Question

Which form of regional cooperation agreement, when fully implemented, entails creation of a unified central bank, the use of a single currency, and common policies on agriculture, social services and welfare:

a. free trade area
b. customs union
c. common market
d. economic union
e. dispute settlement body

Answer 1

D. Economic Union

Step-by-step explanation:

Economy's Integration can be of various levels : PTA, FTA, Custom Union, Common Market, Economic Union

Economic Union (particularly Monetary Union) sets following norms between countries - 1. tariff free goods & services trade, 2. uniform policies for external trade, 3. free labour & capital movement, 4. common fiscal policies, (monetary union - common currency, central bank).

Eg : European Union - Common Agricultural Policy (same fiscal policy) , same currency i.e Euro.

All others: Free Trade Area, Customs Union, Common Market are lesser integrative economic/ regional coopereation agreements. FTA includes only 1st feature of EU, Common Market & Custom Union also include only 1st , 2nd & 1st, 2nd, 3rd features respectively.