• Increase tariffs on all goods.

What does a stable exchange rate in a monetary union help prevent?

• Trade barriers

• Currency speculation

• Increased tariffs

• Economic isolation

What is the main advantage of specialization in trade?

• Decreased efficiency

• Increased output

• Increased costs

• Decreased market size

What is a potential outcome for the market when inefficient firms are driven out due to regional trade agreements?

• Increased competition

• Oligopolistic market

• Perfect competition

• Monopolistic market

What is a disadvantage of regional trade agreements related to competition?

• They increase competition.

• They reduce competition.

• They have no effect on competition.

• They create perfect competition.

What is the effect of regional trade agreements on inefficient producers within a bloc?

• They are driven out of business.

• They are protected from efficient producers outside the bloc.

• They become more efficient.

• They expand globally.

What is the benefit of the single market for businesses?

• Increased tariffs on exports.

• Barriers to selling products.

• Ability to sell products without barriers.

• Limited access to other markets.

What is a benefit of the single market for EU firms?

• Limited access to foreign markets

• Increased tariffs on imports

• Free movement of goods and services

• Restricted capital flow

Since when has the Common Agricultural Policy been in effect?

• 1972

• 1985

• 1962

• 1990

By 2017, what percentage of the budget was allocated to the CAP?

• 50%

• 73%

• 37%

• 30%