Economic Union involves the free flow of products and factors of production between member countries and the

adoption of a common external trade policy, but it also requires a common currency, harmonization of members' tax
rates, and a common monetary and fiscal policy.

The euro is now used by 17 of the 27 member states of the European Union; these 17 states are members of what is
often referred to as the euro zone.

NAFTA (North American Free Trade Agreement) – Established by U.S, Canada, and Mexico and became law on January
1,1994

Europe has two trade blocs-the European Union and the European Free Trade Association. Of the two, the European
Union (EU) is by far the more significant, not just in terms of membership (the EU currently has 27 members; the EFTA
has 4), but also in terms of economic and political influence in the world economy.

Trade creation occurs when high-cost domestic producers are replaced by low-cost producers within the free trade
area.

FALSE 1. The most enduring free trade area in the world is the Association of Southeast Asian Nation (ASEAN).

TRUE 3. The economic case for regional integration is straightforward

FALSE 4. The case for regional integration is both economic and practical, and it is typically not accepted by many groups
within a country

TRUE 9. Bolivia, Chile, Ecuador, Colombia, and Peru signed an agreement in 1969 to create the Andean Pact.

TRUE 7. A major issue facing the EU over the past few years has been that of management.