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Which of the following is an argument against economic integration?
- a. It benefits only certain minority groups, not the nation as a whole.
- b. It results in forced political integration among the member countries.
- c. It reduces the degree of control over certain issues such as monetary and fiscal policy.
- d. It never leads to specialization of production of goods and services.
- e. It requires a large number of countries in the arrangement to make it economically viable.
♦ Relevant knowledgeEconomic integration can be through bilateral relationships – i.e. between two economies, or regional – i.e. between a group of economies in the same region, or multilateral – i.e. global scale as the World Trade Organization is aiming for.
Correct answer is option C, i.e. It reduces the degree control over certain issues like monetary or fiscal pilicy. An economic intergration is where the participating countries agree to remove tarrif or non-tarrif trade barriers to allow for free flow of goods and service between them.
Option a is incorrect because economic integration benefits all of the country, but certain minorities are affected by it.
Option b is incorrect because there is no forced integration of member countries.
Option d is incorrect because economic integration facilitates free movement of goods and service among member countries. This leads to specialization in goods and services for countries that are efficient.
Option e is incorrect as it does not reflect the economic viability of the arrangement. It is easier to come to an agreement when there are fewer members.
Correct answer is option C, i.e. It reduces the degree control over certain issues like monetary or fiscal pilicy.
An economic intergration is where the participating countries agree to remove tarrif or non-tarrif trade barriers to allow for free flow of goods and service between them.
Option a is incorrect because economic integration benefits all of the country, but certain minorities are affected by it.
Option b is incorrect because there is no forced integration of member countries.
Option d is incorrect because economic integration facilitates free movement of goods and service among member countries. This leads to specialization in goods and services for countries that are efficient.
Option e is incorrect as it does not reflect the economic viability of the arrangement. It is easier to come to an agreement when there are fewer members.