A Trade-Diverting Customs Union Is More Likely to Lead to Trade

question 14

Multiple Choice

A trade-diverting customs union is more likely to lead to trade creation:

• A)the lower are the pre-union trade barriers of the member countries
• B)the lower are the customs union's barriers on trade with the rest of the world
• C)the smaller is the number of countries forming the customs union and the smaller their size
• D)the more complementary rather than competitive are the economies of the nations forming the customs union

---

Definitions:

Hydraulic Theory

A theory suggesting that the development and maintenance of a civilization is closely linked to its ability to create and manage large-scale water control systems.

River Valleys

Geographical areas formed by the land surrounding a river, often characterized by fertile soil and significant for early human civilizations.

Hydraulic Theory

A theory that suggests the control and management of water resources played a crucial role in the development of early civilizations.

Occupation Site

A location where evidence of past human activity is found, indicating the presence of work, living, or ceremonial spaces.