In a customs union, a common currency is adopted. Indicate whether th

QUESTION

In a customs union, a common currency is adopted.

Indicate whether the statement is true or false.

ANSWER

FALSE
A customs union eliminates trade barriers between member countries and adopts a common external trade policy. Establishment of a common external trade policy necessitates significant administrative machinery to oversee trade relations with nonmembers. It is only at the level of economic union that a common currency is required.