Question

Country X and Country Y reach an agreement to boost bilateral trade. They agree to remove all barriers to the trade of goods and services. They, however, are free to determine their own trade policies with regard to nonmembers. Which level of economic integration is this an example of?

A. A customs union
B. An economic union
C. A common market
D.A Free trade area

Answer 1

D.A Free trade area

Step-by-step explanation:

A free trade area is when countries agree to remove all barriers to the trade of goods and services. They, however, are free to determine their own trade policies with regard to nonmembers.

Customs union is when countries agree to remove all barriers to the trade of goods and services and also have a joint trade policy against non members.

A common market has all the features of a common market and allows for free movement of factors of production between participating members

An economic union has all the features of a common market and also requires common economic policy and institutions among members.

I hope my answer helps you.