A. elimination of trade restrictions among member countries
B. a common tax system and monetary union
C. prohibition to restriction on factor movements
D. a common tariff levied in imports from nonmembers
Regional Trading Arrangements
Trade diversion takes place when ?
A. a country moves from autarky to free trade
B. a movement to a customs union reduces the costs of trade through standardization economic integration results in a
C. economic integration results in a movement in product origin to a lower cost member country
D. economic integration results in a shift in product origin from a lower-cost, nonmember country to a member country having higher costs
If A imposes a per unit tariff of $10 on imports from both B and C A will import ?
A. 400 units from B
B. 200 units from C
C. 200 units from each
D. 400 units from B and 200 units from C
If A forms a customs union with C, the value of trade diversion will be ?
A. $0
B. $10,000
C. $20,000
D. $40,000
…….. is said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries in favor of member countries ?
A. trade creation
B. trade diversion
C. trade exclusion
D. trade distortion
……… is said to exist when the formation of a regional trading group leads to an expansion of trade above pregroup levels ?
A. trade creation
B. trade diversion
C. trade exclusion
D. trade distortion
A positive, dynamic effect of economic integration is illustrated by ?
A. trade diversion effect
B. increased monopoly power of firms
C. decrease customs costs
D. economy-of-scale effect
Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is …….. and the total number of countries forming the customs union is ………?
A. relatively high; relatively large
B. relatively high; relatively small
C. relatively low ; relatively large
D. relatively low ; relatively small
Criticisms against the North American Free Trade Agreement include all of the following except ?
A. wages in the United States will rise relative to Mexican wages
B. American jobs will be lost to workers in Mexico
C. The environment is not adequately protected by NAFTA
D. None of the above