If Country a Forms a Customs Union with Country B

question 15

Multiple Choice

If country A forms a customs union with country B, then

• A) country B continues to get tariff revenue from country A's exports sent to B.
• B) all new trade between countries A and B because of the union is known as "trade Creation."
• C) the welfare of countries A and B must necessarily be enhanced, especially if A and B Begin to buy many items from each other that they used to buy from the "outside World."
• D) countries A and B may especially benefit from the union if substantial economies of Scale exist in some of the A and B industries.

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Definitions:

Irrevocable

Incapable of being taken back, undone, or cancelled, often used in the context of certain contracts, trusts, or offers.

Implied Warranties

Legal guarantees that are not explicitly stated but are assumed in transactions, indicating that a product will meet certain quality and reliability standards.

Assignor

The party in a contract who transfers their rights or interests in a property or contract to another party, known as the assignee.

Assignment

The transfer of rights, duties, or property from one party to another, often used in contexts involving contracts, leases, and various forms of personal and real property.