In Considering "Trade Creation" and "Trade Diversion" in the Formation

question 4

Multiple Choice

In considering "trade creation" and "trade diversion" in the formation of a customs union Between countries and whether the customs union enhances welfare in a home country Joining the union, two general conclusions that seem valid are that the customs union is More likely to enhance welfare, other things equal, (i) the __________ the initial tariff rates of the home country on imported goods, and (ii) the __________ the demand and supply curves of the affected products in the home country.

• A) higher; more elastic
• B) higher; less elastic
• C) lower; more elastic
• D) lower; less elastic

---

Definitions:

Attraction

A force that draws individuals together, often used in the context of interpersonal or sexual appeal.

Defence Mechanism

Psychological strategies employed unconsciously to protect oneself from anxiety or confronting unacceptable thoughts or feelings.

Projection

A defense mechanism where an individual ascribes their own unwanted thoughts, feelings, or impulses onto someone else.

Latent Homosexual

A term historically used to describe a person who has homosexual desires or tendencies that are not openly expressed or consciously acknowledged.