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What motivates countries to join regional trade blocs?

A. removing barriers to trade protects from the influence of foreign markets.
B. increasing tariffs adds to the national GDP.
C. eliminating barriers to trade benefits the economies of member nations.
D. expanding trade relationships reduces cultural diffusion.

A.) removing barriers to trade protects from influence of foreign markets.
B.) increasing tariffs adds to the national GDP.
C.) eliminating barriers to trade benefits the economies of member nations.
D.) expanding trade relationships reduces cultural diffusion.

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Kristelle Balando
Kristelle BalandoLv10
8 Sep 2020

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Related questions

what you think for this ? do you agree or disagree and why ?

I don’t think it’s wise for nations to begin raising tariffs and increasing subsidies when we are faced with a global recession. If a smaller country raises tariffs on a good they are importing, it might not have that big effect on the global economy. However, if a country like China, Japan, United States etc. decide to raise tariffs on imports, it could lead to a global increase in the average tariffs. In the article “Barriers to entry: A rise in protectionism would worsen the already grim outlook for world trade,” it talks about the worldwide average for tariffs. In 1986 they average 26%. If the big economies of the world start increasing tariffs, the rest of the world will eventually follow, leading to a global increase on tariffs. A rise in the tariffs would slow down the global economy even more in the long run. In the article it mentions how trade has picked up immensely when tariffs are lower, and the world GDP was higher compared to when tariffs are increased because countries are more willing to trade. I think they’re still benefits to be gained from trade even when a global recession may be taking place. If tariffs are increased, countries might try to specialize in goods where they don’t have a comparative advantage in. Instead of trading for that good, they will try to produce it domestically. The opportunity cost of choosing to specialize in a good when they don’t have comparative advantage is using those resources elsewhere. Perhaps for producing a good they do have comparative advantage in. Also a decline in trade because of rising tariffs means firms wouldn’t be able to benefit from economies of scale.

1. Which of the following is true of the customs union?

a. in a customs union, tariff and non-tariff barriers between the member nations are absent.

b. in a customs union, a fixed exchange rate regime is implemented among the member nations.

c. in a customs union, member nations agree to transfer economic sovereignty to a supranational authority.

d. in a customs union, the member nations do not impose any external trade restrictions against the nonmembers.

 

2. When the national, taxation, social, and fiscal policies of two or more nations are administered by a supranational institution, the nations are said to be a part of:

a. a common market

b. a free-trade area

c. an economic union

d. a customs union

 

3. The trade creation effect under a customs union is stronger if:

a. the production effect increases

b. the trade diversion effect rises

c. the inefficient domestic producers continue to operate

d. The consumption effect reduces

 

4. Who among the following is a loser from free trade of the U.S. with Mexico?

a. Workers in import-competing industries in the U.S

b. Workers in labor-intensive businesses relocated from the U.S. to Mexico

c. The consumer in the U.S.

d. Workers in industries that use an imported component in its production process in the U.S.

 

5. A major hindrance to the growth processes of developing nations is that

a. they mostly adopt export-promoting industrialization policies

b. they have a dearth of low-wage workers.

c. they lack adequate institutions

d. they are not centrally planned economies

 

6. One of the functions of the World Bank is to

a. stipulates measures that will improve the balance of payments of a member nation

b. advances loans in foreign currencies to a member nation facing currency deficits

c. provides grants for specific development projects of a member nation.

d. review the trade policies of member nations and make necessary amendments

 

2. Throughout the 1990s, the amount of foreign direct investment directed at both developed and developing nations increased dramatically. This trend reflects:

  a slowdown in global economic activity.
  the increasing share of the U.S. in the total FDI stock.
  the decline in cross-border flows of foreign direct investment.
  the increasing internationalization of business corporations.
3. Globalization is criticized because it increases the power of _____.
  governments to own enterprises
  unskilled labor to form labor unions
  supranational organizations over nation-states
  nation-states to regulate markets and reduce competition
4. Which of the following is NOT a consequence of the reduction in trade barriers and restrictions on FDI since 1950?
  Firms are dispersing parts of their production process to global locations to drive down production costs and increase product quality.
  The economies of the world's nation-states are becoming more intertwined.
  Nations are becoming more independent of each other for important goods and services.
  The world has become significantly wealthier since 1950.
5.A common law system is different from a civil law system because:
  a common-law system is based on religious teachings, while a civil law system is based on cultural traditions.
  a common-law system is very rigid, while a civil law system tends to be more flexible.
  in a common law system, a judge relies on legal codes to make rulings, while in a civil law system a judge relies on his intuition and moral reasoning to make judgments.
  in a common law system, a judge has the power to interpret the law, while in a civil law system a judge has the power only to apply the law.
7. Which of the following areas of international trade is regulated by the Foreign Corrupt Practices Act?
  Making and performing commercial contracts in international trade.
  Preventing bribery and unethical acts in the conduct of international business.
  Establishing a set of safety standards to which a new product must adhere.
  Controlling the mafia activity that hinders trade in Russia, Japan, and the U.S.
8. Which of the following is a measure that is developed by the United Nations to measure the quality of life in different nations?
  Gross national income
  Human Development Index
  Purchasing power parity
  Gross domestic product
9. According to Hernando de Soto, which of the following factors is essential for the developing world to be able to reap the benefits of innovation and entrepreneurship?
  Detailed state planning
  Restricting direct investment by foreign enterprises
  Strong property rights
  Market regulation
10.Which of the following refers to the extent to which individuals can move out of the strata into which they are born?
  Caste stratification
  Class system
  Social mobility
  Individual potential
11.Which of the following is an example of ethnocentrism?
  A manager in India looks down upon his subordinates because they are from a lower caste, compared to him.
  An upper-middle-class woman talks rudely to a salesperson because she looks down upon individuals belonging to the working-class.
  An American manager criticizes the cultural practices of Saudi Arabia when he is sent there on business because it differs from his own cultural norms.
  A French business owner, who plans to expand his market to China, conducts a detailed cultural study of China to customize his marketing campaign.
13An international U.S. based company sets up a production unit in a developing country with poor environmental regulations. This contributes to:
  the noblesse obliges the situation.
  the inequity aversion.
  the global tragedy of the commons.
  the Friedman effect.
 

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