78) The main challenge facing the Caribbean Community and Common Market (CARICOM) is
that ________.
A) the bloc has not yet signed an agreement calling for a single market
B) military conflicts continue to hamper efforts to move toward political union
C) most members trade more with nonmembers than they do with each other
D) the bloc has had no success in persuading Chile to become a member
79) The common market between Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua
is referred to as the ________.
A) Latin American Integration Association
B) Central American Common Market
C) Andean Community
D) Southern Common Market
80) Which of the following countries of the Central American Common Market has adopted the
U.S. dollar as its official currency?
A) El Salvador
B) Honduras
C) Nicaragua
D) Costa Rica
81) The Free Trade Area of the Americas (FTAA) is a trade agreement ________.
A) between Mexico, Canada, and the U.S.
B) among the South American nations
C) that has been proposed to create the largest free trade area on the planet
D) that includes the United States and the European Union
82) The only Western Hemisphere nation that has been excluded from participating in the Free
Trade Area of the Americas (FTAA) is ________.
A) Argentina
B) Mexico
C) Brazil
D) Cuba
83) The major objective of the Association of Southeast Asian Nations (ASEAN) is to
________.
A) approach the European Union to resolve disputes between member countries
B) safeguard the region’s economic and political stability
C) introduce barriers to trade and investment
D) increase members’ tariff rates from an average of 7.5 percent to 15 percent
84) The stated aim of the organization for Asia Pacific Economic Cooperation (APEC) is to
________.
A) build another trading bloc
B) introduce stringent trade and investment procedures among member countries
C) strengthen the multilateral trading system
D) increase members’ tariff rates from an average of 7.5 percent to 15 percent
85) The primary purpose of the Gulf Cooperation Council at its formation was to ________.
A) cooperate with the increasingly powerful trading blocs in Europe at the time
B) create the largest free trade area on the planet
C) increase members’ tariff rates from an average of 7.5 percent to 15 percent
D) introduce barriers to trade and investment
86) A group of fifty-three nations on the African continent joined forces in 2002 to create the
________.
A) Economic Community of West African States
B) African Union
C) African Unification Front
D) Organisation of the African Unity
Scenario: Moonland Union
Twenty-six nations of Moonland region, have decided to cooperate with one another to eliminate
trade barriers among them and create the Moonland Union. They are not sure, however, to what
extent they want to cooperate.
87) The process undertaken by these twenty-six countries is an example of ________.
A) foreign direct investment
B) protectionism
C) economic nationalism
D) regional economic integration
88) As a first stage of cooperation, the countries agree to remove all barriers to trade among
themselves. Each country also maintains policies it sees fit against nonmembers. At this stage,
Moonland Union can be described as a ________.
A) free trade area
B) political union
C) common market
D) customs union
89) If these twenty-six nations continue to eliminate all barriers to trade among themselves and
set a common trade policy against nonmembers, they would create a ________.
A) free trade area
B) preferential trading area
C) customs union
D) political union
90) Some countries in Moonland Union are interested not just in free trade among themselves
and a common trade policy against nonmembers, but also in removing all barriers to the
movement of labor and capital among themselves. This type of integration is best described as a
________.
A) free trade area
B) preferential trading area
C) customs union
D) common market
91) Country M wants member nations to harmonize their tax, monetary, and fiscal policies and
wants to create a common currency. Country M is requesting for the creation of a(n) ________
in the Moonland nations.
A) free trade area
B) economic union
C) customs union
D) common market
92) Country X advocates the greatest level of integration possible for the member nations of the
Moonland Union. Which of the following is Country X most likely to support?
A) political union
B) free trade area
C) customs union
D) economic union
Scenario: Zucoland
Zucoland, a small-sized country just south of the Andes mountain range, was invited to join a
regional trading bloc. The government of Zucoland is considering the benefits and costs of
joining such a bloc. The government is attracted by the fact that this trading bloc requires
Zucoland to give up only the least amount of sovereignty compared to other types of blocs.
93) The regional trading bloc that Zucoland will be joining is most likely a(n) ________.
A) economic union
B) free trade area
C) customs union
D) political union
94) If all countries in the bloc are asked to give up the greatest amount of sovereignty, they
would most likely be joining a(n) ________.
A) economic union
B) free trade area
C) customs union
D) political union
95) Which of the following would the government of Zucoland most likely experience as a
benefit of joining the trading bloc?
A) trade diversion
B) increased national sovereignty
C) greater consensus
D) production shifts to low-wage nations
96) Which of the following would the government of Zucoland most likely experience as a
benefit of joining the trading bloc?
A) increased national sovereignty
B) increased military security
C) trade diversion
D) higher-wage employment
Scenario: Learning the Americas’ Way
The newly-formed countries that emerged after the break up of the United Frontier States (UFS)
are interested in learning more about integration in the Americas. Because the former UFS
nations have many similarities with the countries of North and South America, they believe they
can learn from the integration experience in the Americas. To that end, they pose the following
questions.
97) The regional trade agreement between Canada, Mexico, and the United States to eliminate
tariffs and non-tariff barriers between themselves is known as the ________.
A) Central American Free Trade Agreement
B) Andean Community
C) Caribbean Community and Common Market
D) North American Free Trade Agreement
98) The NAFTA is best considered a(n) ________.
A) free trade area
B) customs union
C) economic union
D) political union
99) Bolivia, Colombia, Ecuador, and Peru belong to the ________.
A) Latin American Free Trade Association (LAFTA)
B) Central American Common Market
C) Andean Community
D) Latin American Integration Association (ALADI)
100) The Andean Community most closely resembles a(n) ________.
A) economic union
B) customs union
C) common market
D) political union
101) Differentiate among the five levels of economic and political integration.
102) Discuss the benefits and drawbacks of regional integration.
103) Discuss free trade areas as a level of regional economic integration. How can regional
integration enable employment opportunities?
104) Discuss “political union” as a level of economic integration and “political cooperation” as a
benefit of economic integration.
105) Explain the concepts of trade creation and trade diversion. Who are the winners and losers
in each scenario?
106) Describe the structure of the European Union.
107) Explain the Single European Act and how it helped to integrate Europe. How did the Single
European Act help prompt the creation of NAFTA?
108) Briefly describe regional integration efforts in Central America and the Caribbean.
109) Describe the Association of Southeast Asian Nations (ASEAN).
110) Describe some of the cultural challenges of doing business with countries of Central and
Eastern Europe. How do these challenges compare with the challenges of doing business with
ASEAN countries?
111) Explain how political cooperation is a benefit of regional integration. How has the Gulf
Cooperation Council (GCC) evolved towards political cooperation?
112) Compare and contrast the slow progress of the Andean Community and the Economic
Community of West African States (ECOWAS). Why have these trade blocs not been more
successful?