The Main Difference Between a Free Trade Area and a Customs

Multiple Choice

The main difference between a free trade area and a customs union is that the members of a customs union ________.

A) agree to the free movement of all factors of production
B) harmonize their tax, monetary, and fiscal policies and create a common currency
C) agree to treat trade with all nonmember nations in a similar manner, by having a common external tariff.
D) accept a common stance on economic and political policies regarding nonmember nations