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.

---

Definitions:

Collective Behavior

The actions and reactions of a group of people in situations that lack clear norms and expectations.

Georg Simmel

Georg Simmel was a German sociologist and philosopher known for his contributions to social theory and for his analysis of the dynamics of social relationships and urban life.

Louis Wirth

A sociologist known for his work on urban life and social structures, particularly his studies on urbanization and its effects on social behavior.

Herbert Gans

An influential sociologist known for his work on urban issues, culture, and the concept of public space in American society.