What are customs union and monetary unions and how are they different from one another ? Your answer should reflect practical examples too. 10 marks
Question
What are customs union and monetary unions and how are they different from one another?
Your answer should reflect practical examples too. 10 marks
Solution
A customs union is a form of economic integration where member countries agree to eliminate tariffs and other trade barriers among themselves, while maintaining a common external tariff on imports from non-member countries. This means that member countries can trade with each other freely, without any restrictions or tariffs, but they have a unified approach towards trade with non-member countries.
For example, the European Union (EU) is a customs union. Member countries, such as Germany, France, and Italy, can trade with each other without any barriers or tariffs. However, when it comes to trade with non-EU countries, they apply a common external tariff, which means that goods imported from outside the EU face the same tariff rates regardless of which member country they enter.
On the other hand, a monetary union is a deeper form of economic integration where member countries adopt a common currency and have a unified monetary policy. This means that
Similar Questions
Elaborate the concepts of Trade Creation and Trade Diversion in the contextof Custom Union
A(n) union is a form of regional integration that includes free trade among member countries and common trade barriers with the rest of the world.
National unions differed from local unions in that national unions
Suppose that butchers and bakers have no unions. Now suppose the butchers form a union. Whatdoes this do the labor supply of and wages of bakers?
Describe any three characteristics of 'Union List' mentioned in the Indian Constitution
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.