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14 Cards in this Set

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regional economic integration
agreements among countries in a geographic region to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods, services and factors of production between each other
free trade area
a group of countries committed to removing all barriers to the free flow of goods and services between each other, but pursuing independent external trade policies
customs union
a group of countries committed to removing all barriers to the free flow of goods and services between each other and the pursuit of a common external trade policy
common market
a group of countries committed to removing all barriers to the free flow of goods, services, and factors of production between each other and the pursuit of a common external trade policy
economic union
a group of countries committed to removing all barriers to the free flow of goods, services, and factors of production between each other, the adoption of a common currency, the harmonization of tax rates, and the pursuit of a common external trade policy
political union
a central political appartus coordinates economic, social, and foreign policy
trade creation
trade created due to regional economic integration; occurs when high-cost domestic producers are replaced by low-cost foreign producers in a free trade area
trade diversion
trade diverted due to regional economic integration; occurs when low-cost foreign suppliers outside a free trade area are replaced by higher-cost foreign suppliers in a free trade area
European Council
consists of the heads of state of EU members and the president of the European Commission
European Commission
responsible for proposing EU legislation, implementing it, and monitoring compliance
Council of the European Union
the ultimate decision-making body in the EU
European Parliament
elected EU body that provides consulation on issues proposed by European Commission
Court of Justice
supreme appeals court for EU law
optimal currency area
one where similarities between the economic structure of countries make it feasible to adopt a single currency