Page 25 - FINAL CFA I SLIDES JUNE 2019 DAY 6
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Session Unit 5:
19. Int. Trade & capital Flows, p136
LOS 19.f: Explain motivations for and advantages of trading blocs, common markets, and
economic unions., p.144
Free Trade Areas (FTA) – X/M barriers removed.
Customs Union (CU) – FTA + common trade restrictions with non members;
Common Market (CM) - CU + movement of labour and capital
Economic Union (EU) – CM + common institutions and economic policy.
Monetary Union (EU) – EU + Member countries adopt a single currency.
LOS 19.g: Describe common objectives of capital restrictions imposed by governments., p.145
• Reduce the volatility of domestic asset prices.
• Maintain fixed exchange rates.
• Keep domestic interest rates low.
• Protect strategic industries.
