Economic Integration

monetary union 

free trade area

customs union

common market

customs union

free trade area

common market

perferential trade agreement

free trade area, customs union or common market

customs union or common market 

common market or monetary union 

customs union or monetary union 

lower cost producers are replaced by higher cost producers / higher cost producers are replaced by lower cost producers 

higher cost producers are replaced by lower cost producers / lower cost producers are replaced by higher cost producers 

trade expands through more exports and imports / trade contracts through fewer exports and imports 

imports from efficient producers are replaced by imports from inefficient producers / imports from inefficient producers are replaced by imports from efficient producers 

a group of countries that adopt a common currency

a group of countries that have a common central bank

a group of countries that have a common fiscal policy 

a group of countries that have a common monetary policy

can exchange their various currencies at no cost between member states

often face convergence requirements

have greater flexibility when conducting monetary policy 

can revalue or devalue their currency 

monitor national trade policies 

help member countries with technology and training in relation to trade 

administer trade agreements 

monitor the quality of goods traded across borders