The Difference Between a Free Trade Area and a Customs

question 1

Multiple Choice

The difference between a free trade area and a customs union is that

• A) in a free trade area, governments eliminate tariffs on other members' goods but each member retains independent tariffs on goods entering their market from nonmembers.
• B) in a free trade area, governments eliminate tariffs on other members' goods but impose a common tariff on goods entering their market from nonmembers.
• C) in a free trade area, governments eliminate tariffs on both other members' goods and on goods entering their market from nonmembers.
• D) in a customs union, governments eliminate tariffs on other members' goods but each member retains independent tariffs on goods entering their market from nonmembers.
• E) in a customs union, governments are allowed to choose which tariffs apply to both other members' goods and on goods entering their market from nonmembers.

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Definitions:

Real Estate Project

A development undertaking in the real estate sector, which may involve construction, renovation, or improvement of properties.

Treasury Bills

Short-term government securities issued at a discount from their face value, maturing in a year or less.

Portfolio

A collection of investments held by an individual, institution, or financial entity.

Expected Return

The anticipated profit or loss from an investment, considering all potential outcomes and their probabilities.