Paper 2 · November 2019 · Financial Statements and Ratios
Which of the following is a benefit to a country of joining a regional economic grouping?
AReduced tariffs between member states increase trade and widen the variety of goods available
BAll member countries must adopt a single common currency as soon as they join
CCompetition among firms operating within the region falls sharply once trade barriers are removed
DMember countries lose the right to trade with any country outside the grouping
Explanation
Economic groupings typically lower tariffs and other trade barriers between member states, which increases trade, gives consumers access to a wider variety of goods, and raises competition (which improves quality), rather than reducing it. Joining a grouping does not cut off trade with non-members, and a common currency is not a requirement of every economic grouping.
Derived from ZIMSEC Business_studies Paper 2, November 2019, Q3