CAIE A-Level Economics 11.6.2 Types of Economic Integration

Practise distinguishing free trade areas, customs unions, monetary unions and full economic unions by their internal barriers, external tariffs, currency and policy commitments.

Exam points

distinguish a customs union from a free trade area by its common external tariff
identify a monetary union through a shared currency rather than identical fiscal or tax policy
evaluate integration through trade gains, policy independence, administration and diversion costs

[Maximum number: 1]

What is not a likely feature of a customs union?

common external tariffs with non-member nations

elimination of tariffs between member nations

elimination of quotas between member nations

shared common currency among member nations

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11.6.2—Economic integration types question 1