The Main Difference Between a Free Trade Area and a Customs

question 13

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

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Definitions:

Underweight Information

Information that is given less significance or consideration than is warranted by its importance or relevance.

Guided Interview

A method of data collection in research or hiring processes where the interviewer follows a set list of questions but is free to explore topics that arise during the conversation.

Contrast Effect

A cognitive bias in which the evaluation of something is influenced by comparisons with other similar entities that differ in some aspects.

Contrast Effect

The enhancement or diminishment of perception, judgment, or behavior resulting from comparisons with recently encountered contrasting or dissimilar stimuli.