Economic integration whereby countries remove all barriers to trade among themselves, but erect a common trade policy against nonmembers is called a(n) ________.
A) economic union
B) customs union
C) common market
D) free-trade area

Question

Quizplus · Accepted Answer

A customs union removes all barriers to trade among member countries, but members agree to a common trade policy against nonmembers. This differs from a free-trade area, which only removes barriers to trade among members but allows for individual trade policies towards nonmembers. Economic union involves not only trade but also harmonization of economic policies such as fiscal, monetary, and social policies. A common market goes beyond a customs union by allowing for the free movement of factors of production (e.g. labor, capital) among member countries.

Economic Integration Whereby Countries Remove All Barriers to Trade Among