Trading Blocs Flashcards
1
Q
Free trade areas
A
- trade barriers moved between member countries
- free to set own trade barriers on non-member countries
2
Q
Customs union
A
- trade barriers moved between member countries
- common external tariff imposed on non-member countries
3
Q
Common markets
A
- trade barriers moved between member countries
- common external tariff imposed on non-member countries
- factors of production can move freely
4
Q
Monetary union
A
- trade barriers moved between member countries
- common external tariff imposed on non-member countries
- common currency
5
Q
Trade creation leads to
A
- low prices
- increase consumer welfare
6
Q
Trade diversion
A
When trade is diverted from low cost producers to high cost producers
- increase prices
- lower living standards
7
Q
What type of trading bloc is Eurozone?
A
monetary union
8
Q
What type of trading bloc is European single market?
A
common market
9
Q
What type of trading bloc is NAFTA?
A
free trade areas
10
Q
Example of customs union?
A
EU
