In 1991, Argentina, Brazil, Paraguay and Uruguay implemented an agreement known as ____
A. NAFTA
B. MERCOSUR
C. APEC
D. FTAA
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A political benefit of economic integration is that ____
A. It enables participants to achieve gains from the free flow of trade
B. It enables participants to achieve gains from the free flow of investment
C. It allow countries to specialize in the production of goods and services that they can produce most efficiently
D. Linking neighboring economies creates incentives for cooperation between the neighboring states and reduces the potential for violent conflict
Trade diversion occurs when ____
A. Low-cost producers within the free trade area replace high-cost domestic producers
B. Lower cost suppliers replace higher cost external suppliers within the free trade area
C. Higher cost external suppliers replace lower cost domestic producers within the free trade area
D. Higher cost suppliers replace lower cost external suppliers within the free trade area
The institutional arrangement that governs exchange rates is known as the ____
A. Financial control system
B. International monetary system
C. International monetary fund
D. International financial regime
The Bretton Woods agreement differed from the gold standard in that it ____
A. Incorporated both discipline and flexibility
B. Was a floating rate system
C. Was based on the British pound
D. Was a rigid system of fixed exchange rates
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