Which form of economic integration occurs when participating countries abolish tariffs on trade among themselves, establish a common tariff on imports from nonmembers, and permit free movement of capital and labor within the organization?
A) free trade area
B) economic union
C) common market
D) monetary union

Question

Quizplus · Accepted Answer

The scenario described in the question represents a common market, where there is free movement of capital and labor in addition to the elimination of tariffs among member countries and a common tariff on imports from non-members. A free trade area only eliminates tariffs among member countries but does not necessarily allow free movement of capital and labor. An economic union involves not only the elimination of tariffs but also the coordination of economic policies among member countries, and a monetary union involves the adoption of a common currency.

Which Form of Economic Integration Occurs When Participating Countries Abolish