AGB 302 WEEK 5 EXAM QUESTIONS AND ANSWERS VERIFIED 100% CORRECT

AGB 302 WEEK 5 EXAM QUESTIONS AND ANSWERS VERIFIED 100% CORRECT A _____ is one which prices do not reflect all available information externally convertible market speculative market efficient market inefficient market - ANSWER Inefficient market Which feature of a common market differentiates it from a customs union? a common external trade policy toward nonmembers ability of factors of production to move freely between members harmonization of members' tax rates a common currency - ANSWER Ability of factors of production to move freely between members The is primarily a consulted rather than legislative body Court of justice European commission European Parliament council of the European Union - ANSWER European Parliament Restrictions on external convertibility can allow domestic companies to freely invest abroad hamper foreign companies wishing to do business in that country limit domestic companies from investing abroad limit the amount of product a foreign company can produce in that country - ANSWER Limit domestic companies from investing abroad On average studies indicate that NAFTA's overall impact has been large but negative small but positive large and positive small and negative - ANSWER Small but positive From least integrated to most integrated the levels of economic integration are a common market a free trade area an economic union a customs union and a political union commons union a free trade area a common market a political union and an economic union common market, an economic union, a customs union, a free trade area and a political union. Free trade area a customs union, a common market, an economic union and a political union - ANSWER Free trade area, a customs union, a common market, and economic union, and a political union. To ensure that a free trade agreement does not result in trade diversion, which of the following have to come within the scope of the WTO? Energy markets Services nontariff barriers tax rates - ANSWER Nontariff barriers The risk that arises from volatile changes in exchange rates is known as Foreign exchange risk economic exposure transactional exposure translational exposure - ANSWER Foreign exchange risk The ________ is a global network of banks, brokers, and foreign exchange dealers connected by electronic communication systems. Foreign market database foreign exchange market global marketplace united global database - ANSWER Foreign exchange market A __________ is the simultaneous purchase and sale of a given amount of foreign exchange for two different values Currency swap arbitrage spot exchange carry trade - ANSWER Currency swap The rate at which one country is converted into another is known as the _____________ Exchange rate currency swap rate fluctuation rate carryover rate - ANSWER Exchange rate A political benefit of economic integration is that it: Reduces the potential for violent conflict. Enables participants to achieve gains from the free flow of trade. Enables participants to achieve gains from the free flow of investment. Allows countries to specialize in production of goods and services that they can produce most efficiently. - ANSWER Reduces the potential for violent conflict The movement toward regional economic integration has been most successful in _________ Central America Africa Asia Europe - ANSWER Europe