Economic Integration or Regional Integration Flashcards
ECONOMIC INTEGRATION or REGIONAL INTEGRATION
It is an agreement among nations to reduce or eliminate trade barriers and agree on fiscal policies.
What are fiscal policies?
Fiscal Policies refers to the use of government spending and tax policies to influence the economic conditions.These include aggregate demand for goods and services, employment, inflation, and economic growth.
The______________, for example, represents a complete economic integration.
European Union
What is economic integration between countries?
Economic integration is beneficial in many ways, as it allows countries to specialize and trade without government interference, which can benefit all economies. It results in a reduction of costs and ultimately an increase in overall wealth.
In your own words, what is economic integration?
Economic integration is a process in which two or more states in a broadly defined geographic area reduce a range of trade barriers to advance or protect a set of economic goals.
Give an examples of an economic integration.
NAFTA ( North American Free Trade Agreement)
EU ( European Union)
APEC ( Asian Pacific Economic Cooperation Forum)
An agreement among the U.S.A, Canada, and Mexico.
NAFTA ( North American Free Trade Agreement )
A trade agreement with 15 European countries.
EU ( European Union )
This includes NAFTA members, Japan, and China.
APEC ( Asian Pacific Economic Cooperation Forum )
Advantages of Economic Integration
Increased competition and lower prices for consumer goods.
Disadvantages of economic integration
Loss of full sovereignty over economic policy
Why is regional economic integration important?
Regional economic integration allows countries to overcome these costly divisions integrating goods, services, and factors’ markets, thus facilitating the flow of trade, capital, energy, people and ideas.
What is the conclusion of economic integration?
The conclusion drawn is that each country can gain by specializing in the good where it has comparative advantage,and trading that good for the other.
__________ refers to the cost advantages that an enterprise obtains due to expansion.
ECONOMIES OF SCALE
_____________ is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners.
Comparative Advantage
