Economic integration whereby countries remove all barriers to trade and the movement of labor and capital between themselves and set a common trade policy against nonmembers is called a ________.
A)free trade area
B)customs union
C)common market
D)preferential trade area

Question

Quizplus · Accepted Answer

The definition provided matches the characteristics of a common market. A free trade area eliminates trade barriers but does not necessarily include the free movement of labor and capital, a customs union removes trade barriers and sets a common trade policy but does not necessarily include the free movement of labor and capital, while a preferential trade area reduces but does not eliminate trade barriers between members.

Economic Integration Whereby Countries Remove All Barriers to Trade and the Movement