European union

Question 1

what is the EU?

Answer 1

a group of 28 countries with the aim to collectively improve the standard of living of their citizens, they can do this by creating larger markets to allow business expansion, generating economic and political stability.

Question 2

what is a single market?

Answer 2

countries that trade freely with the common set of regulations and rules on the movement of goods.

Question 3

what is free trade?

Answer 3

trading without tariffs or quota’s being put on the trading of goods.

Question 4

what is the problem with taxation on trading for businesses?

Answer 4

it means business may trade less.

Question 5

what are the implications for trading in the EU for a business?

Answer 5

• a SWOT analysis must be carried out, a lot of market research must also be gathered which takes time and resources.
• employee’s may have to be fluent in other languages
• they may attract better or cheaper labour
• have to comply with the regulations of that country.
• benefit from economies of scale
• may increase business stability.

Question 6

what is a free trade area?

Answer 6

• where countries trade together freely based on an agreement.
• free trading of goods.

Question 7

what is a customs union?

Answer 7

• this takes free trade a step further

- it also has a common external tariff to non-members

Question 8

what is a common market?

Answer 8

• this is where all members in this group trade all resources freely not just goods
• this means barriers to labour, capital and services are also reduced (EU)

Question 9

what is a economic monetry union?

Answer 9

• where all these things apply as well as sharing a joint legislation and currency.
• fixed exchange rate.