Question 1. When the EU progressed from a "customs union" to a "common market" the "factors of production" were allowed to move freely among member nations. How does this effect a prosperous member country? How does this effect a member country that is relatively poor?
Question 2. Do you anticipate that NAFTA will ever progress from where it is now to a Common Market? Why or why not?
Question 3. What are five important reasons a common currency is important in a trade bloc? Will this happen soon among the US, Canada and Mexico? Why or why not?
Question 4.
A: If one Euro = $1.57 and one US dollar = 45 Mexican pesos, how many euros are there is 245 Mexican pesos?
B. Explain the "Big Mac Index" and how it serves to indicate Purchasing Power Parity (PPP) among countries. (P. 331-6) An example will help.