A-LevelEconomicsInternational economic issues9708/12 · May/June 2018 · Q261 Mark
What is the difference between a customs union and a free trade area?
AOnly the customs union has a common external tariff with the rest of the world.
BOnly the customs union requires fixed exchange rates between member countries.
COnly the free trade area needs to eliminate tariffs between member countries.
DOnly the free trade area requires freedom of movement for labour and capital between member countries.
✓ Correct answer
A: Only the customs union has a common external tariff with the rest of the world.
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