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1) 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
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2) The European Union is an example of a/an ? a. customs union b. economic union c. common market d. free trade area
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3) 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
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4) 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
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5) 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
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6) 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
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7) Suppose that tomatoes from Mexico face a 20 percent tariff in the United States and a 25 percent tariff in Canada. If the United States and Canada maintain free trade between each other, the these two countries belong to a ? a. free-trade area b. customs union c. common market d. monetary union
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8) 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
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9) 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
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10) The European Monetary Union is an example of a ? a. customs union b. free trade area c. reciprocal trade agreement d. monetary union
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11) 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
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12) The NAFTA is a ? a. monetary union b. free trade area c. common market d. customs union
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13) 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
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14) 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
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15) 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
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16) 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
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17) 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
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18) Which country is not a member of the European Union ? a. Spain b. Germany c. France d. Iceland
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19) 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
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