The Main Difference Between a Free-Trade Area and a Customs

question 97

Multiple Choice

The main difference between a free-trade area and a customs union is that the members of a customs union ________.

• A) agree to treat trade with all nonmember nations in a similar manner
• B) agree to the free movement of all factors of production
• C) harmonize their tax, monetary, and fiscal policies and create a common currency
• D) accept a common stance on economic and political policies regarding nonmember nations

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Definitions:

Circular Reaction

A repetitive action that achieves a desired outcome, often observed in infants as a part of their cognitive development process.

Secondary Circular Reaction

A developmental phase in infants, part of Piaget's theory, where they repeat actions affecting their environment, leading to the discovery of new experiences.

Mental Representation

The mind's ability to hold internal images or concepts of external objects, events, and relationships.

Cognitive Development

The process by which individuals learn and develop mental processes throughout their lives, including thinking, remembering, and problem-solving skills.