______________ occur(s)when lower-cost imports from outside the union are replaced by higher-cost imports from another union member.
A)Trade creation
B)Trade diversion
C)Economies of scale
D)Increasing opportunity costs

Question

Quizplus · Accepted Answer

Trade diversion occurs when a union member replaces lower-cost imports from outside the union with higher-cost imports from another union member, leading to increased trade within the union but at a higher cost.

______________ Occur(s)when Lower-Cost Imports from Outside the Union Are Replaced