Which of the following statements is(are) FALSE?
I.Trade creation is always bad for countries.
II.Trade diversion is always good for countries.
III.Regional trade agreements never cause welfare losses.
A)I
B)II
C)III
D)I, II, and III

Question

Quizplus · Accepted Answer

Trade creation is generally beneficial as it allows countries to specialize and benefit from comparative advantage. Trade diversion can be harmful as it may replace cheaper imports from non-member countries with more expensive imports from member countries. Regional trade agreements can sometimes cause welfare losses due to trade diversion effects.

Which of the Following Statements Is(are) FALSE