_______________ occurs when some domestic production in a member of the customs union is replaced by lower-cost imports from another member nation.
A)Trade creation
B)Trade diversion
C)Economies of scale
D)Decreasing returns to scale

Question

Quizplus · Accepted Answer

Trade creation occurs when domestic production is replaced by lower-cost imports from another member nation within a customs union, leading to more efficient allocation of resources.

_______________ Occurs When Some Domestic Production in a Member of the Customs