When countries come together and form economic collaborations, they may decide to go beyond a simple economic cooperation and pool their economic resources to get the benefits of an integrated economy. Nevertheless, the more the countries get integrated, the more they lose their domestic control over the economic decisions. Decisions to integrate the economies of countries are often taken in stages. Thus, the economic integration initiatives are examined by stages mostly referred as types of economic integration. Theory of economic integration examines the economic effects of each economic integration type.

• At the bottom of the economic integrations pyramid, there is the preferential trade agreement, referring to the first stage of economic integration. Preferential trade agreement is the loosest type of economic integration in which the areas that require common decisions and implementation of the participant countries are minimum. In this type of economic integration, the basic aim is to foster the international trade among the participant countries in some certain industries.
• The next stage within the economic integration is the free trade area. In a free trade area, member countries abolish all trade restrictions on each other’s commodities but continue to implement their own trade policies to the countries that are outside the free trade area.
• The third stage/type of economic integration is customs union. Member countries of a customs union abolish all trade restrictions among themselves and implement a common external trade policy toward the third countries. Moreover, the customs union member countries act together as a single entity during the negotiation and conclusion of trade agreements with other countries (third countries). The implementation of common external tariff avoids the possibility of trade deflection or transshipment. Certainly, it is one step further through a deeper integration. Member countries leave their independence in deciding and implementing their own tariff rates.
• The fourth stage/type of economic integration is common market. All trade restrictions are abolished among member countries. In addition to the free movement of goods, free movement of services, labor and capital are also achieved. In other words, there are four freedoms within a common market. There is no doubt that common market is a higher level of economic integration. Member countries give up their sovereignty in most of the economic policies related with the four freedoms. Common market also requires additional common economic policies that help well-functioning of the economic integration, such as common competition policy, common indirect taxation policy, common consumer policy, common environmental policy, common e-commerce policy, etc.
• The last stage/type of economic integration process is the economic and monetary union. Certainly, it is the most comprehensive type of economic integration. Economic and monetary union encompasses all the features of the common market and goes further to unify of all the economic institutions.

As also understood from the information given, the correct order of the economic integration types from the loosest to the most comprehensive is in the option E, so the correct answer is E.