What have a group of nations created when they agree to the exchange of goods among themselves by abolishing tariffs and trade restrictions?
A) a common market
B) a customs union
C) a trading block
D) a free trade area

Question

Quizplus · Accepted Answer

When a group of nations agree to abolish tariffs and trade restrictions among themselves, they have created a free trade area. In a free trade area, member nations are permitted to trade with each other without barriers, but each nation is free to set its own tariffs and restrictions on trade with non-member countries. A common market, on the other hand, also allows for the free flow of goods among member nations, but it also requires the free movement of labor and capital. A customs union eliminates internal tariffs among member nations and establishes a common external tariff on trade with non-member countries. A trading block is a broader term that can refer to any group of countries that work together to promote trade and economic growth.

What Have a Group of Nations Created When They Agree