ECO 336 MIDTERM EXAM 2025
QUESTIONS AND ANSWERS
BRIC Countries - ....ANSWER ...-Brazil, Russia, India and China. The term was
first used by Jim O'Neil at Goldman Sachs in 2001 to single out four large economies
with the potential to dramatically alter world trade and payments
Deep Intergration - ....ANSWER ...-Economic intergration beyond removal of
barriers at each country's border. Deep intergration requires changes in domestic laws
and regulations that sometimes inadvertently restrict trade.
Foreign Direct Investment (FDI) - ....ANSWER ...-The purchase of physical assets
such as real estate or businesses by a foreign company or individual. It can be outward
(citizens or businesses in the home country purchase assets in a foreign country) or
inward (foreigners purchase assets in the home country).
Gross Domestic Product (GDP) - ....ANSWER ...-The market value of all final
goods and services produced in a year inside a nation.
Quotas - ....ANSWER ...-A numerical limit on the volume of imports.
Regional Trade Agreements (RTA) - ....ANSWER ...-Agreements between two or
more countries, each offering the others preferential ccess to its markes. RTAs provide
varying degrees of access and variable amounts of deep integration.
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1
, Shallow Intergration - ....ANSWER ...-The elimination or reduction of tariffs,
quotas, and other border-related barriers (such as customs procedures) that restrict the
flow of goods across borders.
Tariffs - ....ANSWER ...-Taxes imposed on imports. tariffs raise the price to the
domestic consumer and reduce the quantity demanded.
Trade-to-GDP ratio - ....ANSWER ...-The ratio of exports plus imports to GDP;
often used as an indicator of the relative importance of international trade in a national
economy.
Transaction Cost - ....ANSWER ...-The costs of gathering market information,
arranging a market agreement, and enforcing the agreement. Transaction costs include
legal, marketing, and insurance costs, as well as quality checks, advertising, distribution,
and after-sales service costs.
Bretton Woods conference - ....ANSWER ...-A small town in New Hampshire that
was, in July 1944, the site of talks establishing the international financial and economic
order after WW2. The international Monetary Fund and the World Bank emerged as a
result
Common External Tariff - ....ANSWER ...-The policy of customs unions in which
the members adopt the same tariffs toward nonmembers
Common Market - ....ANSWER ...-A regional trade agreement whose member
nations allow the free movement of inputs as well as outputs, and who share a common
external tariff toward nonmembers
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 2
QUESTIONS AND ANSWERS
BRIC Countries - ....ANSWER ...-Brazil, Russia, India and China. The term was
first used by Jim O'Neil at Goldman Sachs in 2001 to single out four large economies
with the potential to dramatically alter world trade and payments
Deep Intergration - ....ANSWER ...-Economic intergration beyond removal of
barriers at each country's border. Deep intergration requires changes in domestic laws
and regulations that sometimes inadvertently restrict trade.
Foreign Direct Investment (FDI) - ....ANSWER ...-The purchase of physical assets
such as real estate or businesses by a foreign company or individual. It can be outward
(citizens or businesses in the home country purchase assets in a foreign country) or
inward (foreigners purchase assets in the home country).
Gross Domestic Product (GDP) - ....ANSWER ...-The market value of all final
goods and services produced in a year inside a nation.
Quotas - ....ANSWER ...-A numerical limit on the volume of imports.
Regional Trade Agreements (RTA) - ....ANSWER ...-Agreements between two or
more countries, each offering the others preferential ccess to its markes. RTAs provide
varying degrees of access and variable amounts of deep integration.
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1
, Shallow Intergration - ....ANSWER ...-The elimination or reduction of tariffs,
quotas, and other border-related barriers (such as customs procedures) that restrict the
flow of goods across borders.
Tariffs - ....ANSWER ...-Taxes imposed on imports. tariffs raise the price to the
domestic consumer and reduce the quantity demanded.
Trade-to-GDP ratio - ....ANSWER ...-The ratio of exports plus imports to GDP;
often used as an indicator of the relative importance of international trade in a national
economy.
Transaction Cost - ....ANSWER ...-The costs of gathering market information,
arranging a market agreement, and enforcing the agreement. Transaction costs include
legal, marketing, and insurance costs, as well as quality checks, advertising, distribution,
and after-sales service costs.
Bretton Woods conference - ....ANSWER ...-A small town in New Hampshire that
was, in July 1944, the site of talks establishing the international financial and economic
order after WW2. The international Monetary Fund and the World Bank emerged as a
result
Common External Tariff - ....ANSWER ...-The policy of customs unions in which
the members adopt the same tariffs toward nonmembers
Common Market - ....ANSWER ...-A regional trade agreement whose member
nations allow the free movement of inputs as well as outputs, and who share a common
external tariff toward nonmembers
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 2
