| A | B |
|---|
| Trading Bloc | formed by agreements among countries to establish links through mvmt of g,s,capital, and labor across borders |
| Free Trade Area | all barriers to trade among member countries are removed, sometimes only for certain g/s |
| Customs Union | collaboration among trading countries in which members dismantle barriers to trade in g/s; establish common trade policy w/respect to nonmembers |
| Common Market | group of countries that agree to remove all barriers to trade among members; establish common trade policy w/respect to nonmembers; allow mobility for factors of production |
| Factors of Production | all inputs into production process (capital, labor, land, technology) |
| Factor Mobility | ability to freely move factors of production across borders, among common market countries |
| Economic Union | union among trading countries w/characteristics of common market; harmonizes monetary policies, taxation, govt spending; uses common currency |
| Political Union | group of countries that have common foreign policy & security policy & share judicial cooperation |
| Trade Creation | benefit of economic integration; benefit to particular country when group of countries trades a product freely among themselves but maintains comon barriers to trade with nonmembers |
| Trade Diversion | cost of economic integration; cost to particular country when group of countries trades product freely among themselves but maintains common barriers to trade with nonmembers |
| Internal Economies of Scale | lower production costs resulting from greater production w/in one firm for enlarged market |
| External Economies of Scale | lower production costs resulting from interaction of many firms |
