When Products from High-Cost Suppliers Within a Customs Union Replace

question 72

Multiple Choice

When products from high-cost suppliers within a customs union replace imports from a low-cost nation that is not a member of the customs union,there exist(s) :

• A) Dynamic welfare losses
• B) Dynamic welfare gains
• C) Trade creation
• D) Trade diversion

---

Definitions:

Dutch Traders

Individuals from the Netherlands engaged in trade during the 16th to 18th centuries, significantly impacting global commerce, especially in spices and tulips.

Christianity

A monotheistic religion based on the life and teachings of Jesus Christ, emphasizing the role of Jesus as savior and the importance of love and forgiveness.

German Engineers

Professionals from Germany who specialize in the application of engineering principles to the design, development, and maintenance of buildings, machines, materials, systems, and processes.

Katsura Imperial Villa

A prime example of traditional Japanese architecture and garden design, located in Kyoto, emblematic of Japanese aesthetics and cultural values.