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PRACTICE PROBLEMS FOR MID-TERM #2 [BAR09F.Midtm2b.IE] 2.Which of the following represents the stage where economic integration is most complete? a. Economic union b. Customs union c. Monetary union d. Common market ANS: C PTS: 1 25. When the formation of a free trade area results in the reduction of trade with nonmember nations in favor of member countries, ____ occurs. a. Trade devaluation b. Trade revaluation c. Trade creation d. Trade diversion ANS: D PTS: 1 Figure 8.1. Effects of a Customs Union 37. Consider Figure 8.1. The value of the trade creation effect, resulting from the Greece/France customs union, equals: a. $5 b. $10 c. $15 d. $20 ANS: B PTS: 1 1
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38. Consider Figure 8.1. Comparing the trade creation and trade diversion effects, the impact of the Greece/France customs union on the welfare of Greece is: a. A $5 increase in economic welfare b. A $10 increase in economic welfare c. A $5 decrease in economic welfare d. No change in economic welfare ANS: D PTS: 1 53.In the United States, which group was most likely to be hurt by the North American Free Trade
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This note was uploaded on 04/17/2011 for the course ECON 3250 taught by Professor Shaw during the Spring '11 term at CUNY Baruch.

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