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152. Which of the following organizations is considered a regional trading arrangement?
a.
Organization of Petroleum Exporting Countries
b.
North Atlantic Treaty Organization
c.
Benelux
d.
International Tin Agreement
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
153. When products from high-cost suppliers within a customs union replace imports from a low-cost nation that is not a
member of the customs union, there exist(s):
a.
Dynamic welfare losses
b.
Dynamic welfare gains
c.
Trade creation
d.
Trade diversion
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
154. Which form of economic integration occurs when participating countries abolish tariffs on trade among themselves,
establish a common tariff on imports from nonmembers, and permit free movement of capital and labor within the
organization?
a.
Free trade area
b.
Economic union
c.
Common market
d.
Monetary union
ANSWER:
c
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POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
155. A static welfare effect resulting from the formation of the European Union would be:
a.
Economies of scale
b.
Trade diversion
c.
Investment incentives
d.
Increased competition
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
156. A dynamic welfare gain resulting from the formation of the European Union would be:
a.
Trade diversion
b.
Trade creation
c.
Diseconomies of scale
d.
Economies of scale
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
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DATE MODIFIED:
6/22/2016 3:21 PM
157. Which organization was founded in 1957 whose objective was to create an economic union among its members?
a.
General Agreements on Tariffs and Trade
b.
Organization of Economic Cooperation and Development
c.
European Union
d.
Latin American Free Trade Association
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
158. The common agriculture policy of the European Union has supported European farmers via:
a.
Export tariffs and domestic content regulations
b.
Variable levies and voluntary export agreements
c.
Content regulations and export subsidies
d.
Export subsidies and variable levies
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
159. Which nation is not a member of the North American Free Trade Association?
a.
Canada
b.
Greenland
c.
Mexico
d.
United States
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
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QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
160. NAFTA is a:
a.
Monetary union
b.
Free trade area
c.
Common market
d.
Customs union
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
161. Under the European Union’s common agricultural policy, a variable import levy equals the:
a.
Amount by which the EU’s support price exceeds the world price
b.
Amount by which the world price exceeds the EU’s support price
c.
Support price of the EU
d.
World price
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
162. Members of the European Union find that “trade creation” is fostered when their economies are:
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a.
Highly competitive
b.
Highly noncompetitive
c.
Small in economic importance
d.
Geographically distant
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
163. The European Union has achieved all of the following except:
a.
Adopted a common fiscal policy for member nations
b.
Established a common system of agricultural price supports
c.
Disbanded all tariffs among its member countries
d.
Levied common tariffs on products imported from nonmembers
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
164. When the United States, Canada, and Mexico form a free trade area, and Mexico begins importing a product from
Canada rather than from the lowest cost world producer.
a.
Trade diversion occurs
b.
Trade creation occurs
c.
World welfare rises
d.
World welfare falls to zero
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
165. When the formation of a free trade area results in the reduction of trade with nonmember nations in favor of member
countries, ____ occurs.
a.
Trade devaluation
b.
Trade revaluation
c.
Trade creation
d.
Trade diversion
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
166. Which country is not a member of the European Union?
a.
Spain
b.
Germany
c.
France
d.
Iceland
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
167. The implementation of the European Union has:
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a.
Made it harder for Americans to compete against the Germans in the British market
b.
Made it easier for Americans to compete against the Germans in the British market
c.
Made it harder for Americans to compete against the Japanese in the British market
d.
Made it easier for Americans to compete against the Japanese in the British market
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
168. The common agricultural policy of the European Union has:
a.
Increased American farm exports to the EU
b.
Decreased American farm exports to the EU
c.
Lowered the price of American farm exports to the EU
d.
Not affected the price of American farm exports to the EU
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
169. The implementation of a common market involves all of the following except:
a.
Elimination of trade restrictions among member countries
b.
A common tax system and monetary union
c.
Prohibition of restrictions on factor movements
d.
A common tariff levied in imports from nonmembers
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
170. Under the common agricultural policy, exports of any surplus quantities of EU produce are encouraged through the
usage of:
a.
Variable levies
b.
Export subsidies
c.
Import quotas
d.
Countertrade
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
Figure 8.1 depicts the supply and demand schedules of calculators for Greece, a “small” country that is unable to affect
the world price. Greece’s supply and demand schedules of calculators are respectively depicted by SG and DG. Assume
that Greece imports calculators from either Germany or France. Suppose Germany is the world’s low-cost producer who
can supply calculators to Greece at $20 per unit, while France can supply calculators at $30 per unit.
Figure 8.1. Effects of a Customs Union
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171. Consider Figure 8.1. With free trade, Greece imports:
a.
3 calculators from France
b.
5 calculators from France
c.
3 calculators from Germany
d.
5 calculators from Germany
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
172. Consider to Figure 8.1. Assume Greece levies a per-unit tariff of $20 on imports from both Germany and France.
Greece will import:
a.
1 calculator from Germany
b.
1 calculator from France
c.
3 calculators from Germany
d.
3 calculators from France
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
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HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
173. Consider Figure 8.1. Assume Greece levies a per-unit tariff of $20 on imports from both Germany and France.
As a result of the $20 tariff, Greece’s consumer surplus falls by:
a.
$90
b.
$100
c.
$110
d.
$120
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
174. Consider Figure 8.1. Assume Greece levies a per-unit tariff of $20 on imports from both Germany and France.
The deadweight welfare loss to Greece, resulting from the $20 tariff, equals:
a.
$20
b.
$40
c.
$60
d.
$80
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
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TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
175. Referring to Figure 8.1, suppose Greece forms a customs union with France. Greece will import:
a.
3 calculators at a per-unit price of $30
b.
3 calculators at a per-unit price of $40
c.
6 calculators at a per-unit price of $30
d.
6 calculators at a per-unit price of $40
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
176. Consider Figure 8.1. The value of the trade diversion effect, resulting from the Greece/France customs union, equals:
a.
$5
b.
$10
c.
$15
d.
$20
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
177. Consider Figure 8.1. The value of the trade creation effect, resulting from the Greece/France customs union, equals:
a.
$5
b.
$10
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c.
$15
d.
$20
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
178. Consider Figure 8.1. Comparing the trade creation and trade diversion effects, the impact of the Greece/France
customs union on the welfare of Greece is:
a.
A $5 increase in economic welfare
b.
A $10 increase in economic welfare
c.
A $5 decrease in economic welfare
d.
No change in economic welfare
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
179. Consider Figure 8.1. Suppose Greece had formed a customs union with Germany, rather than France. The value of
the trade diversion effect would be:
a.
Zero
b.
$5
c.
$10
d.
$15
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
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HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
180. According to Figure 8.1, the formation of a Greece/Germany customs union would result in:
a.
$20 of trade diversion
b.
$40 of trade diversion
c.
$20 of trade creation
d.
$40 of trade creation
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
181. In 1989 Canada and the United States agreed to implement a (an) ____ over a ten year period.
a.
Customs union
b.
Common market
c.
Free trade area
d.
Economic union
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
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182. In the United States, the proposed North American Free Trade Agreement was generally supported by:
a.
Labor unions
b.
Electronics firms
c.
Environmentalists
d.
Citrus producers
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
183. At the Maastricht Summit of 1991, European Union negotiators called for the pursuit of a:
a.
Free trade area
b.
Customs union
c.
Common market
d.
Monetary union
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
184. By removing discriminatory government procurement laws within the European Union, member nations hoped to
benefit from all of the following except:
a.
EU governments could purchase from the cheapest foreign suppliers
b.
Increased competition occurs as domestic firms compete with foreign firms previously shut out of the
domestic market
c.
Industries are restructured which permits surviving firms to achieve economies of scale
d.
Agricultural prices fall as more farmers are allowed to produce their commodities
ANSWER:
d
POINTS:
1
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DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
185. Suppose that government procurement liberalization results in the U.K. government importing automobiles from
Germany, the low-cost EU manufacturer. Cost savings could result from all of the following except:
a.
Competition effect
b.
Scale-economy effect
c.
Protective effect
d.
Trade effect
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
186. Suppose that steel from Japan faces a 20 percent tariff in France and a 25 percent tariff in Italy, while France and
Italy maintain free trade between each other. France and Italy are therefore part of a (an):
a.
Free trade area
b.
Customs union
c.
Common market
d.
Economic union
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
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Page 76
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
187. Suppose that Mexico and Canada form a free-trade area and Canada begins importing steel from Mexico rather than
from Germany. There occurs:
a.
Trade diversion
b.
Trade creation
c.
Trade destruction
d.
Trade exhaustion
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
188. Suppose that Mexico and Canada form a free-trade area. Mexicans then decrease auto manufacturing and increase
imports of autos from Canada, while the Canadians decrease computer production and import more computers from
Mexico. This is an example of:
a.
Trade diversion
b.
Trade creation
c.
Trade destruction
d.
Trade exhaustion
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
189. If the United States and Canada abolish all tariffs on each other’s goods and implement a common tariff on goods
imported from other countries, there occurs a (an):
a.
Free-trade area
b.
Customs union
c.
Common market
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Page 77
d.
Economic union
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
190. Suppose that the United Kingdom and Italy abolish all tariffs on each other’s goods and all restrictions on movements
of factors of production between them. They also implement a common protectionist policy toward other countries. This
is an example of a (an):
a.
Free-trade area
b.
Customs union
c.
Common market
d.
Economic union
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
191. The North American Free Trade Agreement was expected to benefit ____ the most.
a.
Canada
b.
Mexico
c.
Greenland
d.
United States
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
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Page 78
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
192. The North American Free-Trade Agreement was most strongly opposed by U.S.:
a.
Electronics manufacturers
b.
Labor unions
c.
Commercial banks
d.
Engineering companies
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
193. In the United States, which group was most likely to be hurt by the North American Free Trade Agreement?
a.
Unskilled labor
b.
Skilled labor
c.
Owners of capital equipment
d.
Owners of financial capital
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
194. By joining NAFTA, the United States, Canada, and Mexico would find their short-run welfare decreasing due to the:
a.
Economies of scale effect
b.
Business investment effect
c.
Trade creation effect
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Page 79
d.
Trade diversion effect
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
195. When Mexico became a part of NAFTA, along with Canada and the United States, it:
a.
Eliminated tariffs against Canada and the United States but maintained them against nonmembers
b.
Eliminated tariffs against Canada, the United States, and all nonmember countries
c.
Increased tariffs against Canada the United States, and all nonmember countries
d.
Increased tariffs against Canada and the United States, but did not change them against nonmember countries
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
196. Among the benefits that a regional trading arrangement can provide are all of these EXCEPT:
a.
economies of large scale production
b.
specialization fostering
c.
attracting foreign investment
d.
a shorter production time
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Impetus for Regionalism
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Page 80
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
197. Regarding the benefits of regional trade agreements, which of the following is NOT a benefit?
a.
regional trade agreements may help manage immigration flows
b.
regional trade agreements promote regional security
c.
regional trade agreements may help lock in policy shifts towards market oriented reform
d.
regional trade agreements may promote democracy
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Impetus for Regionalism
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
198. Smaller nations may seek safe haven trading arrangements with larger nations when future access to that market
seems uncertain. This was reason for the formation of:
a.
WTO
b.
GATT
c.
NAFTA
d.
none of these
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Impetus for Regionalism
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
199. As new regional trading arrangements are formed, the opportunity cost of remaining outside:
a.
increases
b.
decreases
c.
remains stable
d.
none of these