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Worksheets4.4 Economic Integration
Total questions: 63
Worksheet time: 32mins
What is a monetary union?
situation that involves a common currency, such as the Euro as well as universal monetary policy.
an agreement between two nations or trading groups that gives each party favoured trade status.
an agreement between a number nations or trading groups that give each party favoured trade trade status.
an agreement between two or more countries to lower trade barriers between each other on particular products
What is a bilateral agreement?
situation that involves a common currency, such as the Euro as well as universal monetary policy.
an agreement between two nations or trading groups that gives each party favoured trade status.
an agreement between a number nations or trading groups that give each party favoured trade trade status.
an agreement between two or more countries to lower trade barriers between each other on particular products
What is a multilateral agreement?
situation that involves a common currency, such as the Euro as well as universal monetary policy.
an agreement between two nations or trading groups that gives each party favoured trade status.
an agreement between a number nations or trading groups that give each party favoured trade trade status.
an agreement between two or more countries to lower trade barriers between each other on particular products
What is a preferential trade agreement?
situation that involves a common currency, such as the Euro as well as universal monetary policy.
an agreement between two nations or trading groups that gives each party favoured trade status.
an agreement between a number nations or trading groups that give each party favoured trade trade status.
an agreement between two or more countries to lower trade barriers between each other on particular products
What is NOT an ADVANTAGE of a monetary union?
Single currency eliminates exchange risk uncertainty
Monetary policy can no longer be used as a tool of economic policy
Single currency encourages price transparency
Single currency eliminates transaction costs
Single currency promotes higher level of inward investment
What is NOT an DISADVANTAGE of a monetary union?
Exchange rate can no longer be used as adjustment tool
Monetary policy can no longer be used as a tool of economic policy
Monetary policy impacts on each country differently
Fiscal policy is constrained by different countries aims
Single currency promotes higher level of inward investment
Due to the formation of monetary union, economic policy makers loss the ability to....?
Use monetary policy as tool as price stability is key objective
Pursue their own fiscal policy
Devalue or revalue exchange rate
Set their own taxation rate
What is the difference between a customs union and common market?
Common market eliminates trade barriers but they still exist in customs union
A common market eliminates all restrictions on movement of any factors of production, but these restrictions remain in customs union
Customs union adopts common trade policy towards all non-member countries whereas a common market does not
A customs union has 2 members whilst common market has more than 2
How does the formation of a trading bloc result in increased competition?
High trade barriers, means that domestic producers become more competitive with the world as they are supported by domestic government
With no barriers, imports increase, forcing domestic producers to compete with low cost countries
What are disadvantages of FTA?
Product may be imported into FTA by country with lowest external barriers and sold to countries with FTA that have higher barriers
Countries can not pursue their own monetary policy
Each country has its own individual barriers towards non-members
Countries no longer set their own trade policies as it is agreed upon by member countries
Which of the following is seen as a benefit of the euro?
Lowering foreign exchange and hedging costs
Zero interest expense for businesses
Reduced competition in most industries
Goverment gaining better control over their monetary policies
What was the main objection raised by those in the United States and Canada who
opposed the ratification of the NAFTA?
Balance of payment problems
Job losses
Threat of competition from Asian companies
Threat of a loss of national sovereignty
NAFTA is an example of a/an:
Free Trade Area
Custom Union
Common Market
Economic Union
The coming together of national economies to operate as one economy
Economic Integration
Globalization
Teamwork
CARICOM
Groups of nations that come together to trade under a trading agreement
Economic Integration
Globalization
Trading bloc
CARICOM
An agreement between two groups or countries
Bi-lateral agreement
Multi-lateral agreement
What type of economic measure is being shown here?
Economic Integration
Globalization
Protectionism
Trade Liberalization
Groups of nations that come together to trade under a trading agreement
Economic Integration
Globalization
Trading bloc
CARICOM
The global integration of international trade, investment, information technology (IT), and cultures.
Economic Integration
Globalization
Trading bloc
CARICOM
Multiple Answers Possible: Select all the options below that are characteristics of the Custom Union stage of economic integration:
No internal trade barriers
Common External Tariff/CET
Free movement of labour and capital
Common currency and economic policies
Political, social and cultural integration
Multiple Answers Possible: Select all the options below that are characteristics of the Common Market stage of economic integration:
No internal trade barriers
Common External Tariff/CET
Free movement of labour and capital
Common currency and economic policies
Political, social and cultural integration
Multiple Answers Possible: Select all the options below that are characteristics of the Free Trade Area stage of economic integration:
No internal trade barriers
Common External Tariff/CET
Free movement of labour and capital
Common currency and economic policies
Political, social and cultural integration
Multiple Answers Possible: Select all the options below that are characteristics of the Economic Union stage of economic integration:
No internal trade barriers
Common External Tariff/CET
Free movement of labour and capital
Common currency and economic policies
Political, social and cultural integration
2. The General Agreement on Tariffs and Trade (GATT) expanded considerably into a multilateral trading system called _____.
EU
NAFTA
UN
WTO
4. A free trade area _____.
imposes common external policies on nonparticipants in order to combat trade diversion
permits the free movement of goods and people among member nations
comprises a group of countries that remove trade barriers among themselves
coordinates and harmonizes economic policies in order to blend their economies into a single economic entity
6. Which of the following characterizes a customs union?
It requires each member to maintain different external policies regarding non-members.
It imposes common external policies on
non-members.
It integrates the political and economic affairs of a region.
It permits the free movement of goods and people among its members.
8. The Euro is currently used in _____.
all EU member countries
all European countries
19 EU countries
Schengen countries only
9. Which of the following regions describes the euro zone?
A region that comprises EU members without a common currency
A region that comprises all EU members
A region that has passport-free traveling
A region that has a common currency
It is correct to say that countries within a customs union have...
Common external barriers
Common currency and a common central bank
Common policies on product regulation.
None of the above
What kind of economic integration arrangement has common policies on product regulation, and free movement of goods, services, capital and labour?
Common markets
Preferential trading area
Free trade areas
Custom unions
The World Trade Organization (WTO) oversees international agreements that attempt to:
lower tariffs
liberalize world trade
increase world trade
all of the above
A group of countries that allow free movement of labour and capital within the group have a:
customs union
free trade area
common market
preferential trade agreement
A trading bloc may be a:
free trade area, customs union or common market
customs union or common market
common market or monetary union
customs union or monetary union
Trade creation and trade diversion may result from the creation of a trading bloc. Trade creation refers to the idea that _____________________ while trade diversion means that _____________________.
lower cost producers are replaced by higher cost producers / higher cost producers are replaced by lower cost producers
higher cost producers are replaced by lower cost producers / lower cost producers are replaced by higher cost producers
trade expands through more exports and imports / trade contracts through fewer exports and imports
imports from efficient producers are replaced by imports from inefficient producers / imports from inefficient producers are replaced by imports from efficient producers
Each of the following statements describes monetary union except:
a group of countries that adopt a common currency
a group of countries that have a common central bank
a group of countries that have a common fiscal policy
a group of countries that have a common monetary policy
The World Trade Organization (WTO) does not:
monitor national trade policies
help member countries with technology and training in relation to trade
administer trade agreements
monitor the quality of goods traded across borders
Tariffs are taxes imposed on ______
imported products
exported products
hazardous goods
surplus goods
Selling products in a foreign market at below their cost of production.
Embargo
Voluntary export restraint
Dumping
Quota
the precursor of the WTO, which organised a series of ‘rounds’ of tariff reductions.
World Trade Organization
General Agreement on Tariffs and Trade (GATT)
Voluntary export restraint
Trading possibility curve
A process by which the world’s economies are
becoming more closely integrated.
Trade liberalization
Globalization
Protectionism
Tariff
A strategy to protect domestic producers from foreign competition.
Protectionism
Trade bloc
Trade Liberalization
Trade diversion
A regional group of countries that have entered into trade agreements.
Trade union
Trade bloc
Custom union
Trade diversion
The replacement of cheaper imported goods by goods from a less efficient trading partner within a bloc.
Trade creation
Free trade area
Trade diversion
Custom union
The replacement of more expensive domestic production or imports with cheaper output from a partner within the trading bloc
Trade creation
Free trade area
Custom union
Trade diversion
Which of the following is an advantage of economic integration
The loss of inefficient domestic firms
More efficient allocation of resources
Increased tariff revenue
Potential losses from trade diversion
A common market is less integrated than a free trade area
True
False
Which of the following is an advantage of a monetary union?
Price transparency
Lack of risk and uncertainty
No transaction costs
All of the above
How many countries are members of the World Trade Organization (WTO)?
180
86
160
106
It is correct to say that countries within a customs union have...
Common external barriers
Common currency and a common central bank
Common policies on product regulation.
None of the above
The euro replaced the national currencies of 12 EU member nations in the year ______.
1997
2002
2000
1995
The Eurozone crisis was essentially _____ crisis.
Immigration
Food
Sovereign debt
Political
ASEAN was formed in _______.
1967
1945
1999
2000
The European Union is a unique economic and political union between ____ countries that together cover much of the European continent.
22
25
27
30
On 31 January 2020 the ______ left the European Union.
Italy
United Kingdom
Spain
Greece
In _____ the Single European Act was signed. that sorted out the problems with the free flow of trade across EU borders and thus created the ‘Single Market’.
1970
1980
1986
1989
The ______ is the largest trade block in the world.
NAFTA
European Union
ASEAN
SAFTA
On _____ , the United Kingdom left the European Union after 47 years of EU membership, marking a new chapter in the Union’s history.
31 January 2018
31 March 2020
31 January 2020
01 January 2020
______ is a portmanteau of the words "British" and "exit" coined to refer to the U.K.'s decision in a June 23, 2016 referendum to leave the EU.
Brit
Brexit
Brite
Britit
The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in ______, with the signing of the ASEAN Declaration (Bangkok Declaration)
Malaysia
Thailand
Philippines
Singapore
ASEAN today has ___ member states.
6
7
9
10
Founding Fathers of ASEAN, are ____________.
Indonesia, Malaysia, Philippines, Singapore and Vietnam
Myanmar, Malaysia, Philippines, Singapore and Thailand
Indonesia, Malaysia, Philippines, Singapore and Thailand
Indonesia, Malaysia, Philippines, Singapore and Cambodia
The ASEAN Charter entered into force on 15 December _______.
2000
2002
2008
2010
Combined, ASEAN's GDP is now the _____ largest in the world.
second
fourth
fifth
seventh
