Economics 9708 · AS & A Level · International trade and free trade

International trade and free trade — practice question

How does a customs union differ from a free trade area?

  • AOnly the customs union has a common external tariff with the rest of the world.
  • BOnly the customs union requires fixed exchange rates between member countries.
  • COnly the free trade area needs to eliminate tariffs between member countries.
  • DOnly the free trade area requires freedom of movement for labour and capital between member countries.

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