Understanding the European Union's Role

What is one of the main purposes of the European Union (EU)?

• To increase tariffs on goods between member states

• To allow free movement of people, goods, services, and capital within the EU

• To restrict trade between member countries

• To promote isolationism among European countries

Answer explanation

One of the main purposes of the EU is to allow free movement of people, goods, services, and capital, fostering economic integration and cooperation among member states, unlike increasing tariffs or promoting isolationism.

Which country voted left the European Union in 2016?

• France

• Germany

• United Kingdom

• Italy

Answer explanation

The United Kingdom voted to leave the European Union in a referendum held in 2016, commonly referred to as Brexit. The other countries listed, France, Germany, and Italy, did not vote to leave.

What is one of the roles of the EU in international business?

• To impose strict trade barriers between member states

• To create a customs-free union and a free market

• To discourage economic growth among member states

• To limit the movement of labour within the EU

Answer explanation

One of the EU's key roles in international business is to create a customs-free union and a free market, facilitating trade and economic cooperation among member states, rather than imposing barriers or limiting labor movement.

What is a potential negative effect of the free movement of labour within the EU?

• Increased tariffs on goods

• Unemployment for nationals of a country

• Decreased competition among businesses

• Higher product prices for consumers

Answer explanation

The free movement of labour can lead to increased competition for jobs, potentially resulting in unemployment for nationals of a country as they may struggle to compete with incoming workers.

How does the EU support businesses in terms of product standards?

• By allowing each country to set its own standards

• By establishing common standards to ensure product quality

• By eliminating all product standards

• By imposing tariffs on non-compliant products

Answer explanation

The EU supports businesses by establishing common standards, which ensures product quality across member states. This harmonization helps facilitate trade and protects consumers, making it the correct choice.

What is one challenge businesses face when trading in the EU?

• Lack of competition

• Increased costs due to environmental, employment, health, and safety laws

• No access to foreign markets

• High tariffs on goods

Answer explanation

One challenge businesses face when trading in the EU is increased costs due to strict environmental, employment, health, and safety laws, which can raise operational expenses compared to regions with less regulation.

What is the impact of the freedom of movement of capital within the EU?

• Restricts financial services to local citizens only

• Allows currencies and capital to flow freely throughout EU member states

• Imposes strict foreign exchange controls

• Limits the ability of businesses to borrow from foreign banks

Answer explanation

The freedom of movement of capital within the EU allows currencies and capital to flow freely throughout member states, facilitating investment and economic integration, which is essential for a unified market.

What is one benefit of the EU's single market for businesses?

• Increased tariffs on goods sold within the EU

• Simplified tax and administration arrangements

• Restricted access to a wider market

• Limited movement of goods and services

Answer explanation

One benefit of the EU's single market for businesses is simplified tax and administration arrangements, which reduce bureaucratic hurdles and costs, making it easier for companies to operate across member states.

How does the EU aim to promote safety among its member states?

• By encouraging countries to threaten war

• By supporting the development of laws to protect people

• By isolating member states from each other

• By imposing strict military controls

Answer explanation

The EU promotes safety by supporting the development of laws that protect people, ensuring a legal framework that enhances security and cooperation among member states, rather than through threats or isolation.

What is a potential benefit of the EU's free movement of goods and services?

• Increased product prices for consumers

• Decreased competition among businesses

• Lower prices for consumers due to increased competition

• Higher customs duties on goods

Answer explanation

The EU's free movement of goods and services fosters competition among businesses, leading to lower prices for consumers. This increased competition drives innovation and efficiency, benefiting consumers with more affordable options.