18. The focus of the EU is eastern expansion and the constraints they are faced with are:
a.
numerous complexities related to the different stages and phases of eastward enlargement.
b.
possibilities of looser associated memberships.
c.
special rights of non-members.
d.
All of the above are correct.
19. The perception of European Union members is that EFTA members
a.
have unstable economies.
b.
would like to have more impact on the decision-making process within the EU.
c.
have nothing to offer the EU.
d.
are likely to adopt the Euro as their common currency by 2010.
20. Which country is a member of the Association of Southeast Asian Nations (ASEAN)?
a.
Japan
c.
Taiwan
b.
China
d.
Laos
21. Under the North American Free Trade Agreement (NAFTA), what percentage of a good must be of
North American content in order to be duty-free?
a.
20%
c.
60%
b.
40%
d.
80%
22. Which organization has the ambitious goal of creating a free trade association that will create a market
of about 800 million people and an annual production worth $11 trillion in the Americas?
a.
The Free Trade Area of the Americas
b.
The North American Free Trade Agreement
c.
The Latin American Integration Association
d.
The Central American Common Market
23. Why was the Southern African Development Community (SADC) founded?
a.
to foster increased economic and governmental stability
b.
to gain better medical facilities in Africa
c.
to gain more positive global recognition
d.
to facilitate global communication
24. A customs union is a free trade association that may have either eliminated or greatly reduced all
tariffs and other trade restrictions for member countries and that has adopted
a.
a common currency.
c.
common external tariffs.
b.
a central bank.
d.
common monetary policies.
25. ____ is a member of the South African Customs Union (SACU).
a.
South Africa
c.
Zimbabwe
b.
Botswana
d.
Mozambique
26. Which entity has achieved the common market stage successfully?
a.
The European Union
b.
The Andean Common Market
c.
The Southern Cone Common Market
d.
The Central American Common Market
27. The European Exchange Rate Mechanism was also known as the “snake” because it
a.
was despised by member countries with strong currencies.
b.
changed its shape based on the fluctuation of the different currencies.
c.
had a “venomous bite” on weaker currencies of the EU.
d.
None of the above are true.
28. Which country is not a member of the Latin American Integration Association?
a.
Panama
c.
Peru
b.
Colombia
d.
Mexico
29. Which country left the Andean Common Market in 1997?
a.
Bolivia
c.
Ecuador
b.
Colombia
d.
Peru
30. The Southern Cone Common Market (MERCOSUR) initially started as a bilateral agreement between
which two countries?
a.
Chile and Bolivia
c.
Brazil and Argentina
b.
Colombia and Ecuador
d.
Paraguay and Uruguay
31. Why did the Latin American Free Trade Association (LAFTA) fail?
a.
did not have international support
b.
did not have enough member countries to survive economically
c.
the low level of development of member countries
d.
had a poor governing system in place
32. The economic agreement between Belize, Costa Rica, the Dominican Republic, El Salvador,
Guatemala, Honduras, Nicaragua, and Panama is known as
a.
the Southern Cone Common Market
b.
the Andean Common Market
c.
the Latin American Integration Association
d.
the Central American Common Market
33. What difficulty does the Common Market for Eastern and Southern Africa (COMESA) currently face?
a.
poor compliance with tariff reductions
b.
concerns over customs revenue losses
c.
South Africa is not a member of COMESA
d.
all of the above
34. Which of the following is not a successful monetary union?
a.
European Monetary Union
b.
South American Monetary Union
c.
West African Economic and Monetary Union
d.
Economic Community of West African States
35. Which agreement had as a purpose to provide for the European Monetary Union and to create the
European Central Bank, a single currency, and the fixed exchange rates?
a.
The Warsaw Pact
c.
the Treaty of Rome
b.
The Geneva Convention
d.
The Maastricht Treaty
36. Which of the following countries is not a full member of the European Monetary Union?
a.
Austria
c.
Belgium
b.
Great Britain
d.
Germany
37. ECOWAS plans to merge with the WAEMU by 2004. Which of the following is not a convergence
criteria for the merger?
a.
ECOWAS members must control inflation to 5%.
b.
ECOWAS countries must have a maximum budget deficit-to-GDP ration of 4%
c.
Central bank financing of the budget deficit is limited to 10% of the previous year’s tax
revenue
d.
All of the above are required.
38. Which level of integration represents the highest level of integration?
a.
Political union
c.
Common market
b.
Monetary union
d.
Free trade agreement
39. Which of the following is located in Strasbourg, France and is a body of members elected every five
years by direct universal suffrage?
a.
The European Council
c.
The Council of Nations
b.
The European Parliament
d.
The Council of Ministers
40. Recently, the European Commission blocked the merger of MCI Worldcom and Sprint because
a.
MCI would gain access to Sprint avionics equipment, and pose a national security risk.
b.
the European telecommunications infrastructure standards are different that Sprint’s
current technology deployment.
c.
the company would be able to dictate prices for Internet access in Europe.
d.
British Telecom opposed the merger.
41. Which European organization is the equivalent of the Federal Reserve Bank for the United States?
a.
The Council of Nations
c.
The European Parliament
b.
The Council of Ministers
d.
The European Central Bank
42. What is the highest policy-making body of the European Union?
a.
The European Council
c.
The Council of Nations
b.
The European Parliament
d.
The Council of Ministers
COMPLETION
1. ____________________’s economic, political, and cultural dominance in the former Soviet Union has
resulted, for example, in the use of the Russian language from the Baltics (Estonia, Lithuania, and
Latvia) and the Ukraine, to the Asian republics of the former federation, such as Turkmenistan and
Azerbaijan.
2. State-owned enterprises and large, nationwide distributors are examples of structures characteristic of
______________________________.
3. Countries in East Africa were formerly colonized by ____________________. They share a common
second language (French), as well as extensive economic and political ties with the former colonist.
4. Estonia, Lithuania, Latvia, the Ukraine, and Turkmenistan use ____________________ as a second
language.
5. The former colonies of the ____________________ Empire form the Commonwealth of Nations.
6. The ______________________________ is a body that meets periodically to address issues of
common concern and that recognizes the British monarchy as its symbolic leader.
7. ________________________________________ was established to mitigate the economic block and
trade protection trend prevailing in the 1970’s and 1980‘s. It was established in 1989 at a ministerial
meeting in Canberra, Australia.
8. The twelve non-Baltic successors to the Union of the Soviet Socialist Republics (the Soviet Union)
formed the ___________________________________.
9. A(n) _________________________ agreement takes place between two or more countries and it
involves a reduction in, or even elimination of, customs duties and other trade barriers on all goods and
service traded between the member countries.
10. ________________________________________ is the primary and most successful example of
regional economic integration in Asia.
11. Signatory countries of the North American Free Trade Agreement are the United States, Canada, and
____________________.
12. The ___________________________________ is an ambitious plan to create a market of about 800
million people and an annual production worth $11 trillion in the Americas.
13. ________________________________________ is a free trade organization that promotes economic
cooperation among a coalition of 14 of Africa’s more affluent and developed nations.
14. A(n) _________________________ is a free trade association that may have either eliminated or
greatly reduced all tariffs and other trade restrictions for member countries and that has adopted
common external tariffs on products imported from outside the free trade area.
15. In Europe, member countries agreed, at treaty known as the ______________________________, to
establish the European Economic Community, eliminating all tariffs, establishing common external
tariffs, and allowing for the free movement of capital and labor within its territory.
16. Because the European Exchange Rate Mechanism changed its shape based on the fluctuation of the
different currencies, it was also known as the ____________________.
17. ________________________________________ was created in 1980 to replace the Latin American
Free Trade Association.
18. Member countries of a(n) _________________________ agreement eliminate all tariff and non-tariff
barriers to trade, adopt common external tariffs, and allow for the free movement of capital and labor
within the agreement.
19. The establishment of a(n) _________________________ involves the creation of a unified central
bank and the use of a single currency.
20. The countries that joined the first wave of the European Economic and Monetary Union are often
referred to as ____________________.
21. While there are a number of examples of political unions, the ______________________________ is
the only example to date of successful voluntary political integration.
22. The ______________________________, in which heads of government meet, is the highest
policy-making body of the European Union.
23. The ______________________________ consists of representatives from parliaments of member
states (of the European Union) and it acts as a constitutional council; it has the power to overrule the
Court of Justice.
24. The European Commission blocked ______________________________’s $42 billion takeover of
Honeywell International, due to the danger that the company could use Honeywell’s strength in
avionics equipment to expand its competitive strength in aircraft engines.
25. ______________________________ represents the highest level of integration; it assumes a viable
economic integration and it involves the establishing of viable common governing bodies, legislative
bodies, and enforcement powers.
ESSAY
1. What constraints does the European Union face as it attempts to expand its union eastward?
2. What was the result of the 1992 Maastricht Treaty?
3. Explain the function of the European Parliament.
4. What is involved in establishing a common market?
5. How do economic considerations affect economic integration?