Exam (elaborations)
MODULE 5 CHAPTER 9 REVIEW AGB 302 EXAM QUESTIONS AND ANSWER
- Course
- Institution
MODULE 5 CHAPTER 9 REVIEW AGB 302 EXAM QUESTIONS AND ANSWER
[Show more]
Content preview
MODULE 5 CHAPTER 9 REVIEW AGB302 EXAM QUESTIONS AND ANSWER
Regional Economic Integration - Answer -agreements between countries in a
geographic region to reduce tariff and non-tariff barriers to the free flow of goods,
services, and factors of production between each other
Do regional trade agreements promote free trade? - Answer -In theory, yes, but the
world may be moving toward a situation in which a number of regional trade blocks
compete against each other
What Are The Levels Of
Regional Economic Integration? - Answer -1. A free trade area eliminates all barriers to
the trade of goods and services among
member countries
2. A customs union eliminates trade barriers between member countries and adopts a
common external trade policy
3. A common market has no barriers to trade between member countries, a common
external trade policy, and the free movement of the factors of production
4. An economic union has the free flow of
products and factors of production between members, a common external trade policy,
a
common currency, a harmonized tax rate, and a common monetary and fiscal policy
5. A political union involves a central political apparatus that coordinates the economic,
social, and foreign policy of member states
Free Trade Area Examples - Answer -European Free Trade Association (EFTA) -
Norway, Iceland, Liechtenstein, and
Switzerland
North American Free Trade Agreement
(NAFTA) - U.S., Canada, and Mexico
, Customs Union Example - Answer -Andean Community (Bolivia, Colombia, Ecuador,
and Peru)
Common Market Example - Answer -Mercosur (Brazil, Argentina, Paraguay, and
Uruguay)
Economic Union Example - Answer -European Union (EU)
Political Union Example - Answer -the EU is headed toward at least partial political
union, and the U.S. is an example of even closer political union
Why should countries integrate their economies? - Answer -All countries gain from free
trade and investment
- regional economic integration is an attempt to exploit the gains from free trade and
investment
Linking countries together, making them more dependent on each other
- creates incentives for political cooperation and reduces the likelihood of violent conflict
- gives countries greater political clout when dealing with other nations
What limits efforts at integration? - Answer -Economic integration can be difficult
because
while a nation as a whole may benefit from a regional
free trade agreement, certain groups may lose
it implies a loss of national sovereignty
Regional economic integration is only beneficial if the amount of trade it creates
exceeds the
amount it diverts
trade creation occurs when low cost producers within
the free trade area replace high cost domestic
producers
trade diversion occurs when higher cost suppliers within the free trade area replace
lower cost external
suppliers
What Is The Status Of Regional
Economic Integration In Europe? - Answer -Europe has two trade blocs
1. The European Union (EU) with 27
members
2. The European Free Trade Area
(EFTA) with 4 members
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller millyphilip. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now