How could the formation of an economic integration unit among several countries actually result in the countries trading to a greater extent in absolute terms with the outside world than before the union was formed? What factors would you consider in assessing whether this result would be likely to occur? Explain.

Question

Quizplus · Accepted Answer

The Answer is The formation of an economic integration unit among several countries could result in the countries trading to a greater extent in absolute terms with the outside world than before the union was formed for several reasons.

Firstly, by forming an economic integration unit, the member countries can benefit from economies of scale and increased efficiency in production. This can lead to lower production costs and increased competitiveness in the global market, making it more attractive for other countries to trade with the integrated unit.

Secondly, the formation of an economic integration unit can lead to the removal of trade barriers and tariffs among member countries, making it easier and more cost-effective for them to trade with each other. This increased trade within the unit can also lead to increased specialization and a more efficient allocation of resources, further enhancing the competitiveness of the integrated unit in the global market.

In assessing whether this result would be likely to occur, several factors should be considered. These include the level of economic development and industrialization of the member countries, the extent of trade barriers and tariffs that would be removed, the potential for increased economies of scale and efficiency gains, and the overall competitiveness of the integrated unit in the global market. Additionally, the willingness of member countries to cooperate and coordinate their trade policies, as well as the potential impact of the integration on non-member countries, should also be taken into account.

Overall, the formation of an economic integration unit can lead to increased trade with the outside world in absolute terms, but the likelihood of this result occurring depends on a variety of economic, political, and social factors.

How Could the Formation of an Economic Integration Unit Among