Chapter 8
The European Union started as a free trade area
True/False
True
What are FTAs
Free trade areas
(group of countries that remove trade barriers among themselves)
The UK's car industry is not really dependent on the EU and therefore, the effect of tariffs on the industry would not be very harmful to Car manufactures
True/false
False
car industry heavily dependent on the European market
(69% imports from EU, 54% exports to the EU)
At the time of the Brexit referendum, the United Kingdom had been running a trade surplus with most major economies in the world
True/false
False
--> Trade deficit
Name one advantage and one disadvantage of a common currency in the Eurozone
Advantages: Direct price comparisons, reduction of exchange rate risk, transparency
Disadvantages: independent monetary policy when business cycles develop differently within the eurozone
In contrast to the US, devolved areas like the EU and Japan did not take the Kyoto protocol (climate change agenda) very seriously
True/false
False
Under the free movement of capital legislation, every European Union citizen is able to open a bank account in every EU country
true/false
True
Name other benefits of free movement of capital
Regional economic integration brings together groups of like-minded countries and therefore, they are easier to negotiate than global agreements
True/false
True
What is the difference between the European Union and the Schengen treaty?
Schengen treaty = Abolition of border controls
- Not yet implemented by all EU Members
The USA is mainly entering bilateral trade agreements than multilateral agreements (where everyone has to agree to the same standards)
True/false
True
USA believes it to be more beneficial to them. Furthermore, the USA is able to put higher pressure on the other country to pursue certain economic reforms
The WTO was created to reduce the unnecessary areas of trade in service and intellectual property protection, to solely focus on merchandise trade.
True/false
False
It's predecessor (GATT) was solely focusing on merchandise trade and was therefore replaced by the WTO
The EU resembles a national government. However, national governments of member states still exert considerable power through which body of the European Union?
European council
The four freedoms in Europe are
1) The freedom of goods
2) The freedom of services
3) The freedom of capital
4) The freedom of...
The freedom of people
Why is the IMF not necessarily popular in the countries that it helps?
The European commission is one of the main bodies of the European Union. Please define the role of the European Commission.
- EU's executive arm
- Day to day running of the EU
If the EU and the United Kingdom don't reach an free trade agreement, the WTO rules for tariffs would apply
True/False
True
WTO rules apply to trade between nations that do not have a free trade agreement.
Which of the following is not one one of the Maastricht criteria
1) Constant Economic growth (Preferably below 3%)
2) Government budget deficit (Not exceeding 3% of GDP)
3) Debt to GDP ratio (Below 60%)
4) Inflation rates (Within 1.5%)
1) Constant economic growth
IMF = Financial assistance for countries + promote international monetary cooperation
Worldbank = Loans for infrastructure projects
Trade diversions is an argument in favour of bilateral Free trade agreements
true/false
False
Within the European Union, all constraints regarding the state aids that local and national government provide to businesses are abolished
True/False
False
EU competition policy heavily regulates state aid