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- Subject
- Regional Trading Arrangementseconomics-mcqs › regional-trading-arrangements
- Published
- 30 May 2019
- Last updated
- 28 May 2026
What is it called when multiple nations agree to apply uniform external tariffs, remove tariffs amongst themselves, and allow free movement of labor and capital within the group?
Multiple choice question for Regional Trading Arrangements. Select an option, then review the explanation below.
Explanation
A free trade area removes tariffs between members but does not have common external tariffs. A customs union applies common external tariffs but does not allow free movement of labor and capital. A common market combines a customs union with the free movement of labor and capital among member countries. An economic union goes further by integrating economic policies and institutions.
More Regional Trading Arrangements MCQs
Practice related questions from the same subject.
- 1.Which of the following is NOT a common criticism of the North American Free Trade Agreement (NAFTA)?
- 2.For Country X entering a customs union, under which conditions is trade creation more likely to surpass trade diversion?
- 3.Which of the following represents a beneficial and proactive impact of economic integration?
- 4.What term describes the increase in trade resulting from the establishment of a regional trading bloc that raises trade volumes beyond previous levels?
- 5.What term describes the situation when a regional trade agreement causes a decrease in trade with countries outside the group, benefiting member nations instead?