A static welfare effect resulting from the formation of the European Union would be:
A) Economies of scale
B) Trade diversion
C) Investment incentives
D) Increased competition

Question

Quizplus · Accepted Answer

Trade diversion is a static welfare effect as it refers to the shift in trade from a more efficient exporter to a less efficient one due to the formation of a trade bloc like the European Union.

A Static Welfare Effect Resulting from the Formation of the European