What Is the Main Difference Between a Customs Union and a Free-Trade

question 69

Multiple Choice

What is the main difference between a customs union and a free-trade area?

• A) There are no restrictions on the movement of labor and capital among customs union member countries, whereas labor and capital cannot move freely among free-trade member countries.
• B) Customs union member countries adopt common tariffs against nonmembers, whereas free-trade area member countries maintain their separate tariff structures against nonmembers.
• C) There is free trade among customs union member countries but not among free-trade area member countries.
• D) Customs union member countries have adopted a common currency, whereas free-trade member countries use their separate national currencies.

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