Trade creation and trade diversion refer to the short-run (static) effects of economic integration, while economies of scale, stimulus to investment, and effects on competition refer to the long-run (dynamic) effects.

Question

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Trade creation and trade diversion are short-run effects, while economies of scale, stimulus to investment, and effects on competition are long-run effects of economic integration.

Trade Creation and Trade Diversion Refer to the Short-Run (Static)