Question

Under a common market agreement, you would find

Multiple Choice

• absence of a common external trade policy with regard to nonmembers.

• free movement of factors of production between member nations.

• establishment of barriers to the free flow of goods between member nations.

• a lack of administrative machinery to oversee trade relations with nonmembers.

• mandatory use of a common currency among member nations.

Which of these situations shows how concerns over national sovereignty can act as an impediment to regional economic integration?

Multiple Choice

Multiple Choice

• Organization of the Petroleum Exporting Countries regulating the supply of petroleum as a cartel

• Asia-Pacific Economic Cooperation failing to establish itself as a regional arrangement

• admission of eastern European nations into the European Union

• Great Britain refusing to adopt the common currency of the European Union, the euro

• rise of the World Trade Organization

• The price of a bouquet of tulips in France is 4 euros. Jenna Algren, a frequent international traveler, found that a similar bouquet of tulips cost only 3 euros in Belgium. This demonstrates that the benefit of adopting the euro as a common currency is that it

  Multiple Choice

• Multiple Choice

• makes it easier to compare prices across Europe.

• makes Europe an optimal currency area.

• increases the range of investment options open only to institutions.

• leads to higher prices, which translate into substantial gains for European producers.

• decreases competition because it has become harder for consumers to shop around.

• How did the Treaty of Rome affect trade?

  Multiple Choice

• It obliged all European Union members to adopt the euro.

• It committed the European Economic Community to establish common policies in agriculture and transportation.

• It called for the establishment of internal trade barriers.

• It allowed members to determine the level of protection applied to goods coming from outside.

• It called for the abolition of a common external tariff.

• What is a defining characteristic of a free trade area?

  Multiple Choice

• Factors of production are allowed to move freely between member nations.

• Each member country is allowed to determine its own trade policies with regard to nonmembers.

• Member nations are required to have a common currency.

• Member nations are required to have a common monetary and fiscal policy.

• Member nations are required to have a central political apparatus that coordinates economic, social, and foreign policy.

Answer 1

Answer - The correct answers are as follows:

• establishment of barriers to the free flow of goods between member nations.

• Organization of the Petroleum Exporting Countries regulating the supply of petroleum as a cartel

• leads to higher prices, which translate into substantial gains for European producers.

• It allowed members to determine the level of protection applied to goods coming from outside.

• Each member country is allowed to determine its own trade policies with regard to nonmembers.