Global Economics 4

Question 1

Define appreciated

Answer 1

Increased

Question 2

Define depreciated

Answer 2

Decreased

Question 3

Define economic integration

Answer 3

Economic cooperation between countries and coordination of their economic policies leading to increased economic links between them. There are various degrees of integration depending on the type of agreement made between the cooperating countries and the degree to which barriers between them are removed

Question 4

Define preferential trade agreement

Answer 4

• Two or more countries
• To lower trade barriers between each other on particular products
• Can include labour standards, environmental issues and intellectual property
• Can be bilateral (two countries), multilateral (more than two countries) or regional

Question 5

Define trading bloc

Answer 5

A group of countries that have agreed to reduce tariff and other barriers to trade for the purpose of encouraging free or freer trade and cooperation between them

Question 6

Define free trade areas (FTA)

Answer 6

A group of countries that agree to eliminate trade barriers, and each member retains the right to pursue its own trade policy toward non-member countries. There may be free trade in some products and some protection in others

Question 7

Define customs union

Answer 7

Fulfills the requirments of an FTA, but adopts common policy toward all non-member countries, meaning they are no longer free to determine their own trade policy toward non-members, but must abide by the agreed upon

Question 8

Define common market

Answer 8

Higher degree of economic integration, meaning any remaining barriers are eliminated

Question 9

Define monetary union

Answer 9

Member countries adopt a common currency and central bank responsible for monetary policy