What is it called when forming a regional trading group shifts trade away from non-member countries towards member countries?
Correct answer D. Trade diversion
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Regional Trading Arrangements MCQs
Page 2 of Regional Trading Arrangements multiple-choice questions with answers. Tap an option to check yourself.
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What is it called when forming a regional trading group increases trade above the levels before the group existed?
Correct answer B. Trade creation
Which of the following illustrates a positive, dynamic effect of economic integration?
Correct answer B. Economies-of-scale effect
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For Country X joining a customs union, trade creation is more likely to outweigh trade diversion when its pre-union tariffs are ____ and the number of member countries is ____?
Correct answer B. Relatively high; relatively large
Criticisms of the North American Free Trade Agreement include all of the following EXCEPT which one?
Correct answer C. Wages in the United States will rise relative to Mexican wages