Chapter 2: Regional Economic Integration

A(n) ________ combines the elimination of internal trade barriers among member countries with the adoption of common external trade policies toward nonmembers.

• free trade area

• customs union

• common market

• economic union

Country X and Country Z have established a complete political and economic integration. The countries are most likely engaged in a(n) ________.

• custom union

• common market

• economic union

• political union

A free trade area ________.

• is complete political and economic integration of two or more countries

• eliminates trade barriers among member countries

• allows workers to move freely among trade nations

• avoids problems stemming from trade deflections

A common market ________.

• is complete political and economic integration of two or more countries

• requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, eliminate barriers to the movement of the factors of production, and coordinate economic policies

• eliminates trade barriers among member countries

• requires members to eliminate internal trade barriers, adopt a common external policy toward nonmembers, and eliminate barriers to the movement of the factors of production

The ________ is an agreement to create a customs union among the governments of Argentina, Brazil, Paraguay, and Uruguay.

• Mercosur Accord

• ASEAN Free Trade Area

• Andean Pact

• Central America Common Market