Customs Union Theory Reasons That the Formation of a Customs

question 125

Multiple Choice

Customs union theory reasons that the formation of a customs union will decrease members' real welfare when the

• A) trade diversion effect exceeds the trade creation effect.
• B) trade production effect exceeds the trade consumption effect.
• C) trade consumption effect exceeds the trade production effect.
• D) trade creation effect exceeds the trade diversion effect.

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Definitions:

Sound Waves

Vibrations that travel through air or another medium and can be heard when they reach a person's or animal's ear.

Eardrum Vibrate

The movement of the tympanic membrane in response to sound waves, enabling the perception of sound.

Macro-Listening

The practice of understanding the overall context and patterns in spoken communication, beyond individual words or phrases.

Evaluative Questions

Questions designed to assess the respondent's knowledge, understanding, or decision-making process, often reflective and analytical.