Question

If a group of countries abolish trade barriers between themselves and set common tariffs for other countries, this is known as:

• A. A common market
• B. A customs union
• C. A free trade area
• D. A federation

Hint:

Know different levels of economic integration.

Answer 1

The Correct Option is B

A customs union involves a group of countries that remove trade barriers between themselves and implement a common external tariff on imports from other countries. This allows for more efficient trade among the members while controlling the trade with non-members. Hence, the correct answer is (b).