Regional Economic Integration

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Question 1
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Charlyce lives in a country where there are no barriers to the trade of goods and services. This is called a free trade area.

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Question 2
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In a customs union, trade barriers are eliminated among member countries, and each country maintains its own external trade policies.

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Question 3
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The European Union is an example of a perfect economic union.

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Question 4
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Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement.

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Question 5
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Because of the fact that everyone benefits from economic integration, it is easy to achieve and sustain.

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Question 6
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Concerns about national sovereignty in the EU have been a major impediment to economic integration.

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Question 7
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A regional free trade agreement will benefit the world only when the amount of trade it creates exceeds the amount of trade it diverts.

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Question 8
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The Treaty of Rome, signed in 1957, established the European Free Trade Association.

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Question 9
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A central reason for the establishment of the EU was the devastation of Western Europe during two world wars and the desire for a lasting peace.

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Question 10
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The Council of the European Union is responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws by member states.

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Question 11
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The judges of the European Court of Justice are required to act as representatives of national interests, rather than as independent officials.

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Question 12
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The Single European Act committed EU countries to adopting a common currency by January 1, 1999.

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Question 13
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Establishment of the euro created the largest currency zone in the world, replacing the position the U.S. dollar had held for decades.

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Question 14
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A key benefit resulting from the adoption of the euro is the ability to compare prices across member markets.

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Question 15
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The implied loss of national sovereignty to the European Central Bank (ECB) underlies the decision by Great Britain, Denmark, and Sweden to stay out of the euro zone for now.

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Question 16
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Since its establishment, the euro has had a stable trading history.

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Question 17
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The Andean Pact is a highly successful common market modeled after the EU.

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Question 18
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Political turmoil in several African nations has persistently impeded any meaningful progress in economic integration.

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Question 19
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A benefit to companies of economic integration is the opportunity to centralize their production and reduce costs.

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Question 20
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Once the barriers to trade and investment are removed, companies are able to realize cost economies by centralizing production in key locations and producing a standardized product for a single multiple-country market.

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