A trading arrangement that commits participating nations to remove all barriers to trade among their group, to abide by common restrictions on trade with other countries outside the group, to allow unhindered movements of factors of production within the group, and to closely coordinate all economic policies with other participants is known as:
A) a customs union.
B) a common market.
C) a free trade area.
D) an economic union.

Question

Quizplus · Accepted Answer

An economic union involves the removal of trade barriers between participating nations, a common policy towards non-participants, and the coordination of economic policies between participants, including the free movement of factors of production. This is a more integrated form of economic cooperation than a free trade area or a customs union.

A Trading Arrangement That Commits Participating Nations to Remove All