Because the formation of trading blocs significantly reduces or eliminates barriers to trade among members, the producer of a particular good or service is likely to be the least productive producer.

Question

Quizplus · Accepted Answer

The statement is false. The formation of trading blocs can encourage competition and drive producers to increase productivity to remain competitive within the bloc. It is not necessarily the case that the least productive producer will benefit most from the elimination of trade barriers.

Because the Formation of Trading Blocs Significantly Reduces or Eliminates