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6. Where economic integration results in trade switching from a low-cost supplier outside the economically integrated area to a less efficient source within the area.

  • Trade Diversion
  • Trade Creation
  • Allocative Efficiency

7. For a depreciation of the currency to improve the balance of trade the sum of the price elasticities of demand (PEDs) for imports and exports must be greater than 1.

  • Marshall-Lerner Condition
  • Thirwell's Law
  • J-Curve Effect

8. Stage Of Integration: Centralising policies in some areas, usually through taxation.

  • Economic Union
  • Customs Union
  • Monetary Union

9. The record of economic and financial flows into and out of a country over a specific amount of time.

  • Balance of Payments
  • National Income
  • Capital Account

10. In a floating exchange rate system, when there is a rise in the value of the currency.

  • Increased Supply of a Currency
  • Appreciation of a Currency
  • Revaluation of a Currency

11. In a fixed exchange rate system, when the value of a currency goes up.

  • Improvement of Currency
  • Revaluation of a Currency
  • Apprectiation of a Currency

12. An exchange rate system where one currency's value is permanently set against another country's currency.

  • Managed Exchange Rates
  • Fixed Exchange Rates
  • Freely Floating Exchange Rates

13. In a fixed exchange rate system, when the value of a currency goes down.

  • Devaluation of a Currency
  • Depreciation of a Currency
  • Revision in Value

14. Investment made by multinational corporations or other foreign bodies in a country other than that in which the company is based.

  • Relocation
  • Foreign Direct Investment (FDI)
  • Aid

15. Where economic integration results in high-cost domestic production being replaced by imports from a more efficient source within the economically integrated area.

  • Trade Creation
  • Trade Diversion
  • Economies of Scale

16. Stage Of Integration: No restrictions on movements of Labour & Capital, no Non-tariff Barriers (NTB). Often common policies such as employment law.

  • Single Market
  • Customs Union
  • Economic Union

17. Stage Of Integration: Common external trade policy, usually common external tariffs. But within Europe Non-tariff barriers may still exist.

  • Customs Union
  • Single Market
  • Monetary Union

18. Price Disparities are narrowed, as trade within the FTA is encouraged.

  • Positive Integration
  • Negative Integration
  • Protectionism

19. The account that records long-term flow of capital into and out of an economy. It records purchases and sales of assets and compoprises of long-term capital flows and short-term capital flows.

  • Budget
  • Capital Account
  • Current Account

20. An exchange rate calculated to take into account the inflation rates of the respective countries.

  • Real Exchange Rates
  • Nominal Exchange Rates
  • Pegged Exchange Rates