Question

A successful economic union requires favorable economic, political, cultural, and geographic factors. Briefly describe these four factors. Why are they seen as important factors affecting the success of an economic union? Be specific.

Answer 1

The four factors of economic union are :-

a) Economic factors :-

The economic union helps to extend markets where the potential members of the participating countries gets some benefit from tariffs and other gets usual barrier. Due to the extended market, is becomes protected from outside and gets internal economic development. The domestic companies too gets much security due to the greater economic safety.

b) Political factors :-

For the development of economic union, political influence is important as well as it's agreeableness. The economic and political agreement is made based on the outside political threats. So, it is very important for the participating countries to be compatible with each other before starting the agreement.

c) Cultural factors :-

Two countries can merge together easily when there would be a similarity in their cultures. Closely situated countries don't face much language barrier whereas they also can understand other's viewpoint. But still some issues regarding religion and tradition came in between the agreement sometimes.

d) Geographic factors :-

Union countries when become collaborative with each other, the simple functioning of the market would be easier and smooth. One of the issue of geographical factors is the time zone of different participating countries. It can be said that a well developed trade would be settled when there would be some geographical closeness among the participating countries.

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