One potential outcome from the formation of a regional trade agreement is

Question

Quizplus · Accepted Answer

The formation of a regional trade agreement can result in trade creation, as countries within the region increase their trade with each other due to reduced barriers and increased incentives. It can also result in trade diversion, as countries within the region may shift their trade away from non-member countries in favor of member countries. Additionally, the agreement may lead to economies of scale, as firms within the region can take advantage of larger markets and reduced costs of production. Therefore, all of the given options are potential outcomes of a regional trade agreement.

One Potential Outcome from the Formation of a Regional Trade