Scenario: Moonland Union
Twenty-six nations, A through Z countries of Moonland region, have decided to cooperate with one another to eliminate trade barriers among them and create Moonland Union. They are not sure, however, to what extent they want to cooperate.
-Country M wants the group to have a common currency and common monetary and fiscal policies. This level of integration is called a(n) ________.
A) free-trade area
B) economic union
C) customs union
D) common market

Question

Quizplus · Accepted Answer

An economic union involves the highest level of economic integration among nations, including a common currency and coordinated monetary and fiscal policies. A free-trade area eliminates trade barriers, but does not have a common currency or economic policies. A customs union eliminates trade barriers and has a common external tariff, but does not have a common currency or economic policies. A common market adds the free movement of goods, services, and factors of production to a customs union, but does not necessarily have a common currency or economic policies. Therefore, only option B fits the criteria described in the scenario.

Scenario: Moonland Union Twenty-Six Nations, a Through Z Countries of Moonland Region, Have