GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When several countries jointly impose common external tariffs, eliminate tariffs on each other, and eliminate barriers to the movement of labor and capital among themselves, they have formed a/an
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customs union
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economic union
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free trade area
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common market
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Explanation:
Detailed explanation-1: -A common market is a formal agreement where a group is formed amongst several countries that adopt a common external tariff. In a common market, countries also allow free trade and free movement of labor and capital among the members of the group.
Detailed explanation-2: -A free trade area is formed by a group of like-minded countries that agree to reduce trade barriers, such as tariffs and quotas, among others.
Detailed explanation-3: -Economic Union An economic union is a trading agreement wherein members eliminate trade barriers among themselves, adopt common external barriers, allow free import and export of resources, adopt a set of economic policies, and use one currency.
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