WAEC 2022 Economics · Question 9

A benefit that is present in all forms of economic integration is that

Options

  1. A.common agricultural policy is in place
  2. B.the size of the market is widened
  3. C.factors of production are free to move and be moved
  4. D.common currency is in use

Answer: B. the size of the market is widened

Explanation written with AI and checked against the answer key

Analyze the question: The question asks for a benefit that is present in all forms of economic integration, from the loosest to the deepest. The key word is "all".

Explain the concept: Economic integration is when countries agree to reduce or remove trade barriers among themselves. The forms, from loosest to deepest, are:

  1. Preferential trade area: lower tariffs on selected goods
  2. Free trade area: no tariffs among members, but each member keeps its own external tariffs (e.g. AfCFTA)
  3. Customs union: free trade plus a common external tariff
  4. Common market: customs union plus free movement of factors of production
  5. Economic union: common market plus common economic policies (and often a common currency)

Solution (testing each option):

  • A. Common agricultural policy: This is found only in deeper unions, such as the EU. A free trade area has no such policy. ❌
  • B. The size of the market is widened: Even in the loosest arrangement, member countries gain access to each other's markets with fewer barriers. Producers can sell to a larger customer base, which encourages economies of scale. This applies to every form of integration. ✅
  • C. Free movement of factors of production: This begins only at the common market stage. ❌
  • D. Common currency: This is found only in a monetary or full economic union (e.g. the Eurozone, or the CFA franc zone). ❌

Correct answer: B. The widened market is the one benefit shared by all forms of integration.

Exam tip: When you see "present in all forms", pick the most basic benefit, the one that does not depend on deeper integration. Trade barrier reduction leads to a bigger market, and that is the foundation of every stage. Remember the ladder: P-F-C-C-E (Preferential, Free trade, Customs union, Common market, Economic union). Features like free factor movement and a common currency only appear higher up the ladder.

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