#1
Which of the following is an example of preferential trade agreement?
Mercosur
ExplanationPreferential trade agreements prioritize certain trading partners over others.
#2
Which of the following is an example of a common market?
European Union (EU)
ExplanationCommon markets allow for free movement of goods, services, capital, and labor.
#3
Which of the following is NOT a stage of economic integration according to the theory proposed by Jacob Viner?
Preferential Trade Agreement
ExplanationPreferential Trade Agreements are not considered a distinct stage in Viner's model of integration.
#4
Which of the following is an example of a supranational organization involved in economic integration?
European Union (EU)
ExplanationSupranational organizations like the EU transcend national borders to promote integration.
#5
Which of the following is a feature of a common market?
Unrestricted movement of goods, services, capital, and labor
ExplanationCommon markets allow for free movement of factors of production across borders.
#6
What is the main feature of a customs union?
Free trade area with common external tariffs
ExplanationCustoms unions maintain a common external tariff while allowing for free trade within.
#7
Which of the following is an argument against economic integration?
Increased risk of economic shocks
ExplanationEconomic integration may amplify vulnerabilities to economic fluctuations.
#8
What is the primary goal of economic integration?
To promote economic growth and welfare
ExplanationEconomic integration aims to enhance prosperity and living standards.
#9
Which of the following is a disadvantage of a monetary union?
Loss of independent monetary policy
ExplanationMonetary unions relinquish control over monetary policy to a centralized authority.
#10
What is the term used to describe the process where a country reduces or eliminates trade barriers with other countries?
Trade liberalization
ExplanationTrade liberalization involves opening up markets by reducing trade barriers.
#11
What is the concept of 'optimum currency area' (OCA) primarily concerned with?
Determining the best geographic area for a currency union
ExplanationOCA theory focuses on identifying regions where a common currency would be most beneficial.
#12
What is 'dynamic effects' in the context of economic integration?
Long-term effects on productivity and economic growth
ExplanationDynamic effects refer to the lasting impacts on a nation's economy post-integration.
#13
What is 'deep integration' in the context of economic integration?
A comprehensive approach focusing on both trade and non-trade issues
ExplanationDeep integration involves addressing various economic and regulatory aspects beyond trade.
#14
What is the 'spaghetti bowl effect' in the context of economic integration?
A situation where trade agreements become overly complex and confusing
ExplanationThe spaghetti bowl effect results from multiple intricate trade agreements overlapping.
#15
In the context of economic integration, what is 'harmonization'?
The process of standardizing regulations and policies among member states
ExplanationHarmonization involves aligning laws and rules across different member states for consistency.