83) Which country has been granted three bailout efforts by the EU in an attempt to prevent a
sovereign debt crisis?
A) Greece
B) France
C) Great Britain
D) Belgium
E) Portugal
84) The country of Turkey has lobbied for EU membership for many years but full membership
has been denied because of
A) a lack of democratic reforms.
B) poor infrastructure.
C) investment high debt ratio.
D) concerns over human rights issues.
E) a lack of intellectual property rights.
85) An expected consequence of the implementation of the North American Free Trade
Agreement was
A) low-skilled jobs would be moved out to Mexico resulting in lowering of average wage rates in
the United States and Canada.
B) increased imports from Mexico would help reduce the huge trade deficit for United States and
Canada.
C) lower incomes of the Mexicans would allow them to import fewer U.S. and Canadian goods,
thereby decreasing demand.
D) a large number of Mexican firms would hire low-skilled workers from the United States.
E) some U.S. and Canadian firms would move production to Mexico to take advantage of lower
labor costs.
86) An argument against the North American Free Trade Agreement centered on the fear that
ratification would result in
A) low interest rates in the Unites States and Canada.
B) mass exodus of jobs from the United States into Mexico.
C) a move toward a common currency for NAFTA member nations.
D) competition from the members of the European Union.
E) high inflation in the United States and Canada.
87) The biggest leap of economic faith came from ________ when signing the NAFTA agreement.
A) the United States
B) Canada
C) Mexico
D) Panama
E) Brazil
88) The ________ is a 1969 agreement among Bolivia, Chile, Ecuador, Colombia, and Peru to
establish a customs union.
A) Andean Pact
B) ASEAN
C) Mercosur
D) CARICOM
E) Caribbean Single Market and Economy
89) What resulted from the Andean Pact of 1969?
A) The pact failed to achieve any of its stated objectives due to political and economic problems.
B) The Andean Pact achieved most of its stated objectives, particularly the harmonization of
economic policies.
C) The dominant political ideology in many of the Andean countries moved toward the democratic
end of the political spectrum.
D) The pact effectively nullified the Galápagos Declaration.
E) The Andean Pact removed all common external tariffs.
90) The countries of the Andean Pact have faced
A) fast-paced democratic reforms.
B) low unemployment.
C) political stability.
D) low economic growth.
E) diminished debt burdens.
91) The Andean Community now operates as a(n)
A) common market.
B) economic union.
C) customs union.
D) command economy.
E) political union.
92) ________ is a pact that originated in 1988 to establish a free trade area now including
Argentina, Brazil, Paraguay, and Uruguay.
A) ASEAN
B) NAFTA
C) Mercosur
D) CARICOM
E) CAFTA
93) In Alexander Yeats’s criticism of Mercosur, he says that
A) the slowest growing items in intra-Mercosur trade were cars, buses, agricultural equipment, and
other capital-intensive goods.
B) the trade creation effects of Mercosur outweighed its trade diversion effects.
C) Mercosur countries were prepared to compete globally once the group’s external trade barriers
came down.
D) Mercosur countries were insulated from outside competition by tariffs that run as high as 70
percent of value.
E) capital was being drawn toward more efficient enterprises.
94) Mercosur was temporarily suspended in 2001 because of a(n)
A) dotcom bust in Paraguay.
B) economic crisis in Argentina.
C) exit of Uruguay from the group.
D) devaluation of the Mexican peso.
E) Venezuelan financial crisis.
95) ________ is a trade pact among Costa Rica, El Salvador, Guatemala, Honduras, and
Nicaragua, which began in the early 1960s but collapsed in 1969 due to war.
A) Central American Common Market
B) Free Trade Area of the Americas
C) Caribbean Single Market and Economy
D) Mercosur
E) CARICOM
96) What caused the Central American Common Market to collapse in 1969?
A) the devaluation of the Brazilian currency by 40 percent
B) a coup in Nicaragua that led to the overthrow of the incumbent regime
C) war between Honduras and El Salvador after a riot at a soccer match between teams from the
two countries
D) the withdrawal from the trade arrangement by Costa Rica
E) the collapse of monetary policy between Costa Rica and El Salvador
97) The Central American Free Trade Agreement is an agreement to lower trade barriers between
six nations and
A) the United States.
B) the EU.
C) France.
D) the Philippines.
E) Germany.
98) The purpose of the Central America Free Trade Agreement is to
A) lower trade barriers between the United States and the Central American Common Market
countries.
B) eliminate trade barriers between the CARICOM and Central American Common Market
countries.
C) reduce of trade barriers between Caribbean Single Market and Economy nations and Central
American Common Market countries.
D) introduce a common currency for Costa Rica, El Salvador, Guatemala, Honduras, and
Nicaragua.
E) reduce tariffs and quotas between Costa Rica, Dominican Republic, and Nicaragua.
99) ________ is an association of English-speaking Caribbean states that are attempting to
establish a customs union.
A) CARICOM
B) Central American Free Trade Agreement
C) Central American Common Market
D) Free Trade Area of the Americas
E) Caribbean Single Market and Economy
100) The goal of the Caribbean Single Market and Economy is to
A) remove all trade barriers between member nations in practice.
B) establish a political union.
C) adopt a common currency.
D) harmonize macroeconomic and monetary policy between member states.
E) establish an economic union.
101) The Caribbean Single Market and Economy is modeled after
A) the EU’s single market.
B) a planned economy.
C) a command economy.
D) the U.S. free trade area.
E) CAFTA.
102) The ________ is an attempt to establish a free trade area between Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
A) Asia-Pacific Economic Cooperation
B) South Asian Association for Regional Cooperation
C) Asian Clearing Union
D) Association of Southeast Asian Nations
E) Maastricht Treaty
103) ASEAN has two objectives: foster free trade among member countries and achieve
cooperation in ________ policies.
A) political
B) religious
C) industrial
D) financial
E) agricultural
104) Regional trade blocs in Africa have been slow to establish mostly because of
A) significant political turmoil.
B) inefficiencies in the economy.
C) a lack of willing participants.
D) an unwillingness to lower all nontariff barriers.
E) a lack of intellectual property rights.
105) Briefly describe the concept of regional economic integration.
106) How is a common market different from an economic union?
107) Describe two impediments to regional economic integration.
108) Define trade creation and trade diversion with respect to regional economic integration.
109) Describe the role of the Treaty of Rome in the formation of the EU.
110) Discuss the four main institutions within the European Union.
111) What were the objectives of the Single European Act?
112) Briefly describe the benefits of the euro.
113) Describe the drawbacks of the euro.
114) Describe the exit by the British government from the EU.
115) Describe the Central American Common Market and the Central America Free Trade
Agreement.
116) Explain why differences in culture can limit the ability of companies to centralize production
in key locations. Provide an example.