28 + Mcqs in Regional Trading Arrangements Page 1 McqOptions

1.	Which level of economic integration best applies to the U.S economy ?
A.	free trade area
B.	customs union
C.	common market
D.	monetary union
Answer» E.

Discussion

2.	Which factor of production in the United States is most likely to be made worse off (its factor payment will decrease) because of the North American Free Trade Agreement ?
A.	Capital
B.	land
C.	skilled labor
D.	unskilled labor
Answer» E.

Discussion

3.	Which country is not a member of the European Union ?
A.	Spain
B.	Germany
C.	France
D.	Iceland
Answer» E.

Discussion

4.	When several countries jointly impose common external tariffs, eliminate tariffs on each other, and eliminate barriers to the movement of labor and capital among themselves, they have formed a/na ?
A.	free trade area
B.	customs union
C.	common market
D.	economic union
Answer» D. economic union

Discussion

5.	When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?
A.	trade creation
B.	trade diversion
C.	dynamic welfare effects
D.	comprehensive welfare effects
Answer» C. dynamic welfare effects

Discussion

6.	Under the EU’s Common Agricultural Policy, a variable import levy equals the ?
A.	amount the 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» B. amount by which the world price exceeds the EU’s support price

Discussion

7.	Under the Common Agricultural Policy exports of any surplus quantities EU produce are encouraged through the usage of ?
A.	variable levies
B.	export subsidies
C.	trigger prices
D.	countertrade
Answer» C. trigger prices

Discussion

8.	Trade diversion takes place when ?
A.	a country moves from autarky to free trade
B.	a movement to a customs union reduces the costs of trade through standardization economic integration results in a
C.	economic integration results in a movement in product origin to a lower cost member country
D.	economic integration results in a shift in product origin from a lower-cost, nonmember country to a member country having higher costs
Answer» E.

Discussion

9.	Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?
A.	relatively high; relatively large
B.	relatively high; relatively small
C.	relatively low ; relatively large
D.	relatively low ; relatively small
Answer» B. relatively high; relatively small

Discussion

10.	Trade creation takes place when ?
A.	a country moves from autarky to free trade
B.	a movement to a customs union reduces the cost of trade through standardization
C.	economic integration results in a movement in product origin to a lower-cost member country
D.	economic integration results in a shift in product origin from a lower cost nonmember country to a member country having higher costs
Answer» D. economic integration results in a shift in product origin from a lower cost nonmember country to a member country having higher costs

Discussion

11.	The NAFTA is a ?
A.	monetary union
B.	free trade area
C.	common market
D.	customs union
Answer» C. common market

Discussion

12.	The implementation of the European Union has ?
A.	made it harder for Americans of 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
Answer» B. made it easier for Americans to compete against the Germans in the British market

Discussion

13.	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 to restriction on factor movements
D.	a common tariff levied in imports from nonmembers
Answer» C. prohibition to restriction on factor movements

Discussion

14.	The European Union is an example of a/an ?
A.	customs union
B.	economic union
C.	common market
D.	free trade area
Answer» D. free trade area

Discussion

15.	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 between its member countries
D.	levied common tariffs on products imported from nonmembers
Answer» B. established a common system of agricultural price supports

Discussion

16.	The European Monetary Union is an example of a ?
A.	customs union
B.	free trade area
C.	reciprocal trade agreement
D.	monetary union
Answer» E.

Discussion

17.	The Common Agricultural Policy of the European Union has ?
A.	increase American farm exports to the EU
B.	decrease 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» C. lowered the price of American farm exports to the EU

Discussion

18.	Members of the EU find that trade creation\|\| is fostered when their economies are ?
A.	highly competitive
B.	highly noncompetitive
C.	small in economic importance
D.	geographically distant
Answer» B. highly noncompetitive

Discussion

19.	________ is said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries in favor of member countries ?
A.	trade creation
B.	trade diversion
C.	trade exclusion
D.	trade distortion
Answer» C. trade exclusion

Discussion

20.	_________ is said to exist when the formation of a regional trading group leads to an expansion of trade above pregroup levels ?
A.	trade creation
B.	trade diversion
C.	trade exclusion
D.	trade distortion
Answer» B. trade diversion

Discussion

21.	In free trade A will import ?
A.	700 units from country C
B.	700 units from country C and 600 units from country B
C.	600 units from country C
D.	600 units from country C and 400 units from country B
Answer» D. 600 units from country C and 400 units from country B

Discussion

22.	If A imposes a per unit tariff of $10 on imports from both B and C A will import ?
A.	400 units from B
B.	200 units from C
C.	200 units from each
D.	400 units from B and 200 units from C
Answer» C. 200 units from each

Discussion

23.	If A forms a customs union with C, the value of trade diversion will be ?
A.	$0
B.	$10,000
C.	$20,000
D.	$40,000
Answer» B. $10,000

Discussion

24.	If A forms a customs union with B, A will import ?
A.	400 units from B
B.	200 units from C
C.	200 units from each
D.	400 units from B and 200 units from C
Answer» B. 200 units from C

Discussion

25.	Criticisms against the North American Free Trade Agreement include all of the following except ?
A.	wages in the United States will rise relative to Mexican wages
B.	American jobs will be lost to workers in Mexico
C.	The environment is not adequately protected by NAFTA
D.	None of the above
Answer» B. American jobs will be lost to workers in Mexico

Discussion

26.	As of 2002, the ________ became the official currency union of the European Monetary System ?
A.	dollar
B.	mark
C.	franc
D.	euro
Answer» E.

Discussion

27.	A positive, dynamic effect of economic integration is illustrated by ?
A.	trade diversion effect
B.	increased monopoly power of firms
C.	decrease customs costs
D.	economy-of-scale effect
Answer» E.

Discussion

28.	A ____ is a regional trading bloc in Which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not member ?
A.	free trade area
B.	customs union
C.	common market
D.	monetary union
Answer» B. customs union

Discussion

Explore topic-wise MCQs in Economics.

Which level of economic integration best applies to the U.S economy ?

Which factor of production in the United States is most likely to be made worse off (its factor payment will decrease) because of the North American Free Trade Agreement ?

Which country is not a member of the European Union ?

When several countries jointly impose common external tariffs, eliminate tariffs on each other, and eliminate barriers to the movement of labor and capital among themselves, they have formed a/na ?

When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?

Under the EU’s Common Agricultural Policy, a variable import levy equals the ?

Under the Common Agricultural Policy exports of any surplus quantities EU produce are encouraged through the usage of ?

Trade diversion takes place when ?

Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is and the total number of countries forming the customs union is _?

Trade creation takes place when ?

The NAFTA is a ?

The implementation of the European Union has ?

The implementation of a common market involves all of the following except ?

The European Union is an example of a/an ?

The European Union has achieved all of the following except ?

The European Monetary Union is an example of a ?

The Common Agricultural Policy of the European Union has ?

Members of the EU find that trade creation|| is fostered when their economies are ?

________ is said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries in favor of member countries ?

_________ is said to exist when the formation of a regional trading group leads to an expansion of trade above pregroup levels ?

In free trade A will import ?

If A imposes a per unit tariff of $10 on imports from both B and C A will import ?

If A forms a customs union with C, the value of trade diversion will be ?

If A forms a customs union with B, A will import ?

Criticisms against the North American Free Trade Agreement include all of the following except ?

As of 2002, the ________ became the official currency union of the European Monetary System ?

A positive, dynamic effect of economic integration is illustrated by ?

A ____ is a regional trading bloc in Which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not member ?

Explore topic-wise MCQs in Economics.

Which level of economic integration best applies to the U.S economy ?

Which factor of production in the United States is most likely to be made worse off (its factor payment will decrease) because of the North American Free Trade Agreement ?

Which country is not a member of the European Union ?

When several countries jointly impose common external tariffs, eliminate tariffs on each other, and eliminate barriers to the movement of labor and capital among themselves, they have formed a/na ?

When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?

Under the EU’s Common Agricultural Policy, a variable import levy equals the ?

Under the Common Agricultural Policy exports of any surplus quantities EU produce are encouraged through the usage of ?

Trade diversion takes place when ?

Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?

Trade creation takes place when ?

The NAFTA is a ?

The implementation of the European Union has ?

The implementation of a common market involves all of the following except ?

The European Union is an example of a/an ?

The European Union has achieved all of the following except ?

The European Monetary Union is an example of a ?

The Common Agricultural Policy of the European Union has ?

Members of the EU find that trade creation|| is fostered when their economies are ?

________ is said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries in favor of member countries ?

_________ is said to exist when the formation of a regional trading group leads to an expansion of trade above pregroup levels ?

In free trade A will import ?

If A imposes a per unit tariff of $10 on imports from both B and C A will import ?

If A forms a customs union with C, the value of trade diversion will be ?

If A forms a customs union with B, A will import ?

Criticisms against the North American Free Trade Agreement include all of the following except ?

As of 2002, the ________ became the official currency union of the European Monetary System ?

A positive, dynamic effect of economic integration is illustrated by ?

A ____ is a regional trading bloc in Which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not member ?

Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is and the total number of countries forming the customs union is _?