A Customs Union Will Increase the Welfare of Its Members

question 56

Multiple Choice

A customs union will increase the welfare of its members and the
Rest of the world if:

• A)trade creation is greater than trade diversion.
• B)trade creation is less than trade diversion.
• C)trade creation is positive.
• D)trade diversion is positive.

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Definitions:

Double-Declining-Balance Method

A method of accelerated depreciation where an asset's book value is reduced at double the rate of straight-line depreciation.

Useful Life

The estimated duration of time a fixed asset is expected to be economically usable by an entity.

Straight-Line Method

This is a depreciation method where an equal amount of the asset's cost is allocated as an expense each year over its useful life.

Salvage Value

The expected residual cost of an asset by the end of its functional life.