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/na ?
Correct answer: C. common market
- A. free trade area
- B. customs union
- C. common market
- D. economic union
Explanation
A common market combines a customs union with the free movement of labor and capital among member countries. An economic union goes further by coordinating or harmonizing major economic policies.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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