regional trading arrangements MCQs – Page 2

Practise focused regional trading arrangements questions with marked answers for exam preparation and subject revision.

regional trading arrangements Mcqs
21. Under the Common Agricultural Policy exports of any surplus quantities EU produce are encouraged through the usage of ?
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A. export subsidies

B. variable levies

C. countertrade

D. trigger prices

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

B. trade exclusion

C. trade diversion

D. trade distortion

23. 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 ?
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A. customs union

B. free-trade area

C. monetary union

D. common market

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

B. monetary union

C. customs union

D. common market

25. Members of the EU find that trade creation|| is fostered when their economies are ?
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A. highly noncompetitive

B. geographically distant

C. small in economic importance

D. highly competitive
26. Which level of economic integration best applies to the U.S economy ?
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A. free trade area

B. customs union

C. common market

D. monetary union
27. Trade creation takes place when ?
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A. economic integration results in a movement in product origin to a lower-cost member country

B. a movement to a customs union reduces the cost of trade through standardization

C. a country moves from autarky to free trade

D. economic integration results in a shift in product origin from a lower cost nonmember country to a member country having higher costs

28. The implementation of the European Union has ?
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A. made it easier for Americans to compete against the Germans in the British market

B. made it harder for Americans of compete against the Germans in the British market

C. made it easier for Americans to compete against the Japanese in the British

D. made it harder for Americans to compete against the Japanese in the British market

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

B. dynamic welfare effects

C. comprehensive welfare effects

D. trade creation