Chapter 4: Regional Economic and Political Integration
TRUE/FALSE
1. People in neighboring countries often share a language, as well as other cultural elements.
2. A common language between neighboring countries facilitates commerce and marketing.
3. A history of dominance by one nation in a region often leads to shared cultural elements among the
different peoples in that region.
4. The countries of the former Soviet Union have experienced Russian economic, political, and cultural
dominance. As a result, Russian is spoken in many countries in Europe and Asia that were formerly
part of the Soviet Empire.
5. Countries in East Africa formerly colonized by Belgium share a common second language (French),
and have extensive economic and political ties with Belgium.
6. Former colonies of the British Empire form the Commonwealth of Independent States, a body that
meets periodically to address issues of common concern and that recognizes the British monarchy as
its symbolic leader.
7. Regional proximity is not an important facilitator of economic cooperation.
8. Countries with a different level of economic development are more likely to be successful in
establishing and maintaining regional economic integration mechanisms than countries of similar
levels of economic development because the more powerful country acts as a “benevolent dictator.”
9. The European Union is characterized by a shared regional culture.
10. In the case of the Southern Cone Common Market (MERCOSUR), the member countries agree with
the associate members on the common external tariffs they should impose on international business
entering the region.
11. One of the more important obstacles to regional economic and political integration is the threat of
losing national identity and sovereignty as part of the larger regional structure.
12. In regional economic integration, most countries begin with developing a common market.
13. The Asia-Pacific Economic Cooperation (APEC) is attempting to forge an institutional integration that
will lead to a free trade association.
14. The Commonwealth of Independent States (CIS) has never had any noteworthy economic content.
15. In a free trade agreement, countries are free to charge their own tariffs to all entities external to the free
trade market.
16. Iceland, Liechtenstein, Norway, Switzerland, and Germany are the current members of the European
Free Trade Association.
17. None of the European Free Trade Association (EFTA) members have joined the European Monetary
Union.
18. In spite of the national vote against joining the European Union, Switzerland is engaging in bilateral
negotiations, securing agreements that would help it to join.
19. The goal of ASEAN is to ultimately create a free trade area where tariff and non-tariff barriers are
eliminated.
20. Under the NAFTA agreement, in order to benefit from a duty-free status, goods must have a 51%
North American content.
21. Because of the NAFTA agreement, the U.S. has removed all trade barriers for companies operating in
Mexico and Canada.
22. The North American Free Trade Agreement (NAFTA) is an ambitious plan to create a market of about
800 million people and an annual production worth $11 trillion in the Americas.
23. The Southern African Development Community is a free trade organization that promotes economic
cooperation among a coalition of 14 of Africa’s more affluent and developed nations.
24. The Andean Common Market and the Southern Cone Common Market aspire to become a common
market.
25. Only the European Union has achieved the common market stage of economic integration for ALL
member states.
26. In Europe, member countries agreed at the Treaty of Rome to establish the European Economic
Community, which eliminated all tariffs, established common external tariffs, and allowed for the free
movement of capital and labor within its territory.
27. According to the European Exchange Rate Mechanism (ERM), a currency could only fluctuate up to
2.5% of its value in either direction; when this value was consistently surpassed, the mechanism would
adjust the currency upward or downward, respectively, creating a snake-like structure.
28. The Latin American Integration Association does not offer a differential treatment to countries of
different levels of development in an attempt to standardize its polices.
29. The Andean Community (AnCom) has eliminated trade restrictions (tariff and non-tariff) within the
Andean region, but it has not yet agreed on uniform external tariffs and rules for foreign investment.
30. The Andean Common Market (AnCom) was responsible for eliminating trade restrictions (tariff and
nontariff) within the Andean region.
31. The Southern Cone Common Market (MERCOSUR) is looking North, at NAFTA, for trade and
cooperation accords.
32. South Africa is a member of The Common Market for Eastern and Southern Africa (COMESA).
33. Successful monetary unions also mean a successful economic integration and the elimination of trade
restrictions for members of the union.
34. The 1992 Maastricht Treaty had as a purpose to provide for the European Monetary Union (EMU) and
to create the European Central Bank, a single currency, and fixed exchange rates.
35. Countries that are full members of the European Monetary Union are often referred to as
“Euroregion.”
36. The West African Economic and Monetary Union (WAEMU) is one of the first attempts at economic
integration in Africa.
37. One of the reasons that the Economic Community of West African States (ECOWAS) has not been
able to achieve complete economic integration is because Nigeria has dominated the group.
38. Political union represents the highest level of integration.
39. A monetary union represents the highest level of integration between countries.
40. The European Court of Justice is the European Union’s equivalent of the U.S. Supreme Court.
However, unlike the U.S. Supreme Court, the European Court of Justice’s decisions are not final.
MULTIPLE CHOICE
1. Which of the following is a factor that prompts countries to favor trade with other countries?
a.
Sharing a culture
c.
Sharing a common border
b.
Sharing a common language
d.
All of the above.
2. A history of dominance by one nation in a region often leads to shared
a.
cultural elements
c.
natural resources
b.
currencies
d.
None of the above is true.
3. Russian dominance in the former Soviet Union led to the use of the Russian language in many
countries in Europe and Asia. In which of the following countries has Russian never been used?
a.
Estonia
b.
Lithuania
c.
Turkmenistan
d.
Russian has been used in all the above countries
4. The countries of the former Soviet Union shared a history of ____.
a.
Russian cultural dominance
c.
state-owned enterprises
b.
Russian political dominance
d.
All of the above
5. Countries in East Africa were formerly colonized by ____ and share a common second language, as
well as ties with the former colonist.
a.
Belgium
c.
Turkey
b.
Canada
d.
Spain
6. Countries in East Africa ____.
a.
were colonized by Belgium.
b.
use French as their second language.
c.
maintain strong ties with their former colonist.
d.
all of the above are true.
7. Former colonies of the British Empire ____.
a.
recognizes the British monarchy as its symbolic leader
b.
are part of the Commonwealth of Independent States
c.
were dominated by the Russian Empire
d.
are now all members of the European Union
8. Which of the following is not true regarding the members of the European Union?
a.
Members of the EU are regionally proximal.
b.
Members of the EU are culturally similar.
c.
Members of the EU are adopting a common currency.
d.
Members of the EU have a highly developed transportation infrastructure.
9. Which of the following is not a commonality shared by member countries of the European Union?
a.
A highly developed industrial base.
b.
High GDP per capita.
c.
Extensive transportation infrastructure.
d.
All of the above are shared by members of the EU.
10. Members of the European Union often differ with regard to the economic and trade policies they
advocate. Which of the following is an accurate description of one of those differences as illustrated in
your text?
a.
Germany believes that the government should actively regulate business.
b.
France stresses market development at the expense of social welfare.
c.
The Netherlands stresses the importance of market mechanisms and interferes only
minimally business regulation.
d.
Great Britain believes that genetically altered seeds should not be imported.
11. Which economic organization was established in Canberra, Australia, to mitigate the economic block
and trade protection trend prevailing in the 1970’s and 1980’s?
a.
Commonwealth of Independent States
b.
Asia-Pacific Economic Cooperation
c.
The West African Economic and Monetary Union
d.
The Association of Southeast Asian Nations
12. The Organization for Petrol Exporting Countries (OPEC), the North Atlantic Treaty Organization
(NATO), and the Organization for Economic Co-operation and Development (OECD) are all examples
of:
a.
common markets
c.
multilateral agreements
b.
bilateral agreements
d.
free trade agreements
13. Most of the Asia-Pacific Economic Cooperation’s (APEC) advances so far have been made in the area
of
a.
transportation
c.
computers and the Internet
b.
manufacturing
d.
textiles
14. The twelve non-Baltic successors to the Union of the Soviet Socialist Republics formed the
a.
Commonwealth of Independent States
b.
Central European Free Trade Agreement
c.
Central Asian Trade Federation
d.
Southern Cone Common Market
15. Which of the following is not a free trade agreement?
a.
EFTA
b.
North American Free Trade Agreement
c.
Nordic Free Trade Agreement
d.
Southern African Development Community
16. Which country is not a member of the European Free Trade Association?
a.
Iceland
c.
Great Britain
b.
Liechtenstein
d.
Switzerland
17. Which country is the only European Free Trade Association country to participate in the Schengen
agreement on the elimination of border controls.
a.
Iceland
c.
Norway
b.
Sweden
d.
Switzerland