Question

______ involves the free flow of products and factors of production between member countries, the adoption of a common external trade policy, a common currency, harmonization of members' tax rates, and a common monetary and fiscal policy.
A) An economic union
B) A common market
C) A customs union
D) A free trade area

Answer 1

Answer:

A, an economic Union.

Explanation:

An economic union is a type of trade agreement concerning the same market of commodities, between a group of countries.

The trade agreement usually involves the free flow of the factors of production as well as factors of production.

Also, the agreement means that countries that are a part of the economic union are able to adopt a currency, regulate and harmonize tax rates as well as implement similar policies.

Asides economic union, there are other types of trade agreements and they include, free-trade zones, custom union, etc.

Cheers.

Answer 2

Answer:

D. A free trade area

Explanation:

A free trade area is considered as a particular region where countries have decided to allow a trade to occur in their countries with little or no barriers. The countries signed a free trade agreement.

Free trade areas also have their pros and cons. They promote international division of labor and free trade, however, free trade areas are susceptible to politics and international relations.