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Which of the following is true with regard to a free trade area

Which of the following is true with regard to a free trade area?  

A.Factors of production are allowed to move freely between member nations.

B.Each member country is allowed to determine its own trade policies with regard to nonmembers.

C.Member nations are required to have a common currency.

D.Member nations are required to have a common monetary and fiscal policy.

E.Member nations are required to have a central political apparatus that coordinates economic, social, and foreign policy.

43._____ are the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements.  

A.Licensing agreements

B.Economic unions

C.Common markets

D.Free trade agreements

E.Political unions

44.Which of the following is true of the theoretically ideal free trade area?  

A.Factors of production are allowed to move freely between member nations.

B.Member countries are not allowed to determine their own trade policies with regard to nonmembers.

C.No discriminatory tariffs, quotas, subsidies, or administrative impediments are allowed to distort trade between members.

D.Member nations are required to have a common currency.

E.Member nations are required to have a common monetary and fiscal policy.

45.Which of the following is true of the European Free Trade Association (EFTA)?  

A.The emphasis of EFTA has been on free trade in agricultural goods.

B.Industrial goods were left out of the trade arrangement, each member being allowed to determine its own level of support.

C.Members cannot determine the level of protection applied to goods coming from outside EFTA.

D.It was founded by those western European countries that initially decided not to be part of the European Community.

E.It imposes a common tariff, of 5 to 20 percent, on products imported from outside.

46.Three countries enter into an agreement to remove all tariffs and trade barriers between them. They decide on a common trade policy with regard to nonmembers. Faced with political backlash, the countries stop short of allowing mobility of factors of production such as labor and capital. Which of the following levels of economic integration best describes this arrangement?  

A.Political union

B.Customs union

C.Common market

D.Economic union

E.Political union

47.A(n) _____ has no barriers to trade between member countries, includes a common external trade policy, and allows factors of production to move freely between members.  

A.command economy

B.customs union

C.common market

D.efficient market

E.free trade area

48.Which of the following is a feature of a common market?  

A.Absence of a common external trade policy with regard to nonmembers

B.Allows free movement of factors of production between member nations

C.Establishment of barriers to the free flow of goods between member nations

D.Lack of administrative machinery to oversee trade relations with nonmembers

E.Requires the use of a common currency among member nations

49.Which of the following entails a closer economic integration and cooperation than a common market?  

A.Command economy

B.Customs union

C.Efficient market

D.Free trade area

E.Economic union

50.Which of the following levels of economic integration involves the use of a common currency, harmonization of members' tax rates, and a common monetary and fiscal policy?  

A.Free trade area

B.Customs union

C.Common market

D.Economic union

E.Command economy

Jan 11 2020 View more View Less

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