INTB 200 Final Exam Questions With
Already Solved Solutions.
European Free Trade Association (EFTA) - Answer Norway, Iceland, Liechtenstein, and
Switzerland
North American Free Trade Agreement (NAFTA) - Answer U.S., Canada, Mexico
Credited with helping create increased political stability in Mexico
Andean Community - Answer Bolivia, Columbia, Ecuador, Peru
MERCUSOR - Answer Brazil, Argentina, Paraguay, Uruguay
Originated in 1988 as a free trade pact between Brazil and Argentina
Expanded in 1990 to include Paraguay
Expanded in 2005 to include Venezuela
May be creating trade diversion
27 - Answer Amount of members in European Union
European Economic Community - Answer 1957, goal of becoming a common market, formed
at Treaty of Rome
Single European Act - Answer 1987, work toward establishment of a single market
Maastricht Treaty - Answer Committed the EU to adopt a single currency
Used by 17 of 27 member states
Britain, Denmark, Sweden opted out
2007 - Answer Bulgaria and Romania joined EU
Association of Southeast Asian Nations (ASEAN) - Answer Brunei, Indonesia, Malaysia,
Philippines, Singapore, Thailand, Vietnam, Myanmar, Laos, Cambodia
,Free Trade Area - Answer Eliminates all barriers to the trade of goods and services among
member countries (EFTA, NAFTA)
Customs Union - Answer Eliminates trade barriers between member countries and adopts a
common external trade policy (Andean community)
Common Market - Answer Has no trade barriers to trade between member countries, a
common external trade policy, and the free movement of the factors of production
(MERCOSUR)
Economic Union - Answer 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 (European Union)
Political Union - Answer A central political apparatus that coordinates the economic, social,
and foreign policy of member states (E.U. and U.S.)
Trade diversion - Answer Occurs when low cost producers within the free trade area replace
high cost domestic producers
Trade creation - Answer Occurs when high cost suppliers within the free trade area replace
lower cost external suppliers
European Council - Answer Ultimate controlling authority within the EU
European Commission - Answer Responsible for proposing EU legislation, implementing it, and
monitoring compliance with EU laws by member states
European Parliament - Answer Debates legislation proposed by the commission and
forwarded to it by the council
Court of Justice - Answer Supreme appeals court for EU law
2004 - Answer Ten countries joined, expanding the EU to 25 states
, Andean Pact - Answer Formed in 1969 using the EU model
Re-launched in 1990, operates as a customs union
Renamed the Andean Community in 1997
Central American Trade Agreement (CAFTA) - Answer To lower trade barriers between the U.S.
and members
CARICOM - Answer 1973
Establish a customs union
Six members formed the Caribbean Single Market and Economy (CSME) --> 2006
Free Trade of the Americas (FTAA) - Answer Talks began in April 1988 to establish it by 2005
Brazil and U.S. support is now mixed
ASEAN Free Trade Area (AFTA) - Answer Six original members of ASEAN
2003
Working with ASEAN to establish a free trade zone
Asia-Pacific Economic Cooperation (APEC) - Answer 21 members including the U.S., Japan, and
China
Member states account for 55% of the world's GNP
East African Community (EAC) - Answer Re-launched in 2001
Efforts appear futile
Pros of REI - Answer Opens new markets
Allows firms to realize cost economies by centralizing production in those locations where the
mix of factor skills is optimal
Cons of REI - Answer Business environment becomes competitive
Risk of being shut out of the single market by the creation of a trade fortress
Already Solved Solutions.
European Free Trade Association (EFTA) - Answer Norway, Iceland, Liechtenstein, and
Switzerland
North American Free Trade Agreement (NAFTA) - Answer U.S., Canada, Mexico
Credited with helping create increased political stability in Mexico
Andean Community - Answer Bolivia, Columbia, Ecuador, Peru
MERCUSOR - Answer Brazil, Argentina, Paraguay, Uruguay
Originated in 1988 as a free trade pact between Brazil and Argentina
Expanded in 1990 to include Paraguay
Expanded in 2005 to include Venezuela
May be creating trade diversion
27 - Answer Amount of members in European Union
European Economic Community - Answer 1957, goal of becoming a common market, formed
at Treaty of Rome
Single European Act - Answer 1987, work toward establishment of a single market
Maastricht Treaty - Answer Committed the EU to adopt a single currency
Used by 17 of 27 member states
Britain, Denmark, Sweden opted out
2007 - Answer Bulgaria and Romania joined EU
Association of Southeast Asian Nations (ASEAN) - Answer Brunei, Indonesia, Malaysia,
Philippines, Singapore, Thailand, Vietnam, Myanmar, Laos, Cambodia
,Free Trade Area - Answer Eliminates all barriers to the trade of goods and services among
member countries (EFTA, NAFTA)
Customs Union - Answer Eliminates trade barriers between member countries and adopts a
common external trade policy (Andean community)
Common Market - Answer Has no trade barriers to trade between member countries, a
common external trade policy, and the free movement of the factors of production
(MERCOSUR)
Economic Union - Answer 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 (European Union)
Political Union - Answer A central political apparatus that coordinates the economic, social,
and foreign policy of member states (E.U. and U.S.)
Trade diversion - Answer Occurs when low cost producers within the free trade area replace
high cost domestic producers
Trade creation - Answer Occurs when high cost suppliers within the free trade area replace
lower cost external suppliers
European Council - Answer Ultimate controlling authority within the EU
European Commission - Answer Responsible for proposing EU legislation, implementing it, and
monitoring compliance with EU laws by member states
European Parliament - Answer Debates legislation proposed by the commission and
forwarded to it by the council
Court of Justice - Answer Supreme appeals court for EU law
2004 - Answer Ten countries joined, expanding the EU to 25 states
, Andean Pact - Answer Formed in 1969 using the EU model
Re-launched in 1990, operates as a customs union
Renamed the Andean Community in 1997
Central American Trade Agreement (CAFTA) - Answer To lower trade barriers between the U.S.
and members
CARICOM - Answer 1973
Establish a customs union
Six members formed the Caribbean Single Market and Economy (CSME) --> 2006
Free Trade of the Americas (FTAA) - Answer Talks began in April 1988 to establish it by 2005
Brazil and U.S. support is now mixed
ASEAN Free Trade Area (AFTA) - Answer Six original members of ASEAN
2003
Working with ASEAN to establish a free trade zone
Asia-Pacific Economic Cooperation (APEC) - Answer 21 members including the U.S., Japan, and
China
Member states account for 55% of the world's GNP
East African Community (EAC) - Answer Re-launched in 2001
Efforts appear futile
Pros of REI - Answer Opens new markets
Allows firms to realize cost economies by centralizing production in those locations where the
mix of factor skills is optimal
Cons of REI - Answer Business environment becomes competitive
Risk of being shut out of the single market by the creation of a trade fortress
