Ib Test 2-- Chapter 8

Front 1

Common market

Back 1

a stage of regional integration in which trade barriers are reduced or removed, common external barriers are established, and products, services, and factors of production are allowed to move freely among the member countries

Front 2

Customs union

Back 2

a stage of regional integration in which the member counties agree to adopt common tarrff and nontarriff barriers on imports from nonmember countries

Front 3

Economic union

Back 3

a stage of regional integration in which member countries enjoy all the advantages of early stages, but also strive to have common fiscal and monetary policies

Front 4

Free trade agreement

Back 4

a formal arrangement between two or more countries to reduce or eliminate tarriffs, quoteas, and barriers to trade in products and services

Front 5

Free trade area

Back 5

a stage of regional integration in which member countries agree to eliminate tarriffs and other barriers to trade products and services within the bloc

Front 6

regional economic integration

Back 6

the growing economic interdependence that results when two or more countries within a geographic region form an alliance aimed at reducing barriers to trade and investment

Front 7

regional economic integration bloc

Back 7

a geographic area consisting of two or more countries that have agreed to persue economic integration by reducing barriers to the cross-border flow of products, services, capital, and, in more advanced states, labor

Front 8

political union

Back 8

represents the ultimate degree of interegration among countries

Front 9

european union

Back 9

the momst advanced economic integration agreement

Front 10

NAFTA, MERCOSUR

Back 10

examples of economic blocs

Front 11

Regional integration

Back 11

contributes to corporate and industrial growthm and hence to economic growth, better living standards, and higher tax revenues for the member countries. It also increases competition and economic dynamism within the bloc, and increases the bloc's politicacl power

Front 12

The most successful blocs

Back 12

most successful consist of countries that are similar in terms of culture, language, and economic political structures, and close geographically

Front 13

trade creation

Back 13

new trade is generated among the countries inside the bloc

Front 14

trade diversion

Back 14

member countries discontinue some trade with countries outside the bloc

Front 15

Regional inegration

Back 15

can reduce global freetrade, particularly when member countries form a customs unionthat results in substantial trade barriers to countries outside the bloc. It results in economic restructuring, which harm particular industries and firms

Front 16

monetary union

Back 16

a single currency (the euro) is in circulation

Front 17

factors of production

Back 17

capital, labor and technology

Front 18

market access

Back 18

tarriffs and most nontarriff barriers have been eliminated for trade in products and services, and rules of origin favor manufacturing that uses parts and other inputs used in the EU

Front 19

common market

Back 19

The EU removed barriers to the cross-national movement of production fators

Front 20

trade rules

Back 20

member countries have largely eliminated customs procedures and regulations, which streamlines transportation and logistics

Front 21

Standards harmonization

Back 21

The EU is harmonizing technical standards, regulations, and enforcement procedures that relate to products, services, and commercial activities

Front 22

interprets and enforces EU laws and settles legal disputes between member states

Back 22

European court of justice

Front 23

Regional products and marketing strategy

Back 23

regional intergration can stimulate companies to standardize teir products and services

Front 24

purchasing power parity

Back 24

the per capita GDP figures have been adjusted for price differences

Front 25

economic similarity

Back 25

the more similar the economies of the member countries, the more likely the economic bloc will succeed

Front 26

political similarity

Back 26

similarity in political systems ehances prospects fpr a successul bloc. Countries that seek to integrate regionally should share similar aspirations and a willingness to surrender national autonomy for the larger goals of the proposed union

Front 27

similarity of culture and language

Back 27

cultural and linguistic similariy among the countries in an economic bloc provies the basis for mutual understanding and cooperation

Front 28

geographic proximity

Back 28

most economic blocs are formed by countries within the same geographic region because it facilitates transportation of products, labor etc

Front 29

trade diversion

Back 29

once a bloc is in place, member countries will discontinue some trade woth nonmember countries. The aggregate effect is that national patterns of trade are altered- more trade takes place inside the bloc, and less trade takes place with countries outside the bloc

Front 30

reduced global free trade

Back 30

gives rise to two opposing tendencies. A country that reduces trade barriers is movin gtoward free trade. An economic bloc that imposes external trade barriers is moving away from the worldwide free trade

Front 31

Loss of national identity

Back 31

when nations join together in an economic bloc, increased cross-border contact has a homogenizing effect; the members become more similar to each other and national cultural identity can be diluted

Front 32

sacrifice of autonomy

Back 32

later stages of regional integration require member countries to establish a central authority in order to manage the blocs affairs. Each participating country must sacrafice to the central authority some of t autonomy.

Front 33

transfer of power to advantaged firms

Back 33

regional integration can concentrate economic power in the hands of fewer, more advantaged firms

Front 34

corporate restructuring and job loss

Back 34

many firms restructure to meet the competitive challenges posed in the new, enlarged marketplace of regional integration

Front 35

rationalization of operations

Back 35

following the creation of an economic bloc, the importance of national boundaries will decrease. Firms begin to view the bloc as a unified whole

Front 36

Rationalization

Back 36

the process of restructuring and consolidating company operations that managers often undertake following regional integration

Front 37

mergers and acquisitions

Back 37

the tendency of one firm to buy another or of two or more firms to merge and form a larger company

Front 38

internalization by firms from outside the bloc

Back 38

foreign firms tend to avoid exporting as an entry strategy because economic blocs erect trade barriers against imports from outside the bloc