Multiple Choice
Which of the following is a macroeconomic question?
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1. Introduction to Macroeconomics
Introduction to Economics
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Which of the following forms of regionalism typically involves the adoption of a common currency among member countries?
A
Preferential trade agreement
B
Economic union
C
Free trade area
D
Customs union
Verified step by step guidance1
Step 1: Understand the different forms of regionalism by defining each term. A Preferential Trade Agreement (PTA) reduces tariffs for certain products between member countries but does not involve deeper economic integration.
Step 2: Define a Free Trade Area (FTA) as a group of countries that remove tariffs among themselves but maintain independent external trade policies with non-members.
Step 3: Explain a Customs Union as a group of countries that not only remove tariffs among themselves but also adopt a common external tariff on imports from non-members.
Step 4: Define an Economic Union as a deeper form of integration where member countries coordinate economic policies, harmonize regulations, and often adopt a common currency to facilitate trade and economic stability.
Step 5: Conclude that among the options, the Economic Union is the form of regionalism that typically involves the adoption of a common currency among member countries.
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