47) The ________ is responsible for proposing EU legislation, implementing it, and monitoring
compliance with EU laws by member states.
A) European Parliament
B) European Commission
C) Council of the European Union
D) Court of Justice
48) Why is the European Council said to be the ultimate controlling authority within the EU?
A) It is responsible for implementing EU legislation and monitoring compliance with EU laws by
member states.
B) Its role in setting competition policy is becoming increasingly important to business.
C) It has the right to vote on the appointment of commissioners.
D) Draft legislation from the commission can become EU law only if the council agrees.
49) Which of the following is directly elected by the populations of the member states and is
primarily a consultative rather than legislative body?
A) the European Parliament
B) the European Commission
C) the Council of the European Union
D) the Court of Justice
50) Which of the following was the outcome of the Treaty of Lisbon signed in 2007?
A) It established the European Community.
B) It resulted in the adoption of the euro.
C) It changed the name of the European Community to the European Union.
D) It increased the power of the European Parliament.
51) Which of the following observations pertaining to the EU’s Court of Justice is correct?
A) It is composed of two judges from each country.
B) It is the supreme appeals court for EU law.
C) Its judges are required to act as representatives of national interests.
D) A member country can bring other members to the court for failing to meet EU treaty
obligations only with the support of two other uninvolved EU countries.
52) Which of the following observations is true of the euro?
A) It is used by all member states of the European Union.
B) While recommended, it is not required that participating countries give up their own currencies.
C) It required participating countries to give up control over monetary policy.
D) By adopting it, the EU created the most widely traded currency in the world.
53) Which treaty, signed in February 1992, committed EC members to adopting a common
currency by January 1, 1999?
A) the Maastricht Treaty
B) the Treaty of Rome
C) the Single European Act
D) the Treaty of Lisbon
54) Which of the following is seen as a benefit of the euro?
A) governments gaining greater control over their monetary policies
B) reduced competition in most industries
C) zero interest expense for businesses
D) lower foreign exchange and hedging costs
55) Which of the following is seen as a disadvantage of the euro?
A) higher foreign exchange and hedging costs
B) national authorities losing control over monetary policy
C) difficulty comparing prices across Europe
D) undermining the development of a pan-European capital market
56) In ____, similarities in the underlying structure of economic activity make it feasible to adopt a
single currency and use a single exchange rate as an instrument of macroeconomic policy.
A) an optimal currency area
B) a unified economic area
C) a uniform currency zone
D) a monetary zone
57) Which of the following was required for new applicants to qualify for EU membership?
A) minimum economy size of €1 trillion
B) nationalization of private assets
C) deregulation of markets
D) sustained GDP growth of 10 percent for five years
58) Which of the following is seen to be a consequence of the expansion of the EU from 15 nations
to 28 nations?
A) delays in decision-making processes
B) elimination of the sovereign debt crisis
C) euro becoming the most traded currency in the world
D) huge initial impact on the overall economic welfare
59) Which of the following is a reason Turkey is not yet a member of the EU?
A) Only about 10 percent of Turkey’s international trade is with the EU.
B) There are concerns over human rights issues in the country.
C) The country has yet to form a customs union with the EU.
D) Turkey has a weak economy.
60) How does the NAFTA seem to increase the international competitiveness of U.S. and
Canadian firms?
A) It gives them access to scarce natural resources hitherto unavailable.
B) It increases tariff barriers making the North American market less attractive to Asian
companies.
C) It allows them to take advantage of lower labor costs in Mexico.
D) It gives them production bases in South American markets such as Brazil and Argentina.
61) What was the main objection raised by those in the United States and Canada who opposed the
ratification of the NAFTA?
A) job losses
B) balance-of–payment problems
C) threat of competition from Asian companies
D) threat of a loss of national sovereignty
62) In 1990, Bolivia, Peru, Ecuador, Colombia, and Venezuela relaunched
A) Mercosur.
B) NAFTA.
C) APEC.
D) the Andean Pact.
63) Mercosur originated as ________ between Brazil and Argentina in 1988.
A) a common market
B) a free trade pact
C) a customs union
D) an economic union
64) According to Alexander Yeats
A) the trade diversion effects of Mercosur outweigh its trade creation effects.
B) the fastest growing items in intra-Mercosur trade were capital-intensive goods produced
efficiently in the member countries.
C) Mercosur countries will be able to compete globally once the group’s external trade barriers
come down.
D) the customs union is becoming more perfect over time.
65) In early 2006, six CARICOM members and the United States established the ________, which
was modeled on the EU’s single market.
A) Central American Common Market
B) Central America Free Trade Agreement
C) Caribbean Single Market and Economy
D) North American Free Trade Area
66) Which of the following is true of ASEAN?
A) China, India, South Korea, and Singapore are among its members.
B) Collectively, the member states account for about 55 percent of world trade.
C) It is slowly progressing toward establishing a free trade zone.
D) It has been successful in fulfilling its basic objective of fostering freer trade between member
countries.