A factor market involves a group of countries that agree to (1)remove all barriers to trade,(2)establish a common trade policy with respect to nonmembers,and (3)allow mobility for factors of production.

Question

Quizplus · Accepted Answer

A factor market involves the market for factors of production, such as labor, capital, and land. It does not necessarily involve a group of countries agreeing to remove trade barriers and establish a common trade policy. This statement is more in line with the concept of a free trade area or a customs union.

A Factor Market Involves a Group of Countries That Agree