Which of the Following Statements Best Defines a Customs Union

question 52

Multiple Choice

Which of the following statements best defines a customs union?

• A)All barriers to the trade of goods and services among member countries are removed and each country maintains its own policy towards nonmember countries.
• B)It eliminates trade barriers between member countries and adopts a common external trade policy and a common currency.
• C)It has no barriers to trade between member countries,includes a common external trade policy,and allows factors of production to move freely between members.
• D)It eliminates trade barriers between member countries and adopts a common external trade policy.

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Definitions:

Holding Cost

The expenses associated with storing inventory that is not yet sold or utilized, including storage, insurance, and obsolescence costs.

Annual Demand

The total quantity of a product or service that is demanded over the course of a year.

Salvage Value

The estimated resale value of an asset at the end of its useful life.

Service Level

A measure of performance that represents the percentage of customer demands that are met without delay.