Paper 2 · Elasticity of Demand and Supply
A benefit to a country of belonging to a regional trading bloc is that
Amember states stop trading with countries outside the bloc
Bits producers can sell freely into a much larger regional market
Ceach member may charge tariffs on goods from partner states
Devery member must adopt the same currency and central bank
Explanation: Members remove tariffs and quotas on trade between themselves, so a firm sells to the whole bloc rather than to its home market alone. That raises exports, output and employment, and members can also fund joint projects such as regional power schemes that no single country could afford.
Derived from ZIMSEC Economics 4050/2 Paper 2, June 2023, Q1