_______________ occurs when trade shifts to countries in the group at the expense of trade with countries not in the group, even though the nonmember country might be more efficient in the absence of trade barriers.

Question

Quizplus · Accepted Answer

Trade diversion occurs when a trade bloc causes its members to shift their imports from more efficient global producers to less efficient producers within the bloc, due to the preferential treatment (such as reduced tariffs) given to member countries.

_______________ Occurs When Trade Shifts to Countries in the Group